We tell parents they are not fit to raise children, then put their sons and daughters in illegal children’s homes: the latest scandal of a broken care system
Hundreds of children in care are living in caravans, holiday parks and Air BnBs, some for as long as three years, an investigation by the Children’s Commissioner has found.
Dame Rachel de Souza, the Children’s Commissioner, found that 669 children were living in illegal children’s homes on September 2025.
These children are some of the most vulnerable in the care system: nearly 60% have complex additional needs or disabilities requiring an EMCP, meaning they likely also receive support from other services beyond social care. More than one third (36%) receive support from child and adolescent mental health services. Many are subject to deprivation of liberty orders.
Councils send children in their care to these homes despite knowing that they are illegal.
Legal homes are registered with Ofsted; they are inspected at least once a year and visited by an independent person every month.
Illegal homes are not registered with Ofsted and do not have this safety net; they have the least amount of scrutiny, leaving children at an increased risk of harm. There is no process for assessing the quality of their care, or the suitability of the adults providing that care. The homes are less likely to be known to other stakeholders, such as schools and health professionals.
To be clear, the existence of these safeguards does not always protect children in registered homes. But there is a legal basis on which to proceed when care failures take place.
Councils do not save money by using illegal children’s homes; if anything, the opposite is true. Councils spent an estimated £353 million on illegal children’s homes in 2025. The average weekly cost of a placement was more than £10,000 – the equivalent to more than half a million pounds a year. Almost all illegal children’s homes are privately-owned. This is a rich source of income for landlords.
Why do councils use illegal children’s homes, knowing that they are putting children at risk as well as breaking the law? It is response to a crisis, when a child needs a home immediately or at short notice. This is usually intended as a short-term solution, for a matter of days or weeks, until long-term accommodation is found or the child’s legal status is determined. Some illegal homes have subsequently registered with Ofsted and regularised their status.
The problem with short-term solutions in children’s services is that they have a habit of drifting into something much longer: the immediate risk has been addressed, children are safe, if not settled, and the crisis team moves on to more urgent matters. Three to six months is not uncommon, while some children are in homes that are illegal for more than one year.
Illegal children’s homes are symptomatic of deep failings across the care system. Local authority children’s services are responsible for the wellbeing of children in their care. It should not need stating that this includes being able to provide a home where children can live safely and fulfil their potential. Right now, too many children and young people are being removed from one precarious situation and put into another, be it children’s homes or foster care.
In the short term there is little that local authorities can do to resolve the situation. They have outsourced provision of children’s homes to private companies, trusting the market to ensure a supply of homes in the right location. Clearly, this approach has failed. Although some providers are committed to doing their best for children, the sector as a whole prioritises profit over care. The market is broken, with demand and supply completely out of balance.
In my view, the Government’s chosen solution of a profit cap will fail. Profit itself is a blunt instrument, when owners and senior management earn most of their income from debt and other financial arrangements, tax dodges, inflated salaries and bonuses. All of this is legal and standard practice in the world of business. But the care of vulnerable children and young people should never have become a business.
The only sustainable solution is for local councils to be empowered to invest directly in local homes for children in care, working in partnership with local stakeholders in health, housing and education.
Next time someone says that this vision is unaffordable, consider the £350 million spent every year on illegal children’s homes alone and the impact this has on young people. The truth is that we cannot afford NOT to invest in the care system.