Councils spend over £125m a year housing vulnerable children in unregistered care homes, investigation finds

Councils in England are paying more than £125m a year of public money to place vulnerable children in illegal care homes, according to an investigation by The Guardian and the Bureau of Investigative Journalism (TBIJ).

The investigation found what it described as a booming industry of private businesses profiting from a shortage of beds in Ofsted-inspected children's homes, leaving local authorities with few alternatives but to use unregistered providers to house some of the country's most at-risk children.

According to the report, these unregistered settings are not subject to the same regulatory oversight and inspection as licensed children's homes, raising concerns about the safety and welfare standards of the accommodation.

The investigation highlighted the case of a child referred to as Princess as an example illustrating what the report called the scourge of illegal care provision affecting vulnerable children in the care system.

The findings point to a systemic shortage of registered beds for children with complex needs, which the investigation says has created conditions allowing unregistered providers to operate and profit from placements funded by council budgets.

The Guardian and TBIJ said their investigation was based on data and case examples gathered as part of their reporting into the placement of vulnerable children by local authorities across England.