London, December 02, 2025
A crisis involving unregistered children’s homes in England has intensified, with at least 775 children currently living in accommodation lacking official oversight as of September 2025. This issue poses grave safeguarding risks and imposes a significant financial burden on taxpayers, estimated at nearly £440 million annually.
Scale of the Problem
Recent official data reveals a sharp rise in unregistered children’s placements, with 1,056 cases reported last financial year — a figure widely believed to underestimate the true scale. Since 2020, reports to the regulator Ofsted have surged, reflecting a rapid escalation of this previously limited phenomenon. These unregulated settings exist across England and raise grave concerns given the absence of formal inspection or monitoring processes.
Financial Burden
The economic cost is substantial. Local authorities spend close to £440 million yearly on these placements, with fees disproportionately benefiting private providers rather than improving care quality. Remarkably, 33 children are housed in placements costing over £1 million annually each, highlighting exorbitant charges in an unregulated market.
Quality and Conditions Concerns
Children are receiving care in a patchwork of unsuitable environments. These include private rental properties, caravans, holiday camps, and even AirBnBs. Without registration, no checks ensure the safety, quality of care, or suitability of adults responsible. Hundreds of children face isolation and inadequate supervision nightly, jeopardizing their well-being.
Root Causes
The crisis is deeply rooted in systemic shortages, notably of foster carers, which have forced a reliance on emergency residential placements. By 2023, residential care accounted for 40% of all children’s placements—displacing family-based options that better meet children’s needs. These developments expose failures in earlier intervention, local planning, and resourcing across the children’s social care system.
The growing reliance on unregistered homes not only endangers vulnerable children but also strains public finances and undermines the integrity of care provision. Addressing these challenges demands urgent policy attention, improved regulatory frameworks, and increased investment in foster care to reduce dependence on costly, unsafe emergency placements.