As many as 100 unregistered children’s homes have been used to house young people across Liverpool in the last four years, the ECHO understands. It was revealed earlier this month how £120m was spent by local authorities across Merseyside in the last year on private children’s homes, and some of that money is being paid to house children in unregistered, illegal settings.
Briefing to council leaders
The ECHO understands as part of a briefing to group leaders on Liverpool Council, the number of unregistered settings was discussed. Intelligence indicates 53 different companies have been operating these homes in Liverpool.
It is thought at present, up to 20 children are being housed in an unregistered home. These are not children from the Liverpool area or placed in them by Liverpool Council.
Ofsted warning and prosecution
Ofsted announced in July that councils that place children in unregistered homes could see their children’s services performance ratings downgraded, and after the inspectorate carried out its first successful prosecution against this type of provider. Collectively, Liverpool, Sefton, Knowsley and Wirral Councils spent £119.6m on funding private services in 2025/6, according to responses to Freedom of Information requests.
Private care homes make up over 80% of the mix in England, with the remainder being run by local authorities and charities. The number of this type of home has skyrocketed in recent years, nearly doubling from 2,209 to over 4,000 since 2018, according to Ofsted.
Rise in providers
In that same period, the number of children in care only increased by 9%. It is thought that the rise in the number of homes is the result of new providers including private equity and property investors who do not require prior experience or qualifications to set up services, according to charity Become.
The sharp rise in the number of children’s homes has also resulted in an increase in the number of unregistered providers. All services are legally obliged to register with Ofsted, which is required to inspect them twice a year.
Firms lodging applications with Merseyside councils’ planning departments often do not show up on Ofsted records. These settings may be waiting to register with the inspectorate, or they may not have submitted an application at all.
Council response
A spokesperson for Liverpool Council said: “Vulnerable children being placed in unregistered settings in Liverpool by other local authorities is of great concern to us. We work hard with our partners, such as the police and health, to identify these settings and we take immediate action when we are made aware of them.
“Where a child is identified as being placed in Liverpool from out of the city, we contact the placing council to express our concerns and to seek assurance that the children are being cared for appropriately. We also inform Ofsted and Merseyside Police.
“Making sure that we have good quality homes for Liverpool children and young people who need this support is a priority for us. We are fully committed to ensuring that our children are safe and remain close to their schools, communities, networks and relationships.”
