NEW figures showing that hundreds of children live in unregistered children’s homes, usually owned by private companies that receive no formal inspection or scrutiny, are a call for people to “offer homes with care and commitment”, the Christian charity Home for Good and Safe Families said this week.
The placement of 669 children in illegal homes last year was “what failure looks like in children’s services: when a lack of good options is what dictates the quality of care given to a child with complex needs,” the Children’s Commissioner, Dame Rachel de Souza, said on Sunday. The figure, collected from local authorities and finalised on 1 September 2025, showed that too little had changed since the data were collected the year before, when 764 children were listed in such homes.
The costs, she wrote in her report, were “staggeringly high”, at a weekly average of £10,500. Over the past 12 months, councils had spent an estimated £353 million “putting some of the country’s most vulnerable children in settings that cannot come close to meeting their needs”. Thirty-six individual placements had cost more than £1 million: “a huge expense that could have instead been spent on earlier intervention, keeping them closer to loved ones and ensuring stability in their lives”.
In 2025, there were 81,770 children in care in England and Wales. This represents an increase of 30 per cent since 2010. About two-thirds were placed with foster carers, while children’s homes accommodated 12 per cent. While the number of children’s homes has increased, they are often located outside a child’s home borough, in areas where housing is less expensive. Only some can provide certain specialised types of care.
The Association of Directors of Children’s Services warned in 2024 that the financial pressures relating to the cost of children’s homes was “unlike anything we have experienced before”, against a backdrop of “effectively bankrupt” local authorities. The needs of children in care were “increasingly complex”, and there was a “growing evidence base showing some large private providers are generating significant profits from vulnerable children and the public purse”. The estimated average annual expenditure per child in a children’s home increased from £239,800 in 2019-20 to £318,400 in 2023-24 in real terms.
By law, children’s homes must be registered with Ofsted, which identified 680 unregistered homes last year. The Children’s Commissioner’s report found that 89 per cent per cent of the illegal placements reported by local authorities were supplied by private providers.
The Children’s Wellbeing and Schools Bill, currently in the House of Lords (News, 9 May 2025), includes new enforcement powers for Ofsted to issue civil penalties against providers operating unregistered children’s homes, while there are plans to enable the Education Secretary to cap the profit that can be made from children’s social-care placements. But Dame Rachel has expressed concern about the pace of reform.
In her report, she called for “robust investment in models of early intervention and therapeutic support, instead of relying on costly crisis placements”. This should include “a plan for recruiting specialist foster carers, rapidly increasing the number of high-quality children’s homes and better join-up between services including a commissioning strategy that considers children with high or complex needs who require the support of multiple services”.
There was also a need for “a fundamental shift in how we think about risk — and what that means in a vulnerable child’s life”, she said. “We can no longer pretend that locking child in a flat under constant observation, or putting them in a caravan without proper facilities, is the ‘risk averse’ option. It is deeply risky, deeply harmful and cannot continue.”
Responding to Dame Rachel’s report this week, a press release from Home for Good and Safe Families said that the heart of the problem was “a chronic shortage of family-based care. Too few foster carers, specialist carers, and supported lodgings hosts mean local authorities are left with limited options, forcing them to choose between bad and worse placements.”
The charity, founded in 2013, works to equip and train prospective foster carers and encourage people to offer “supported lodgings” to 16-to-25-year-olds (News, 8 November 2024). “This report makes it clear that change will not come through policy alone,” the charity’s head of advocacy, Sam Lomas, said this week. “It will come through people stepping forward to offer homes with care and commitment.”
At the end of last March, there were 33,435 fostering households, ten per cent fewer than in 2021. As of 2022, the largest group of all approved foster carers were in their fifties (41 per cent), while 27 per cent were over 60 (News, 21 July 2023).
