Ofsted promises to penalise councils using illegal children's homes

Local authorities who place children in care in unregistered homes could face being downgraded in performance inspections, Ofsted's chief inspector has said.

Councils may be graded as requiring 'urgent improvement' and penalised in the running of their Children's Services departments under the regulator's proposals to tackle the issue.

Sir Martyn Oliver told the BBC's Today programme that the practice of companies themselves running illegal placements was a "scandal" and that they will face fines.

He added that local authorities may be penalised under new plans for changes to inspections.

Ofsted has failed to successfully prosecute a single provider since their use first emerged around a decade ago.

In 2021, the government banned the use of children's homes which are not registered with Ofsted following successive BBC investigations.

We discovered that one girl was trafficked directly from her home and sexually abused while a boy was kidnapped from another home to sell drugs.

Children in care as young as ten were also regularly moved between caravans and narrow boats.

At the time of the ban, local authorities complained that they were forced to use them because there were not enough placements in registered children's homes.

But with the supply of children's homes doubling in the past eight years - as private equity and property investors entered the market - illegal placements might have been expected to stop.

Despite this, the practice has only grown with the cost of these placements also rising sharply.

In May, the BBC revealed that three local authorities in England spent more than £2 million each on a single child's placement in an illegal children's home last year.

Whistleblowers continue to tell the BBC about appalling conditions inside homes. One described finding a child being barricaded inside a room.

Ofsted has faced criticism for failing to successfully prosecute any providers over this period - and for excessive delays over applications to register children's homes which now stretch to 18 months.

Providers have told the BBC that they feel forced to open without registration or face bankruptcy because of the sunk costs in hiring premises and employing key staff.

Sir Martyn has now promised to help end the use of illegal children's homes.

"It's simply unacceptable. It's a scandal. It needs to end, and we're going to play our part in it," he said.

Ofsted's chief inspector said he has increased the size of the team investigating the use of illegal placements and three prosecutions are ongoing, with one awaiting sentencing.

"I'm saying it's simply not good enough if you use a children's home that's not registered with us, and we will downgrade you if that's the case", he said.

But Ofsted has previously faced criticism for not taking action sooner.

"Ofsted has always had powers to take action against illegal children's homes, but the new powers should make enforcement quicker and more effective", said Dr Mark Kerr, Chief executive of providers' body, the Children's Homes Association.

He added that "enforcement alone" will not solve the problem and Ofsted needs to address registration delays and target directors of companies themselves.

"If fines are aimed only at limited companies, rather than the individual directors behind them, there is a real risk that poor operators will simply close one company and reopen under another name."