A company operating three unregistered children’s homes and its directors have become the first to be prosecuted after the Office for Standards in Education, Children’s Services and Skills (Ofsted) was granted new powers to bring civil penalties against any person operating or managing an unregistered children’s home.
Kent-based Catalyst Care Limited and its two directors, Davidson Lynch-Shyllon and Miriam Ekathor, pleaded guilty to all charges at Croydon Magistrates’ Court in March. They were fined a total of £92,400 after pleading guilty to carrying on and/or managing three unregistered homes in Kent between October 2022 and April 2025, providing accommodation for nine children.
They were also ordered to pay victim surcharges totalling £2,960 and costs of £17,250 and disqualified from carrying on and/or managing or having a financial interest in a children’s home.
The court heard how the homes generated over £1.7 million in revenue from local authorities despite repeated warnings from Ofsted they were breaking the law.
In an article published on the Ofsted website Yvette Stanley, national director, regulation and social care at Ofsted, admitted the agency did not know the extent of the growing number of registered children’s homes there are with the latest available data from 2024 indicating there were over 900. A Public Accounts Committee report at the time estimated that, in a given month in 2024, around one in 10 children in residential care were living in an unregistered children’s home.
Ofsted has been given new powers to issue civil penalties against any person carrying on an unregistered children’s home under the Children’s Wellbeing and Schools Act 2026. An expanded unregistered social care team will bring unregistered investigative work into one place with greater capacity to carry out investigations.
All children’s homes in England must register with Ofsted. Carrying on or managing a home without registration is a criminal offence. Unregistered children’s homes operate outside of independent and regulatory oversight, meaning the children placed there have no assurance of safe or suitable care. There are no guaranteed checks on staff or living conditions.
The government said criminal investigations into illegal children’s homes are “complex” and the legal threshold for prosecution is “high”, adding: “Yesterday’s case is the first successful prosecution of its kind, but follows hundreds of warnings issued by Ofsted over the use of unregistered provision, which has grown partly because not enough registered homes are in the right location or have staff with skills to effectively care for children with complex needs. Illegal unregistered providers frequently charge local authorities exorbitant fees, further exploiting a system already under strain.”
His Majesty’s Chief Inspector Sir Martyn Oliver said: “It is heartbreaking that so many vulnerable children are placed in unregistered children’s homes where we have no assurance that they are safe or receiving the care they need and deserve.
“This outcome marks an important milestone in our efforts to tackle illegal children’s homes and sends a clear message that operating outside the law will have consequences. We are determined to make increased use of prosecutions to tackle the offenders running these settings. We are currently consulting on proposals to downgrade local authorities who commission these illegal homes.”
Children and families minister Josh MacAlister added: “This prosecution is a welcome start to our wider crackdown on illegal children’s homes, and we have given Ofsted new powers to issue fines under the Children’s Wellbeing and Schools Act.
“Vulnerable children deserve to be safe and properly cared for, and I want to see more action of this kind. This case should send a clear signal to anyone running an illegal children’s home: the law will catch up with you and you will face consequences.”
Ofsted said it is also consulting on changes to its inspections of local authorities’ children’s services, including how it evaluates local authorities’ use of unregistered children’s homes. Measures proposed include making use of illegal placements a limiting criterion in the framework for inspecting local authority children’s services (ILACS), meaning that a local authority would not be meeting the expected standard in the proposed ‘impact of leaders’ evaluation area.
