On 17 November, the Public Accounts Committee (PAC) held a crucial scrutiny session into the financial sustainability of children’s homes, hearing evidence from key stakeholders, including:
- Joe Lane, Deputy Director of Policy and Projects, Office of the Children’s Commissioner
- Rachael Wardell, President, Association of Directors of Children’s Services
- Dr Mark Kerr, CEO, Children’s Homes Association
The session highlighted several pressing issues affecting the sector:
- Children placed far from home, disrupting family and community ties
- Delays in Ofsted registration, creating bottlenecks for new services
- Recruitment challenges, with shortages of experienced staff
Dr Mark Kerr addressed the growing debate around fees, explaining that higher costs reflect the realities of delivering high-quality care for children with complex needs:
“While we recognise that costs have gone up, costs have gone up everywhere. Between 60% and 80% of costs in children’s homes are staff. Over the past 10 years, the cost of residential care has doubled, but so has the national minimum wage. Utilities have gone up. The public rhetoric of residential care being profiteering is not true across the piece as such.”
This underscores that staffing, essential for safe, therapeutic care, is the largest cost driver alongside inflation.
Unregistered placements: a growing risk
The committee also expressed serious concern that around 800 children are currently in unregistered homes, which is unlawful under Ofsted regulations. Members were clear: this practice must stop. In response, Ofsted have said it is committed to tougher enforcement action and faster prioritisation for urgent registrations.
The discussion reflects what we see in practice: providers are still being approached by local authorities for urgent, unregistered placements. However, the regulatory risk lies squarely with providers—and with Ofsted tightening its enforcement approach, compliance is more critical than ever.
If you require any advice or assistance regarding placements or Ofsted registration, our Regulatory Team is here to help.
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