Hike in number of children's homes sparks fears over quality of care placements

A sharp rise in the number of registered children's homes in England in the past year has sparked concerns about the quality of care placements.

After Ofsted reported a 15% rise in the number of registered homes in the year to March 2025, the Children's Homes Association (CHA) said this was being driven by "new and inexperienced providers" and "raised grave concerns".

The CHA, which represents providers, also sounded warning about children being placed in residential care inappropriately due to a shortage of foster carers, and in relation to the ongoing trend towards registering smaller homes, for which it said there was "no evidence".

The Association of Directors of Children's Services (ADCS) also expressed its wariness about the increasing registration of smaller homes, along with the further concentration of placements in certain regions, both of which risked leading children to be placed far from home.

Accelerating growth in number of children's homes and places

Ofsted's annual data on registered children's social care provision showed that the ongoing growth in the children's social care sector had not just continued, but accelerated, in 2024-25.

The number of mainstream children's homes grew by 15% in 2024-25, compared with 12% in 2023-24, while the number of registered places in these homes increased by 11% in 2024-25 compared with 9% the previous year.

This means that, since 2020, there has been a 66% rise in the number of mainstream homes and 42% growth in the number of registered places. By comparison, the number of mainstream (non-kinship) foster care households in England fell by 10% from 2021-24.

Smaller homes and increasing private sector share

Ofsted also reported a trend towards homes becoming smaller, with the mean average capacity of those registered in 2024-25 being three places, compared with four places for children's homes as a whole.

Also, most of those registered in 2024-25 were privately operated, increasing the private sector's share of children's homes of all types to 84%, up from 82% in 2024 and 78% in 2021.

The concentration of mainstream homes in certain regions also increased, with the North West's share rising from 25% to 26% in 2024-25, well above its 18% share of England's population of looked-after children.

The region also saw the largest rise in the numbers of both registered places and homes, reflecting trends seen in previous years. The East Midlands also had an outsized share of homes (12%) and places (11%), compared with looked-after children (8%).

At the same time, performance improved across the sector, with 82% of homes inspected in 2024-25 rated good or outstanding, compared with 80% in 2023-24.

Provider body sounds alarm

This was welcomed by the CHA, which said it reflected "the hard work and commitment of providers and staff across the sector".

However, CHA chief executive Mark Kerr said "the unprecedented number of new registrations for children’s homes - particularly from new and inexperienced providers - raises grave concerns".

"Worryingly, we also continue to see residential placements being made for children who should otherwise be cared for within foster families due to the acute shortage," Kerr added. "Yet there is no indication or belief from experts that the foster carer base will increase to meet this demand."

He also warned that the trend toward registering smaller homes was "another cause for concern".

"There is no evidence to support this shift to smaller homes," Kerr said. "This increases the pressure on recruitment, particularly for registered managers, and Ofsted."

Concerns over children placed far from home

This issue was also picked up by the ADCS, with the chair of its standards, performance and inspection policy committee, Jo Fisher, saying: "The trend towards smaller homes with fewer beds and the continued regional concentration of children’s homes raises questions about placement availability and the consequences for children who are placed far from their families and communities as a result."

She also pointed to the increasing share of homes being privately operated, in the context of government efforts to support councils to develop and run new provision and tackle alleged profiteering in the sector.

The current Children's Wellbeing and Schools Bill includes measures to address this, including setting up a system by which the Department for Education (DfE) can monitor the finances of the hardest to replace providers and giving ministers the power to cap profits should other policies not reduce levels.

Fisher added: “More than four in five children’s homes are privately operated and while government is supporting local authorities to open up new provision and drawing up plans to address concerns about the levels of profit being seen in the sector, it will take some years for these measures to translate into action."

Impact of long waits for registration

The data comes with Ofsted having reported that providers are currently having to wait "several months" for a decision on applications to register a children's home because of the sheer number of cases it is handling.

This is far longer than Ofsted's usual timescales, with its guidance stating that it usually takes 47 days to make a decision when it has all the necessary information, with providers asked to allow 16 weeks between the start of their applications until they open their homes.

Kerr said the situation was "unacceptable", because providers had to name both their registered manager and responsible individual on their application form, meaning they incurred "significant" salary costs while waiting to learn if their homes would be registered.

Reforms needed to tackle 'crisis'

He urged the government to make a number of immediate reforms to tackle the "current crisis" around children's homes, including:

• A strengthened location assessment for potential new homes, under which the relevant local authority must confirm to Ofsted that there is genuine need for the provision, something the government is committed to.
• A fast-track application process for "highly experienced providers with a proven track record of good or outstanding ratings", where the application is supported by the relevant local authority.
• Allowing applications to be made without a named registered manager or responsible individual but requiring these roles to be filled before a registration certificate is issued.
• Portability of registered manager status, allowing "proven" managers to transfer their status to new homes without having to reapply, a move also supported by Ofsted.
• Reducing inspection frequency for homes rated good or outstanding, and with no outstanding concerns, from one a year to once every two years.