The number of registered children’s homes in England has hit a record high, but providers are prioritizing profits over the needs of care, Ofsted has warned.
The watchdog said new baby homes were rising in areas of the country where housing is cheapest, suggesting the increase was mostly driven by profit and that it was “cluttering the system”.
Ofsted’s chief inspector, Sir Martin Oliver, said, “This is an ongoing national scandal.” “The most vulnerable children in our society deserve loving and stable homes but the profit motive is increasingly dictating the location and ownership of children’s homes. As a society, we are failing these children.”
Ofsted’s annual report said 4,010 children’s homes were registered by the end of March this year, an increase of 15% (520) on the previous year. This is the highest number on record, but issues with “location, affordability and suitability” are increasing, the report said.
Of the newly registered children’s homes, 160 were in the North-West, which is now home to more than a quarter of all children’s homes in England, although only 18% of children in care live there. Ofsted believes that providers have been attracted to the area because of the affordable housing.
The report highlighted “serious regional differences” in children’s services, with 88% of local authorities in London giving it a good or excellent grade, while 46% in the North-West rated it good or excellent.
Oliver said: “As a system, we are putting more stress and pressure on a sector that is already struggling, and that’s why I say this is a scandal that is throwing the system into disarray. It affects everything. It’s one complex problem after another and we need to put a stop to it now.”
The report said local authority spending on child care is expected to rise from £3.9 billion in 2015–16 to £8.1 billion in 2023–24, bringing the average annual cost of each looked after child to £97,200.
The inspectorate said unregistered children’s home providers were charging exorbitant costs, in some cases up to £30,000 a week.
The watchdog, which inspects schools and children’s homes, said it had launched almost 900 investigations into potentially unregistered homes during the 12 months to March.
“This shadow market only exists because there are not enough of the right kind of places in legitimate registered homes to take the children who most need specialist support,” the report said.
Almost nine in 10 local authorities told Ofsted that they placed children in unregistered homes because they could not find a place suitable for their needs in a registered home.
Ofsted said it was “a crisis for both children and local councils, whose budgets cannot hope to keep pace with rising costs” and urged the government to work with councils “to stop all use of unregistered children’s homes”.
The report said 84% of children’s homes were privately owned and operated, and the top 10 largest owners accounted for almost 20% of all children’s homes, meaning that if a company became unviable it would have a “huge impact” on the sector.
The government has previously announced a crackdown on profiteering in the children’s homes sector, including a “backstop” law limiting profits, which will be brought in if providers do not voluntarily end profiteering.
The inspectorate also said the number of child protection concerns in children’s homes had increased to 510 in the latest 12-month period, up from 364 the previous year – although the increase was expected due to the growing number of homes.
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