A parliamentary committee has issued a stark warning that vulnerable children in the care system are being "regularly put at risk" due to a "dysfunctional system" that places them in unregistered homes for extended periods.
A Shadow Market for Child Care
The Public Accounts Committee (PAC) found that approximately 800 children in England are housed in settings that are not officially registered. This equates to about one in 10 of all children in residential care. On average, these young people spend six months in such placements, where a severe lack of oversight makes it impossible to know if they are in a safe or stable environment.
The committee identified a "shadow market" for child care, driven by a critical shortage of legitimate registered homes and significant delays in Ofsted's registration process. Within this unregulated sector, fees can soar to an astonishing £30,000 per child per week.
Call for Zero Tolerance by 2027
In response to these alarming findings, MPs have urged the Department for Education to commit to a clear target: reducing the number of children in unregistered homes to zero by the end of 2027. The report, published on Friday 16 January 2026, frames the situation as a systemic failure that leaves society's most vulnerable exposed to potential harm.
The core issue highlighted is the absence of proper safeguards. Without formal registration and inspection, there is no guarantee that these homes provide adequate care, protection, or a loving environment. The committee's investigation suggests the system is fundamentally broken, allowing a high-cost, high-risk alternative to operate with little accountability.
Broken System, Vulnerable Lives
The findings place renewed scrutiny on the state of children's social care in England. The placement of hundreds of children in illegal or unregistered settings for months on end points to a deep-seated crisis in capacity and regulation. The PAC's report serves as a direct challenge to ministers and officials to fix what it describes as a failing infrastructure.
The situation underscores the urgent need for:
- Accelerated processes for registering new care homes.
- Increased capacity within the regulated care sector.
- Stricter enforcement against illegal operators.
- Transparent oversight to ensure every child in care is safe.
With the 2027 deadline now set by MPs, pressure is mounting on the government to transform a system currently deemed unfit for purpose and to ensure no child is left in a care setting that operates outside the law.
