Hundreds of children are living in illegal, unregistered homes, a report by the Public Account Committee (PAC) has found. As of September 2024, almost 800 children – amounting to 1 in 10 of those in residential care – had been placed in such homes, with the mean length of placements longer than six months (185 days). These settings operate completely outside of the law, without routine inspection or basic safeguarding standards.
The report highlights the risks faced by children in such settings, including criminal and sexual exploitation, as well as deprivation of liberty. Indeed, 1,280 children in care were held under deprivation of liberty orders without their consent. A further threat to children’s safety, stability and wellbeing includes the pattern of children being placed far from home, with almost half placed more than 20 miles from their family homes; this pattern points to a systemic shortage of placements, with foster carers having decreased 9% between March 20 and 24, and a complete lack of secure homes for in London.
Profits are shown to remain ‘excessive’, with 7 in 10 of the largest providers owned by private equity firms. Article 39 has long warned of the risk of a profiteering in the sector; according to a longitudinal study led by Oxford university, privately run homes are consistently judged as poorer quality. Furthermore, public funds aimed at meeting children’s needs are instead absorbed by stakeholders, and high levels of loans lead to an unstable market, where homes can be shut without warning.
Shockingly, despite such homes being illegal, local authorities are not obliged to inform Ofsted when children are placed in them, which highlights the deeply dysfunctional climate in which they are enabled to operate.
Jodie Wickers, Executive Director of Article 39, said
“This is meant to be a care system, not a marketplace. The children affected are not abstract statistics. They are real children and young people, often with the most complex histories and needs, who require more consistency, more stability and more care – not less. Placing them in illegal settings strips away protections at precisely the moment they most need them.
Through Article 39’s On Your Side service and our youth activism work, we hear directly from children and young people about the consequences of unsafe placements, instability and the absence of care that feels genuinely protective. These harms are not hypothetical or future-facing; they are happening now, in children’s everyday lives.
The Committee reports that the Department for Education expects it will take at least two years before improvements begin to address the shortage of placements. Even if reform begins immediately, implementation will take far longer. System change is rarely linear. Reforms are delayed, diluted or paused, and timetables slip. In the meantime, children continue to live in unlawful and harmful conditions, with no credible interim plan to protect them. Children and young people cannot be treated as collateral damage while the government decides what kind of system it wants.
We urge that the DfE sets out a clear, time-limited plan to eliminate the use of illegal homes, to support local authorities to develop home-grown placements which put children above profit, and to urgently address the needs of children living in unlawful accommodation without delay. Pertinently, in our ongoing #Keepcaringto18 campaign, we continue to stress that the use of care-less regulated accommodation for children aged 16 and 17 should be given equal weight, so that no child in care should be forced to live without care”.
