Ofsted started nearly 900 investigations into potential unregistered children's homes this year alone, annual report reveals

Published today (2 December), the Ofsted Annual Report 2024/25 found that despite a growing number of new children’s homes, a lack of homes in the right places for children who most need specialist support has created a “shadow market” of unregistered children’s homes.

The report said: “In the last year, there has been a 15% increase in registrations with Ofsted, meaning the total number of children’s homes in England now tops 4,000 – up more than 500 from the previous year and the highest number on record. However, this rapid growth masks very significant problems with the location, affordability and suitability of homes available.”

For example, the watchdog found more than a quarter of all children’s homes in England are located in the North West – a region that accounts for only 18% of looked-after children.

It warned: “The proliferation of children’s homes in areas where housing is cheaper suggests some operators are being motivated by profit, rather than the needs of children, which is bending the entire system out of shape.”

Looking at education, Ofsted described absence as an “endemic problem” across the school system, noting that severe absence – when children miss half or more of their schooling – is almost three times higher than before the pandemic.

According to the latest data, some 166,000 pupils were severely absent, with vulnerable and disadvantaged children over-represented among them.

In 2023/24, permanent exclusion rates were the highest on record, and suspensions were up by a fifth – approaching one million. Four out of 10 permanent exclusions and 5 out of 10 suspensions resulted from “persistent disruptive behaviour”, the report noted.

His Majesty’s Chief Inspector, Sir Martyn Oliver said: “Inclusion matters. It matters because addressing the needs of the most vulnerable and disadvantaged children demands a rigour and attention to detail that ultimately benefits all the children, pupils or learners in that setting – from those facing the greatest barriers, to those whose path to adulthood is more straightforward.

“As a country, we should measure our successes in education, children’s services and skills, both by how well we support the most economically disadvantaged and vulnerable, and by how much further we can push forward the boundaries of knowledge through higher learning. We have a duty to improve the lives and life chances of every child and every learner.”

A DfE spokesperson said: “We want to give the best possible start in life to every child and are determined for all children in care to be in loving homes.

“That’s why we are investing £2.4 billion in earlier intervention to keep families together, and committed to over £53 million to create new specialist placements in high-quality local authority-owned homes for the most vulnerable children.

“Our Children’s Wellbeing and Schools Bill is the most ambitious piece of child protection legislation in a generation and will include new powers to crack down on profiteering and take action against illegal, unregistered homes.”

Lottie Winson