NORTHERN ENGLAND — Councils in England have placed approximately 800 children in unregistered homes since a 2021 government ban on housing under-16s in unregulated accommodation, according to the Public Accounts Committee. Some providers are charging local authorities as much as £13,000 a week per child, with extreme cases costing more than £2 million per year.

The 2021 measure prohibited under-16s from being housed in unregulated children's homes, but the number of children placed in illegal homes by councils has increased since the ban took effect. About 10% of children requiring residential care are placed in illegal homes, and Ofsted maintains a tally of unregistered children's homes. Children as young as 11 have been housed in homes not registered with or inspected by Ofsted, including flats, tents, caravans, narrowboats and a home under police surveillance for suspected gang activity.

In one case, a provider is charging a council £13,000 a week to care for a vulnerable teenage girl who requires the support of three full-time members of staff, in a home that contains no books, toys or games. In a separate arrangement, the tenant of a council house is subletting the property to a company that charges a local authority thousands of pounds per week for children's home care. In Lancashire, a 12-year-old boy was placed in the care of a company that uses caravans and narrowboats, with children frequently moved between the two, while his brother had been in a stable, less expensive foster placement for years. In Portsmouth, a council placed a 14-year-old girl at risk of jumping out of windows in a flat above a shop.

Spending by councils in England on children's residential homes has doubled in the last four years and tripled in the last eight years. The average placement in a registered home costs £6,100 per week, or £318,000 per year. The number of registered children's homes in England doubled from 2,209 to 4,455 in eight years, according to Ofsted, while the number of children in care rose by 9% over the same period. Private equity firms and property investors have entered the market, and some children's home companies recorded profits of 40% four years ago.

"This is the culmination of 10 years of systemic failure to develop specialist provision for our most vulnerable children," said Dr Mark Kerr, chief executive of the Children's Homes Association, who described the sector as "Wild West".

One in five children in care live at least 20 miles away from where they grew up, according to Clare Bracey of the national charity Become. According to the Local Government Association, rising placement costs reduce funding available for earlier support that may prevent children entering care. Staffordshire Council, which paid £2.6 million last year for the care of a teenage girl in a registered placement requiring up to five staff, said there is a national shortage of specialist homes and that the NHS pays half of the cost of the placement.