Children in Care
The question
To ask the Secretary of State for Education, what assessment she has made of the potential impact of the use of private providers in the children's residential care sector on (a) costs to local authorities, (b) placement stability, (c) outcomes for children in care and (d) the availability of placements close to a child's home area; whether her Department has assessed the potential impact of private equity ownership and other profit-making business models on the cost and quality of children's residential care provision; what estimate she has made of the number of looked-after children placed in unregistered settings in each of the last five years; what steps her Department is taking to ensure that children's homes and supported accommodation providers comply with registration requirements; whether she has assessed the potential impact of unregistered care settings on risks of child exploitation, abuse and criminal activity; and what consideration she has given to introducing further measures to improve transparency and oversight in children's social care.
Answered by Josh MacAlister
The Competition and Market Authority found that costs to local authorities of placements in their own children’s home was no lower than the cost of placements from private providers. The study also found no evidence that, on average, private provision was of lower quality than local authority provision. However, it indicated that children in private provision are more likely to be placed out of area and have greater placement instability. The study is available at: https://www.gov.uk/government/publications/childrens-social-care-market-study-final-report/final-report.
The department is taking forward a package of measures, including through the Children’s Wellbeing and Schools Act, to fix the broken care market. In September 2025, the Children’s Commissioner estimated there were 669 children in unregistered settings, down from 775 in 2024. We are working to improve our data, including collecting data from local authorities for 2025/26.
Unregistered settings are unlawful and pose significant safeguarding risks. New powers for Ofsted to fine unregistered providers will enable quicker action to address this. We are also improving transparency through enhanced data, oversight and inspection reforms.
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