A devastating parliamentary inquiry has laid bare a systemic failure in children's social care, revealing that hundreds of vulnerable young people are being housed in illegal, unregistered care homes.
Widespread Use of Illegal Placements
The Commons Public Accounts Committee (PAC) published a chilling report warning that the practice is widespread across England. Around 10% of all children in residential care are estimated to be in unlicensed accommodation, a situation that leaves them without proper oversight and potentially at serious risk.
The committee's investigation found that in September of last year, approximately 800 children were living in these illegal homes. This is despite a clear commitment from the Department for Education (DfE) to eliminate such placements by 2027.
A 'Dysfunctional System' Normalising Risk
Sir Geoffrey Clifton-Brown, the Conservative MP who chairs the committee, issued a stark condemnation. He stated that for the children identified in the report, a lack of regulatory oversight means no one can be sure their circumstances are safe, stable, or loving.
"A dysfunctional system is forcing local authorities to routinely reach for solutions which will see our nation’s children regularly put at risk," Sir Geoffrey said. "This utterly unacceptable situation has become normalised, but there is nothing normal about this unsustainable state of affairs."
Exorbitant Fees and a 'Shadow Market'
The PAC's findings follow a separate alert from the inspectorate Ofsted in December. Ofsted warned that some unregistered homes are charging local authorities as much as £30,000 per week for a single child's placement.
In the twelve months leading up to March 2025, Ofsted initiated nearly 900 investigations into potential illegal children's homes. The watchdog stated that this "shadow market" exists solely because there are not enough legitimate, registered homes to provide the specialist support these children desperately need.
The committee also highlighted other critical issues within the care system:
- Almost half (49%) of children in care in England are placed more than 20 miles from their original family home.
- Children are frequently placed in homes that cannot meet their specific needs.
- There is a severe disparity in the availability of care places across different regions of the country.
MPs further criticised the DfE for relying on an increase in foster carers to reduce demand for residential care, while simultaneously failing to address the significant challenges in actually recruiting those carers.
The report paints a picture of a children's social care system in crisis, where financial pressure and a shortage of appropriate places are leading to dangerous compromises with the welfare of some of the country's most vulnerable young people.
