Select committee: Public Accounts Committee
Conclusion 14
61st Report - Financial sustainability of children’s care homes
Published 16 Jan 2026
Addressed to HM Treasury
Public Accounts Committee Financial sustainability of children’s care homes All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
There are disparities in the number and types of children’s home available in different areas across the country, particularly for children with more complex needs.29 For example, there are no secure homes across all of London, while South West England has disproportionately few homes with specialist provision for children with mental health problems.30 These disparities can lead to children being placed in unsuitable placements with, for example, 49% of children placed in homes more than 20 miles away from their original family home.31 The Children’s Commissioner told us that inappropriate placements may lead to criminalisation, exploitation or a lack of care.32 In addition, the Association of Directors of Children’s Services told us that when children are placed far from their local authority, it makes it difficult for social workers to know and understand the support available. This negatively impacts both outcomes and costs by making it more difficult for social workers to spend time with children and build, establish and maintain relationships. When children are moved multiple times it 26 Q 5 27 Qq 6-10 28 Qq 43-44 29 Qq 39, 42 30 Q 40; C&AG’s Report, figure 9 31 C&AG’s Report, para 1.17 32 Q 3 11 is also more difficult to access support from different local authorities.33 We received written evidence highlighting that when children are placed hundreds of miles from home it can cause trauma and loss of identity, as well as significant cost.34
From: Public Accounts Committee, 61st Report - Financial sustainability of children’s care homes (HC 1233), 16 January 2026
Government response
The government responded to the whole report on 1 April 2026 (deadline 16 March 2026).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees with the Committee's recommendations on five of the six areas it addresses (it states agreement for recommendations 1, 3, 4, 5 and 6), but disagrees with the recommendation to commit to reducing unregistered placements to zero by the end of 2027.
- On unregistered homes, the government disagrees with the recommendation and says it "has, however, not made a commitment" to reduce the number to zero by the end of 2027, because "Setting a fixed deadline does not sufficiently reflect the complexity of the issue."
- From summer 2026 "(subject to Royal Assent)", Ofsted will be able to issue uncapped fines to providers operating unregistered settings, and Ofsted will also consult on reforms to the inspection of local authority children's services.
- On regional collaboration, the government agrees with the recommendation, with a target implementation date of Spring 2029. Its "vision is for every LA to be part of an RCC" (Regional Care Co-operative), with an Expression of Interest in Spring backed by over £10 million to support up to six new RCCs in 2026.
- On private providers' finances, the government agrees and will establish a Financial Oversight Scheme through the Children's Wellbeing and Schools Bill, with timings "subject to Royal Assent", expected to cover about 40 providers.