Research published by the Office for Standards in Education, Children’s Services and Skills (Ofsted) shows while there are now more children’s homes than ever before, homes are getting smaller, are often not in the right places, or are unable to meet the needs of children needing residential care. There is also a “sharp growth” in the number of unregistered children’s homes, and record spending at local authority level on placements.
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.
The accompanying report, Understanding children’s social care sufficiency in England, found the amount of suitable accommodation available for children in care and care leavers, also know as ‘sufficiency’, is shaped by a complex set of factors, rather than by the volume of provision alone. Workforce capacity, affordability of housing and lack of foster carers has led to children being placed further from home, or in placements not suited to their needs.
The report details how house prices are a key structural driver of the availability of children’s homes; workforce constraints, including difficulties in recruiting registered managers and suitably qualified staff, are affecting sufficiency in children’s homes provision. A lack of available foster carers is linked with more, and younger, children being placed in children’s homes (an issue the government says it is tackling through a new £12.4m Fostering Innovation Fund).
Pressure on the social care system has increased in recent years, contributing to children being placed further from home when suitable specialist provision is not available in their local area. Local sufficiency is affected by local authorities competing for placements, which reduces availability for local children.
Ofsted has been granted new powers under the Children’s Wellbeing and Schools Act 2026, enabling civil penalties to be issued against any person ‘carrying on’ (operating or managing) an unregistered children’s home. An expanded unregistered social care team will bring unregistered investigative work into one place with greater capacity to carry out investigations, Ofsted said.
Updated guidance has been published on registering children’s homes to prioritise providers offering specialist provision in the right places.
Commenting on the renewed focus Sir Martyn Oliver, His Majesty’s Chief Inspector, said: “Illegal homes are a scourge on our society, placing profit above children’s welfare and safety. It’s absolutely right that we do everything in our power to prevent children from being placed in unsafe and unsuitable accommodation.
“The research published today highlights that we need the right homes in the right places, not more homes in the wrong places. Changing our approach to focus on sufficiency, as well as rooting out criminality, will ensure we’re playing our part in tackling this issue.”
