Some children in care are costing local councils over £2 million a year to look after. Not because they’re receiving gold-plated services. Because the homes placing them were never legally approved to do so in the first place.
Illegal or “unregistered” children’s homes have been a persistent scandal in England’s care system for years. In 2023, the government introduced a ban on councils funding these placements, promising to shut down a practice that watchdogs had repeatedly flagged as dangerous. Yet councils are still writing the cheques.
The reason is grimly straightforward: there simply aren’t enough registered placements for the most complex, high-needs children. When a teenager with severe mental health difficulties or a violent history needs somewhere to go tonight, councils don’t have the luxury of waiting for a bed in a properly regulated home to open up. So they pay whatever an unregistered provider demands.
And the providers know it. Figures from council spending data show some placements costing between £1.5 million and £2 million per child, per year. That’s roughly £5,500 a day for a placement in a setting that hasn’t passed basic regulatory checks.
“Local authorities are caught in an impossible position,” one children’s services director told researchers earlier this year. “We know it’s wrong. We also know the alternative could be a child sleeping on a park bench.”
Ofsted, which regulates children’s homes, has the power to prosecute providers operating without registration. But enforcement is slow, and the homes that get shut down often reopen under a different name within months. It’s a game of regulatory whack-a-mole that nobody seems to be winning.
Critics point the finger at years of underfunding that have hollowed out the registered sector. The number of children in care in England has risen steadily, hitting over 83,000 last year, while the supply of quality placements has failed to keep pace.
The government insists it’s acting, with a wider children’s social care reform programme underway. But reform takes years, and tonight there are children being placed somewhere that no inspector has ever set foot inside.
The real question isn’t just how councils are still allowed to do this. It’s what kind of system creates a situation where the illegal option is the only option on the table.
