BBC News | Why illegal children's homes are being paid up to £2m per child by councils

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Illegal children’s homes—unregistered, uninspected facilities that are nonetheless being funded by local councils—are costing up to £2 million per child a year, with some placements paying £13,000 a week for a single teenager. Investigations reveal squalid conditions, inadequate staffing and the use of makeshift premises such as caravans, narrowboats and ordinary houses, yet councils continue to place vulnerable youths there because a shortage of specialist, legally‑registered homes leaves them with no alternatives for children with complex needs. Despite a 2021 ban on under‑16s in unregulated homes, around 800 children are still housed illegally, a figure driven by a booming private‑sector market, profiteering providers, and a fragmented regulatory system that has failed to enforce the ban. The resulting taxpayer waste diverts funds from early‑intervention services, prompting calls for stricter regulation, more publicly‑run homes, and a shift toward non‑profit providers to protect the most vulnerable children.

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