Unregistered Children’s Care Facilities: A National Outrage, Says Ofsted

A staggering nine out of ten local authorities in England are resorting to placing children in unregistered care homes, which can demand fees reaching £30,000 weekly for each child.

These alarming revelations are part of Ofsted’s annual report, which highlights the ongoing struggle of local councils to find appropriate placements in registered facilities, despite the record-high number of care homes available.

Sir Martyn Oliver, chief inspector at Ofsted, characterized this alarming trend as an “ongoing national scandal” that requires immediate attention.

Rising Costs and an Unstable System

The Children’s Homes Association (CHA), representing various residential childcare providers, criticized the absence of a cohesive national strategy, urging the government to take responsibility for reforming the flawed system.

Currently, there are 4,010 registered children’s care homes in England for the 2024/25 period, marking a 15% increase compared to the previous year, and the highest figure ever recorded.

Despite this growth, Ofsted pointed out a persistent imbalance, as some providers opt to establish homes in areas with lower property costs, irrespective of the actual demand in those locales.

Geographic Disparity and Profit Motivation

Interestingly, while 26% of children’s homes are situated in the northwest of England, only 18% of the children under care reside in that region.

Sir Martyn remarked that this “strong profit motive… distorts the system beyond recognition,” indicating a troubling trend in the industry.

He further noted that the rapid expansion of care homes conceals significant issues related to their locations, affordability, and overall suitability.

Illegal Care Homes and Systemic Challenges

According to Ofsted, the scarcity of legitimate placements has given rise to a shadow market of unregistered care homes charging exorbitant fees.

In the past year alone, Ofsted has initiated 870 investigations into these questionable facilities, discovering that 680 of them operate without the necessary registration.

Operating a care home without proper registration is a criminal act, yet currently, Ofsted can only send warning letters and lacks the authority to impose fines.

Calls for Legislative Change

This situation is poised to change with impending legislation under the Children’s Wellbeing and Schools Bill.

Expenditures by councils on children in care homes have surged from £3.9 billion in 2015-16 to a staggering £8.1 billion anticipated for 2023-24.

Sir Martyn described this financial escalation as a “crisis,” emphasizing that council budgets are struggling to keep pace with the soaring costs associated with child care.

Collaborative Efforts Needed

He insisted that the government must collaborate with local authorities to eliminate the usage of unregistered children’s homes entirely.

A spokesperson from the Local Government Association expressed concern that the prohibitive costs of care homes limit available funds for preventative measures aimed at assisting children before they enter the care system.

They highlighted the critical need for a collective effort within the sector to ensure an adequate number of homes that genuinely meet the diverse needs of children.

Systemic Failures and the Path Forward

Dr. Mark Kerr, chief executive of the CHA, attributed the existence of unregistered homes to a failing system and called for increased government support for children facing the most complex and high-risk challenges.

He remarked that the “exorbitant fees” reflect the collapse of a system that has not been properly planned or funded.

“If ministers desire homes to be established in various locations, they must revise planning regulations, resolve registration delays, and outline a viable regional plan,” he stated, adding that the current system prioritizes bureaucracy over the needs of children.