Title: Councils Funneling Millions into Unregistered Children’s Homes Despite Bans

To the casual observer, the property in question resembles nothing more than a modest bungalow. However, signs of neglect are evident: peeling privacy film clings to a window, wallpaper is flaking off the walls, carpets are worn thin, and doors hang askew. This facility is unregistered, rendering its operation illegal. Yet, the company running it is billing a local authority in a different part of the country £13,000 per week to care for a vulnerable teenage girl. Her care demands three full-time staff members, yet the home lacks basic amenities such as books, toys, or games.

Just a few miles away, another illicit children’s home is operating out of a council-owned property. The tenant is subletting the residence to a firm that is charging a separate local authority thousands of pounds weekly.

Five years ago, my investigative reports into these practices prompted the government to ban the use of unregulated children’s homes in England. My findings revealed that children as young as 11 were being housed in facilities that had never been inspected or registered with Ofsted. These locations ranged from squalid flats and narrowboats to tents and caravans. One case involved a home under police surveillance for suspected gang activity. I also uncovered harrowing instances of child trafficking and abuse: a girl was taken directly from her home and sexually abused, while a boy was kidnapped from a placement to be used in drug trafficking. A Newsnight investigation further highlighted how teenagers were being abandoned to organized crime networks.

The 2021 prohibition on housing under-16s in such settings was intended to eradicate the practice. In reality, however, councils facing acute accommodation shortages are placing more children than ever into these illegal homes, at a significant cost to taxpayers. I have recently identified 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.” He attributes this chaos to “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, adopted, or housed in legal children’s homes, local authorities are finding it increasingly difficult to accommodate those with complex needs—placements that are often the most costly. According to the Public Accounts Committee, councils in England have utilized unregistered homes in approximately 800 instances, despite the existing ban.

This raises critical questions: Why do English councils continue to place children in unregistered, illegal facilities? And how can the system be reformed to prevent this from persisting?

The Scale of the Crisis

Paradoxically, as the use of illegal homes has risen, the number of registered children’s homes has also doubled. Ofsted data shows an increase from 2,209 to 4,455 over eight years, even though the number of children in care has only grown by 9%.

Sources indicate that this surge in registered facilities stems from a influx of new providers entering the market, including private equity firms and property investors. Many of these newcomers lack prior experience in care, yet prices have skyrocketed. Expenditure by English councils on residential care for children has doubled in the last four years and tripled over eight years. My investigation four years ago revealed that some companies were achieving profit margins of 40%.

For example, last year Staffordshire council spent £2.6 million on a registered placement for a teenage girl who required 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 a week, totaling £318,000 annually.

However, the most alarming developments are the unregistered homes. These facilities are so openly illegal that Ofsted maintains a specific tally of them. Having visited numerous such locations, I remain shocked by the conditions in which children—many of whom have endured severe abuse and neglect before entering care—are being placed.

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