Government announces £50m funding for council-run placements for children at risk of deprivation of liberty

This comes as a significant shortage of placements to meet young people’s needs over recent years has seen them being placed into accommodation that is operating illegally by not registering with Ofsted.

The Government noted: “Data from the Children’s Commissioner shows this also comes at an eye-watering cost to councils, who spend an estimated £440 million a year on unregistered placements.

“Over 30 placements were costing over £1 million each - and this in a world where private providers sometimes siphon off over 20% of placement costs for private profit.”

Through the Children’s Wellbeing and Schools Bill, new laws are also being brought in to increase the transparency of private providers over their finances, with a “backstop provision” to introduce a profit cap if providers don’t voluntarily bring an end to exploitative practices.

The 200 new children’s home placements will be funded through a £53 million investment.

The Government noted this will be the “first time” it has specifically targeted funding at children who have such complex needs that they are at risk of, or have been, deprived of their liberty. 

It said: “Children in these situations need extra support from social workers and care teams to stop them running away from home and from harming themselves and others.

“The new homes will break down barriers to opportunity by providing support for these young people’s complex behaviour and mental health needs in safe and stable environments.”

High Court judges have issued a series of judgments in recent years expressing concern at the shortage of placements.

In January 2024, HHJ Moradifar, sitting as a High Court judge, warned it was time to address the “silent crisis” of finding safe placements for children with profound needs, in a case where a teenage girl had been residing in a hospital due to a lack of a suitable placement.

Children’s Commissioner Dame Rachel de Souza said: “My work as Children’s Commissioner has shown there are too many children who need brilliant care who have instead ended up in illegal – and terrible – accommodation. Instead of receiving care and support, they are side-lined, ignored and left waiting while services fail to take responsibility for these children.

“This funding, and the social care provisions of the Children’s Wellbeing and Schools Bill, is an opportunity to bring that to an end. It will increase the number of loving, safe homes for this group of children – whose needs are often urgent and complex – and must provide loving, therapeutic, joined-up care to help these children flourish.”

Minister for Children and Families Janet Daby said: “The children’s social care system has faced years of drift and neglect, leading to a vicious cycle of late intervention and children falling through the cracks.

“One of the worst symptoms of this is when some of the most vulnerable young people in society are shunted from pillar to post - traumatised by shameful illegal homes, while some private companies rack up ludicrous profits. 

“Through our Plan for Change and our Children’s Wellbeing and Schools Bill, this government is enabling every child to achieve and thrive by investing in the places children need, cracking down on profiteering with new laws, and rebuilding family support services so parents and carers get the help they need to keep their children happy and safe in loving homes.”

Lottie Winson