Select committee: Public Accounts Committee

Conclusion 21

61st Report - Financial sustainability of children’s care homes Published 16 Jan 2026 Addressed to HM Treasury
Conclusion (the committee's words)
We asked the Department how it intended to overcome these barriers, and those of the cost of living, given these would not be addressed through the fostering hub. It told us that local authorities have a lot of discretion over the support they offer foster carers. It has seen, for example, local authorities provide small capital grants to allow for conversions and extensions of homes, or offer deductions on council tax. It is also expecting its pilot regional organisations to go further with the model of providing incentives.55 However, it told us it does not yet systematically encourage and direct local authorities in their approaches.56 Monitoring private providers

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.

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