Six children's homes in Gwynedd could face an uncertain future as Wales moves to eliminate private profit from children's social care, campaigners have warned.

The Children's Homes Association (CHA) says six of the county's eight registered homes, providing 39 of its 47 residential places, are operated by organisations affected by new legislation requiring providers to adopt not-for-profit structures.

However, Cyngor Gwynedd has stressed that the homes are based within the county but do not necessarily accommodate Gwynedd children, with referrals accepted from local authorities nationwide.

Under the Health and Social Care (Wales) Act 2025, new profit-making children's homes have been prevented from registering since April.

Further restrictions will follow in 2027, before new placements into for-profit homes are generally prohibited from April 2030, subject to exceptions.

The CHA, which coordinates the Care Children Need campaign, says affected providers are unable to restructure and warns that existing services could eventually close.

Dr Mark Kerr, its chief executive, said: "These are children's homes, not simply businesses. They employ experienced staff, provide specialist care and give vulnerable children stability and relationships."

The campaign estimates that establishing six replacement homes could cost approximately £4.2 million, excluding additional staffing and running costs.

However, this remains a hypothetical estimate, with no confirmed closures or evidence that Gwynedd Council would bear the entire cost.

The warning comes amid existing financial pressures on the authority's children's services.

During 2025/26, the council spent £9.06 million on out-of-county placements, approximately £2 million above budget, while its Children and Families Department reported a £3.4 million deficit before additional financial support. The council's own figures show that average out-of-county placements increased from around 26 in 2022/23 to 37 in 2025/26, with annual costs averaging £253,000 per placement.

Brighter Futures Cymru, which operates residential homes in Gwynedd, has raised concerns about the potential disruption to vulnerable children.

Team lead Sion Jones said: "These children have been through a lot. They come from backgrounds where they haven't had stability, and that's what they're looking for."

Responding to the concerns, Cyngor Gwynedd said it supported the Welsh Government's ambition to eliminate private profit from children's care.

A spokesperson said: "The independent children's homes referred to are geographically located in Gwynedd and accept referrals from any local authority on a nationwide basis. They are not necessarily homes for Gwynedd children."

The council acknowledged the challenges facing providers but said authorities across Wales were developing plans to ensure sufficient accommodation remained available.

These include expanding council-run services, working with third-sector organisations and helping existing providers transition to not-for-profit structures.

The spokesperson added: "Cyngor Gwynedd would welcome conversations with any local providers about their future direction and potential joint-working opportunities."

The Welsh Government maintains that its phased approach will protect children from disruption while ensuring public funding is reinvested into care services.

Meanwhile, ADSS Cymru, which represents senior social services leaders across Wales's 22 local authorities, has called for flexibility during the transition to prevent instability and ensure unintended consequences are identified quickly.