Title: Councils Spend Millions on Unregistered Children’s Homes Despite Legal Ban

To the casual observer, the bungalow does not resemble a facility designed for child care. Peeling privacy film clings incorrectly to a window, while inside, the wallpaper is crumbling, carpets are worn thin, and doors hang askew. Despite being unregistered and therefore operating illegally, the provider charges a council in another part of the country £13,000 weekly to care for a vulnerable teenage girl. Her care requires three full-time staff members, yet the home contains no books, toys, or games. Just a few miles away, another illegal operation is taking place within a council house. A tenant is subletting the property to a company that bills a different local authority thousands of pounds each week.

Five years ago, my investigations into these placements prompted the government to ban the use of unregulated children’s homes in England. I discovered that children as young as 11 were being housed in environments unregistered and uninspected by Ofsted. These locations ranged from squalid flats and tents to caravans, narrowboats, and a residence under police surveillance for suspected gang activity. My reporting also revealed severe abuses, including a girl trafficked directly from her home where she suffered sexual assault, and a boy kidnapped from a placement to be used for drug trafficking. A Newsnight investigation further highlighted that teenagers were being left vulnerable to organized crime.

Although the 2021 prohibition on housing under-16s in such settings was intended to eradicate the practice, councils facing accommodation shortages are placing more children than ever before into illegal homes, at significant cost to taxpayers. I have now uncovered unregistered placements costing up to £2 million per child annually. Dr. Mark Kerr, chief executive of the Children’s Homes Association, describes the sector as a "Wild West," stating, "This is the culmination of 10 years of systemic failure to develop specialist provision for our most vulnerable children."

While most children are placed in foster care, adoption, or legal residential homes, local authorities have struggled to locate suitable placements for children with complex needs—often the most expensive to support. According to the Public Accounts Committee, councils in England have utilized unregistered homes in approximately 800 cases, despite the ban. This raises critical questions: Why do English councils continue to place children in illegal, unregistered homes, and how can the system be reformed to prevent this from persisting?

The Scale of the Crisis

Paradoxically, as the reliance on illegal homes has grown, the number of registered children’s homes has doubled from 2,209 to 4,455 over eight years, according to Ofsted. This surge occurred despite only a 9% rise in the number of children in care during the same period. Sources indicate that this expansion was driven by a wave of new providers entering the market, including private equity firms and property investors. Many of these entrants lacked prior care experience, yet prices skyrocketed.

Council expenditure on residential care in England has doubled in the last four years and tripled over eight years. Four years ago, I reported that some companies were achieving profit margins of 40%. For example, Staffordshire council paid £2.6 million last year to support a teenage girl in a registered placement requiring up to five staff members. The council cites a national shortage of specialist homes, noting that the NHS covers half the cost. Even the average placement in a registered home now costs £6,100 per week, totaling £318,000 annually.

However, the unregistered homes—so openly operated that Ofsted maintains a count of them—generate the greatest concern. Having visited numerous such facilities, I remain shocked by the conditions in which children, who have endured severe abuse and neglect prior to entering care, are placed.

Source: BBC News Generated at: 2026-05-20 23:10:10 UTC