A new report from the Public Accounts Committee (PAC) has identified serious and persistent failures within England’s residential care system, revealing that hundreds of vulnerable children are being placed for extended periods in accommodation that is operating unlawfully.
The PAC’s inquiry into the financial sustainability of children’s care homes found that in September 2024 nearly 800 children, approximately one in ten of all children in residential care at that time, were living in homes or supported accommodation that were not registered with Ofsted. Operating a children’s home without registration is unlawful, and such settings fall outside routine inspection and regulatory oversight.
While local authorities maintain that unregistered placements are used only as a last resort when no regulated provision is available, evidence from the Children’s Commissioner presented to the Committee indicates that these placements are not short-term. On average, children placed in unregistered settings during 2024 remained there for around six months, raising concerns about safeguarding, care quality and legal compliance.
The use of unregistered accommodation is particularly concerning in cases where children are subject to deprivation of liberty orders. During 2024, 1,280 children were held in care without their consent under such orders, yet some were accommodated in settings lacking lawful registration or inspection.
Shortage of placements and uneven geographical provision
The report describes a residential care system under sustained pressure from a shortage of appropriate placements, with marked regional disparities. Almost half of children in residential care are placed more than 20 miles from their family home, and there are currently no secure children’s home places available in London.
These distances, the PAC notes, impede effective social work oversight, limit children’s access to local services and family contact, and increase pressures on already stretched local authority teams. The Committee has called on the Department for Education (DfE) to set out how it will ensure provision is developed in areas of greatest need.
The DfE has indicated that reforms to address the shortage of places may take up to two years to have a measurable impact. In the meantime, efforts to reduce demand by expanding the foster care workforce have shown limited success. The number of foster households fell by 9% between March 2020 and March 2024 (excluding kinship care), alongside an increase in the use of semi-independent placements for older children.
