Ministers Pressed to Address 'National Scandal' of Illegal Child Social Care in England
The children's commissioner has issued a stark warning, urging ministers to confront what she describes as a 'national scandal' in England's shadow child social care system. This call comes as a new report exposes a dramatic surge in the number of vulnerable children being housed in unregulated settings, with placements in illegal homes increasing by more than 370% over five years.
Rising Cases of Unregistered Placements
Analysis of Ofsted data reveals that cases of unregistered children's homes in England have skyrocketed from 144 in 2020-21 to 680 in 2024-25. Policy analysts at Public First, who conducted the research for the charity Commonweal Housing, indicate that this figure likely underestimates the true scale of the problem. Under the Care Standards Act 2000, all children's homes are legally required to be registered with Ofsted, yet this mandate is being widely flouted.
Vulnerable children are increasingly being placed in temporary, unregulated accommodations such as caravans, Airbnbs, and holiday camps. These settings pose significant risks, potentially leading to 'accumulation of increasing levels of harm' for children who have already endured immense distress, according to the report.
Exorbitant Costs and Provider Practices
Private companies, which operate more than 80% of child residential homes in England, have been accused of charging local authorities 'exorbitant' fees for these unsuitable placements. The report notes that it is 'not unusual' for for-profit providers to demand between £20,000 and £40,000 per week for each child when a bed in an Ofsted-inspected home or fostering placement is unavailable.
Social workers and child social care leaders describe facing a 'Hobson's choice': placing children with complex needs in last-minute, uninspected settings or leaving them at police stations or on the streets. Senior practitioners report that unregistered placements, once a rare occurrence seen 'once every six months', now cross their desks 'at least once a week'.
Systemic Failures and Risks
Gil Richards from Public First, the report's author, emphasized that while not every unregistered placement is poor, the shadow system means the 'state just doesn't know what is happening to these children'. Some registered providers fear accepting high-risk children—such as those linked to gangs, who go missing repeatedly, or display extreme behaviour—could damage their Ofsted ratings, leading them to leave beds empty rather than offer care.
Disturbing accounts from social workers include placing a child as young as five in an illegal setting and another forced to use a caravan. A former director of children's services admitted that senior figures are aware of acting unlawfully but feel compelled to do so 'when there was no other solution'.
Official Responses and Legal Actions
Children's commissioner Dame Rachel de Souza, who published a report in January finding 669 children in unregistered homes on 1 September 2025, stated: 'I have been warning about this practice for years, and I need leaders at every level to grip it urgently.' She highlighted that hundreds of children with complex needs lack regulated safeguards due to insufficient safe options.
Children's minister Josh MacAlister warned that those running illegal settings 'must be registered with Ofsted or face serious consequences'. He pointed to new laws enabling Ofsted to issue unlimited fines and shut down illegal homes, as part of efforts to crack down on this 'scourge'.
Ashley Horsey, chief executive of Commonweal Housing, called the report 'very worrying', noting it reveals children are at the 'sharpest end of a failure of policy and regulation' when local authorities have no alternatives.
Case Studies and Statistics
The dangers of unregulated settings were starkly illustrated by a recent case where a 15-year-old at-risk teen, moved 300 miles to escape sexual exploitation, was placed in an unregistered home. There, she was plied with alcohol and sexually assaulted by two ex-soldiers paid by a private firm to care for her, as first reported by LBC and the Bureau of Investigative Journalism.
The children's commissioner's report found that 44% of children in unregistered placements were in illegal children's homes, with 7% in Airbnbs, holiday camps, or activity centres. The average placement lasts six months, but 89 children (13% of the total) had been there for over a year, including one child in a holiday camp for nearly nine months. Weekly costs for such placements average £10,500, with 36 children in placements totalling more than £1 million each.
Regulatory Challenges and Government Measures
In January, the public accounts committee labelled England's children's residential care market as 'dysfunctional', noting that one in 10 children is in an illegal, unregistered home. Despite this, no unregistered provider has been prosecuted for running unlawful settings.
Ofsted confirmed it has initiated several prosecutions but cannot comment further as cases are ongoing. A spokesperson stated: 'Too many children are being placed in unlawful settings where they're at risk of harm. The use of these placements must stop.' They acknowledged prosecutions are 'lengthy and expensive' but highlighted that measures in the children's wellbeing and schools bill will allow faster action.
Government sources cited 'huge progress in a short space of time', including an £88 million drive to create 10,000 new foster care places, addressing an area they say has been ignored for too long.
