Councils across England are reportedly spending in excess of £125 million annually to place vulnerable children in care homes that are not legally registered. This finding comes from an investigation by The Guardian and the Bureau of Investigative Journalism (TBIJ).
The investigation uncovered a growing industry where businesses are profiting from a shortage of beds in Ofsted-inspected homes for at-risk children. Local authority payment records indicate that over the past two years, more than 480 private companies have received £250 million for 1,800 unlawful placements.
Operating an unregistered children's home is a criminal offence, yet almost every council in the country uses these facilities. Ofsted has recently adopted a tougher stance, securing its first conviction last month against Catalyst Care Ltd, which was fined £92,000 for operating three unregistered homes in Kent.
The children's commissioner for England, Rachel de Souza, stated that the findings reveal systemic failings, noting that illegal children's homes have been allowed to operate in the shadows, treating children as a business opportunity.