Northumberland County Council's cabinet has approved a £2.1 million investment to purchase and convert a property in rural Northumberland into a residential home for children with complex needs. The £1.2 million house in Ulgham, known as Fairwinds, will serve as a base home, with two additional nearby houses providing two extra spaces.
Strategic Move to Reduce Budget Overspend
The initiative is part of a broader strategy to alleviate pressure on the children's services budget, which overspent by nearly £5 million in the 2025/26 financial year. Despite the significant upfront cost, the council expects to recoup its investment within three years due to the high expenses associated with private providers. The Department for Education contributed most of the funding, with the council's £458,000 share set to be paid off in ten months. The new scheme is projected to save £569,000 annually.
Currently, the six placements linked to this project cost £1.92 million per year, while the forecast annual running costs of the six-place children's home are £1.351 million. These savings do not include potential future property acquisitions.
Cabinet Member Explains Rationale
Councillor Guy Renner-Thompson, cabinet member for children's services, outlined the reasoning behind the council's approach. He noted that children with additional needs have become increasingly complex due to advances in medical science, leading to higher care costs. Private providers often charge £10,000 to £40,000 per week for 24-hour care, with some accused of profiteering.
“What we're trying to do is bring that service back in house,” Renner-Thompson said. “Instead of the council paying for the profits of private care homes, we do it ourselves. For a project to have a ten-month pay-back is extraordinary. We pay significantly less to run it ourselves. We're not beholden to shareholders looking to make a profit, and we have a lot of the expertise in house already. It's a no-brainer for us to go down this route.”
Addressing Community Concerns
Renner-Thompson also addressed potential objections from local residents, emphasizing that misconceptions often arise about the nature of these homes. “Local communities can pushback when one is opening, but nine times out of 10 you don't know they're there. People have in their minds that they're naughty boys' homes, but that's not the case. These are some of the most vulnerable people in our society. I would encourage people not to think that. It's good for the children and it's good for the overall council finances.”
Current Placement Statistics
As of April 2026, 94 children from Northumberland were living in residential children's homes, with 79 placements externally commissioned. Of those, 10 are within Northumberland, 32 in neighboring authorities, and 37 further afield.
Government Action Against Exploitative Providers
Last year, the government invested £53 million to create 200 new placements in council-run homes through its Plan for Change, targeting children with complex needs at risk of being deprived of their liberty. The government reported that 30 placements cost over £1 million each, with providers sometimes siphoning off more than 20% of costs for profit. One teenager with SEND and mental health needs reportedly lived in a caravan for two months at a cost of £75,000.
