“Government drift and Ofsted rhetoric are pushing children into crisis placements,” warns The Children’s Homes Association
FOR IMMEDIATE RELEASE | CHA response to Ofsted Annual report of His Majesty’s Chief Inspector of Education, Children’s Services and Skills 2024/25
The Children’s Homes Association (CHA) has accused government and Ofsted of ducking responsibility for a children’s residential care system that is “lurching from crisis to crisis”.
As expert witnesses at the recent Public Accounts Committee inquiry into financial sustainability of children's care homes, CHA set out what it described as the clearest evidence yet that children with the most complex needs are being “moved around the country like parcels” because there is no serious national plan for children’s homes.
CHA says Ofsted’s latest annual report uses sweeping language about profiteering and “the market” while underplaying government’s long-term neglect of residential care and the regulator’s own part in blocking new high-quality homes.
Dr Mark Kerr, Chief Executive of CHA, said “This isn’t a natural disaster; it’s a man-made crisis. For years, government has refused to plan properly for children who need residential care. Ofsted now talks loudly about profiteering but whispers about the fact that it can take 18 months to register a new home. Children and taxpayers are paying the price for that failure.”
Illegal (unregistered) children's homes are a symptom of system failure and "blaming ‘fees’ without fixing planning, registration delays and sufficiency is like blaming the ambulance for the car crash"
Ofsted highlights “exorbitant fees” in unregistered (illegal) placements, created when councils cannot find suitable registered homes.
CHA agrees those situations are unacceptable – but says it is dishonest to talk about fees without naming the cause: illegal placements happen after the system has failed to provide the right registered homes; emergency and last-minute placements always cost more, whoever provides them; and delays in planning and Ofsted registration are locking quality registered capacity out of the system.
Dr Kerr said: “Councils are not waking up in the morning, choosing to entrust our most vulnerable children to illegal homes. They do it at midnight when everything else has been tried and failed. Those fees are the bill for the government’s refusal to plan and for a regulatory system that reacts to systemic demand. Blaming ‘fees’ without fixing planning, registration delays and sufficiency is like blaming the ambulance for the car crash.”
CHA warns that Ofsted’s criticism of “exorbitant fees” risks being read as an attack on legitimate registered homes, when in reality the shadow market is a symptom of government inaction and chronic late commissioning.
Profit vs profiteering – and who Ofsted is really talking about
Ofsted says it is “not inherently wrong” to run a social service for profit, but then frames the system as one that “prioritises profit over children’s needs”.
CHA calls this lazy and damaging. Ofsted’s own data show most registered homes are good or outstanding. Many are small, practitioner-run homes on modest margins. The most troubling financial risk does not come from local providers reinvesting in staff and services, it comes from opaque, highly leveraged ownership models, the very models being favoured by DfE policy changes, but CHA have excluded from our membership.
Dr Kerr said “We scrutinise the ownership of football clubs and newspapers more tightly than the ownership of some children’s homes groups – that’s scandalous. But instead of focusing on those business models, Ofsted has reached for a big rhetorical brush and painted the whole sector as morally suspect. That might make headlines, but it’s not honest and it’s not helpful.”
CHA does not represent offshore or private-equity-owned providers. It has consistently warned that crude profit caps are “political window dressing” that will deter responsible investment while leaving the most problematic ownership structures largely untouched.
Clustering in cheaper areas: geography follows bureaucracy, not children
Ofsted points to a proliferation of homes in cheaper areas and implies providers are simply chasing low housing costs.
CHA says this is only half the story. Homes open where planning permission is actually granted, where Ofsted will register the service, where commissioners indicate they will place children, and where staff can be recruited.
Dr Kerr said: “Without a serious national plan, geography follows bureaucracy, not children. Providers open where the system allows them to, not always where they would be most useful. That is the direct result of government drift and a regulatory system that sends mixed signals.”
CHA has called for priority planning status for needed children’s homes, clear regional sufficiency plans, and registration fast-tracks where independent analysis shows a genuine gap in provision. We’ve been calling this out for years.
Location, affordability and suitability: a crisis designed in Whitehall
Ofsted is right that there are serious problems with the location, affordability and suitability of homes in England. CHA’s view is blunt: this crisis has been built in Whitehall, not in children’s homes.
For over a decade, residential care has been left without a national residential strategy, treated as an afterthought compared with fostering and adoption, squeezed by short-term funding pots and hampered by planning and registration delays.
Dr Kerr said: “Ministers have known for years that more children are coming into care with serious trauma, mental health difficulties and exploitation risks. Yet there is still no funded national plan for the specialist homes those children need. To then point at the independent sector and shout ‘profiteering’ is, frankly, an abdication of responsibility.”
Ofsted’s role: regulator or commentator?
CHA accepts that Ofsted must speak plainly about risk and value for money. But it argues that the language of the report – “profiteering on the backs of vulnerable children”, “easy money” – crosses a line from measured analysis into political rhetoric and risks being used to justify headline-grabbing but poorly designed policies.
Dr Kerr said: “Ofsted quite rightly tells providers to stick to the evidence, avoid sweeping statements and take responsibility for their impact. We are now asking Ofsted, respectfully, to follow its own advice.”
CHA has requested a meeting with His Majesty’s Chief Inspector to review the evidence behind the report’s claims on profiteering and fees; press for clear differentiation between responsible providers and opaque business models; and discuss how Ofsted can use its influence to force government into a genuine national plan, rather than simply criticising the symptoms of that failure.
Dr Kerr added: “We are ready to work with government and Ofsted on a serious solution. But the era of comfortable statements and finger-pointing has to end. Children deserve more than that.”
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Notes and references:
Read: CHA's written evidence submitted in advance of the hearing to the Public Accounts Committee
Media enquiries:
- Media contact: Sophie Crewdson | Media@the-cha.org.uk | 07974 081 549
- Dr Mark Kerr’s Personal Assistant - Naomi Bowler - Naomi.bowler@the-cha.org.uk | 07498 959 731
ABOUT THE CHILDREN’S HOMES ASSOCIATION
- The Children’s Homes Association www.the-cha.org.uk is the voice of providers of residential child care services and resources across England and Wales. We are a Not-for-Profit Limited Company.
- The Children’s Homes Association represents both large and small providers with membership drawn from the public, private and voluntary sectors. Some members have just one home whilst others have many homes across a wide geographic area.
- Our membership criteria excludes providers who are not ultimately owned in the UK, who do not pay tax in the UK or who receive loans or investments originating from a tax haven.
WHAT WE DO
- We provide knowledge, expert guidance, resources and day-to-day support to our members as we work together to deliver exemplary residential child care.
- We work directly with local and national government, regulators and allied public services, consulting on policy and changes within the sector.
- We ensure that the voices of our members are heard, through consultations, government responses and liaison with the media.
- We actively develop partnerships, collaborations and professional communities to share best practice – for the benefit of our members, the sector and all those cared for within it.
- Our leadership and associates bring together vast expertise across the many aspects of providing and managing residential child care, with a fearlessly child-centred approach.
OUR VISION: Exemplary residential child care.
OUR MISSION: Drive excellence in residential child care through innovation, collaboration and sector leadership.