Financial sustainability of children’s care homes

The numbers of looked after children increased by 19% to 83,360 between 2015-16 and 2023-24. Around 16% of looked after children are accommodated in children’s homes. Over the same period, local authority spending on children’s homes has increased rapidly, from £10.7bn to £14.6bn, with a 35% increase (to £97,326) in the average annual cost to … Show more

The numbers of looked after children increased by 19% to 83,360 between 2015-16 and 2023-24. Around 16% of looked after children are accommodated in children’s homes. Over the same period, local authority spending on children’s homes has increased rapidly, from £10.7bn to £14.6bn, with a 35% increase (to £97,326) in the average annual cost to look after each child. Costs are projected to increase further without reform. The Department for Education (DfE) recognises the challenges, and has proposed changes including greater financial oversight and transparency over private providers, and profit caps. The PAC held an inquiry into children’s services in 2019 , reporting that children deserved better than slow progress on social care. The delivery date for government's programme of reforms had then slipped from 2020 to 2022, and the report called on DfE to improve the quality and cost-effectiveness of care in measurable ways. It also recommended that DfE should set out how it would understand and reduce cost variations. With significant concerns reported with the children’s homes market by local authorities and stakeholders, the National Audit Office reports in 2025 on monitoring and managing the children’s homes market . The NAO’s study examines DfE’s oversight of the market in the wider context of children’s social care. Following the NAO’s report, the PAC will take evidence from senior DfE officials and others. Likely topics for scrutiny include drivers of rising costs, suitability of settings for children, and how DfE is working to ensure the financial sustainability of the sector. If you have evidence on these issues, please submit here by 23:59 on Monday 3 November 2025. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. You can request anonymity or confidentiality when you send evidence, but it is the Committee which decides what information to publish and how. It may treat submissions confidentially, even where you have not requested this. Please note that the Committee’s inquiry cannot assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues . Show less