Why illegal children's homes are being paid up to 2m per child by councils

A children’s home is described as physically run down, unregistered, and therefore illegal, while charging a council £13,000 per week to care for a vulnerable teenage girl needing three full-time staff members. The home contains no books, toys, or games, and shows signs of damage and neglect. Nearby, another illegal home is run from a council house and sublet to a company charging a different local authority thousands of pounds weekly. A prior government ban targeted unregulated homes in England, after reports found children as young as 11 placed in unregistered settings including squalid flats, tents, caravans, narrowboats, and police-surveilled premises. Despite a 2021 ban on under-16s, councils facing accommodation pressures are placing more children in illegal homes, with costs reported up to £2 million per child per year. The sector is characterized as a “Wild West” due to systemic failure to develop specialist provision.

"The bungalow doesn't look much like a children's home. A sheet of privacy film wrongly placed outside a window is peeling. Inside, the wallpaper is flaking, carpets are frayed and doors are broken. The children's home is unregistered and therefore illegal but the provider is charging a council elsewhere in the country 13,000 a week to care for a vulnerable teenage girl. She requires the support of three full-time members of staff. There are no books, toys or games. Just a few miles away, another illegal children's home is being run from a council house."

"Five years ago, my reports into such placements led directly to a government ban on the use of unregulated children's homes in England. I found that children as young as 11 were being housed in homes that were not registered with or inspected by Ofsted. These included squalid flats, tents, caravans, narrowboats and a home under surveillance by the police for suspected gang activity. I also exposed how one girl was trafficked directly from her home and sexually abused, while a boy was kidnapped from another home to sell drugs. A Newsnight investigation said teenagers were being abandoned to organised crime."

"The 2021 ban on under-16s being housed in such homes was meant to bring an end to the practice. But in reality, councils struggling to accommodate children are placing more of them than ever in what are now illegal homes - at huge taxpayer expense. I've now learned of unregistered placements that are costing as much as 2m per child a year. The sector is a "Wild West", according to Dr Mark Kerr, chief executive of the Children's Homes Association."

""This is the culmination of 10 years of systemic failure to develop specialist provision for our most vulnerable children," he says. While the majority of children are either fostered, adopted or placed in legal children's"

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