Written evidence submitted by Ofsted (CCH0004)

Introduction

1. Ofsted (the Office for Standards in Education, Children’s Services and Skills) is a non-ministerial government department responsible for inspecting and regulating services that provide education, training, and care for children and young people in England. Our remit spans a wide range of institutions and services, including maintained schools, academies, independent schools, further education and skills providers, early years settings, and children’s social care services such as local authorities, fostering and adoption agencies, and children’s homes.
2. Our core purpose is to improve lives by raising standards in education and children’s social care. We do this by providing independent, evidence-led assessments that inform parents, carers, commissioners, and policymakers, and by promoting continuous improvement across the sectors we inspect and regulate. We report directly to Parliament and are committed to transparency, accountability, and putting children and learners first.

Purpose of Submission

3. We are submitting evidence to this committee to share insights from our inspections, regulatory work and research. Our evidence is grounded in direct engagement with providers and services across the country and reflects our strategic priorities, including promoting high standards, safeguarding children, and supporting system-wide improvement. We aim to contribute constructively to the committee’s inquiry by offering a perspective informed by our unique role and responsibilities within the education and social care landscape.

Written evidence submission

4. Trends in ownership and market structure
5. Ofsted publishes official statistics for children’s social care annually and we have recently published official statistics for children’s social care in England from 1 April 2024 to 31 March 2025.[1]
6. As at 31 March 2025, the majority of children’s homes in England are privately owned, with 84% (3,360 homes) falling into this category. Most new registrations this year have also been in the private sector, which reinforces this ongoing shift.
7. The market is increasingly consolidated. By 31 March 2024, 390 private companies owned multiple homes, an increase of 17% from 330 in 2023. Most of these companies (310) owned between 2 and 5 homes. The largest provider owned 200 homes. Chains are a significant feature of the sector: 2,300 homes (84% of private homes) were part of a chain with at least two homes. Of these, 970 homes (42%) were owned by the 22 largest companies. The top 10 companies alone accounted for 26% of all private homes, down from 30% in 2023. The largest provider alone accounted for 7% of all private homes.
8. Children’s homes are becoming smaller. Homes registered in the past year had a mean capacity of 3, compared to the overall average of 4.
9. There is a notable mismatch between the location of homes and the origin of children needing placements. The North West hosts 26% of all children’s homes (1,020 homes and 3,210 places), yet only 18% of looked-after children are from this region. In contrast, London has the fewest homes (250) and the South West has the fewest places (790). This misalignment is likely influenced by property prices and provider incentives, rather than local demand.
10. We still do not have the right homes in the right places offering the right care. The strongest provision is rooted in a detailed understanding between commissioners and providers to meet local need.
11. High staff turnover remains a significant issue in children’s homes, with nearly one in five homes operating without a registered manager as of March 2025.[2],[3] While this marks a slight improvement from the previous year, the absence of stable leadership continues to impact the quality and consistency of care. Homes without a registered manager are more likely to face regulatory concerns, as leadership instability can hinder compliance and effective safeguarding. We welcome the work DfE is doing with initiatives aimed at creating a more sustainable, skilled, and well-supported children's social care workforce.[4],[5]
12. Quality of provision
13. Quality remains consistent for private children’s homes. As of 31 March 2024, 83% of the 2,600 inspected private homes were rated good or outstanding, matching the overall sector average. However, 17% of children’s homes being rated less than good is not acceptable as they care for our most vulnerable children.
14. Our research in sufficiency (published in 2022), identified that local authorities often have little choice about where to place children and some are resorting to placements they do not want to use.[6] We also heard how the changing quality of homes has an impact on sufficiency for example, if a home is downgraded or closed, that affects places available. Department for Education (DfE) research by Lisa Holmes in 2021 noted there was a lack of assessment (and consideration) of quality when it comes to placement commissioning and expansion of in-house provision.[7]
15. Policy
16. We share the Committee’s concerns about financial instability and excessive profits in the care sector.
17. We welcome the commitments to children’s social care reform set out in the Children’s Wellbeing and Schools Bill and are working closely with the DfE to develop the right regulatory framework, and our own processes to deliver new regulatory powers when they come into force.
18. The reforms will bring in a number of significant changes to address the concerns being considered by this inquiry.
19. For the first time, Ofsted will be able fine unregistered providers and regulate provider groups. These are powers we have long called for.
20. We are also working with DfE on the proposed new financial oversight scheme and we are considering how the data we hold may be helpful in supporting the development of that.
21. The legal requirement for services providing supported accommodation to 16- and 17-year-old children in care and care leavers to register with Ofsted came into force in April 2023. Applications by providers have far exceeded all estimates and expectations and we are seeing a large number of new providers apply to enter this area of children’s social care services. Existing providers, who were previously operating outside regulation, have had to decide what to register their service as; a children’s home, supported accommodation, or something else. Some of these providers offer accommodation, care and support to children with very complex and often health needs.
22. We have been working jointly with the Care Quality Commission (CQC) to help providers understand which regulator they should be registered with. It is essential that providers understand their service in the context of regulation and are registered correctly, so they get the level of regulatory oversight they need.
23. Another step we have taken to better promote stability for children, especially for those with more complex needs, is to update our social care common inspection framework (SCCIF)[8]. We have made changes that provide a more supportive view of provider performance, particularly for those working with children with more complex needs.[9]
24. The DfE has set expectations that local authorities work with their safeguarding partners to establish new, expert-led multi-agency child protection teams (MACPTs) to support the local authority to discharge its duties under section 47 of the Children Act 1989 (duty to investigate). It is anticipated that this will become statutory in 2027. We are aware that local areas are developing their plans, but this work is at an early stage. Currently, we have not inspected any local authorities that have established these new teams.
25. Gaps in the system
26. We lack the regulatory powers to address the saturation of children’s homes in some areas and we are seeing an unprecedented number of new applications.[10] We are working with the DfE to explore how government policy and legislative change can be adapted to meet this challenge. Currently, we must consider every application against the requirements for registration as they are set out in law and the options available to us to prioritise applications are very limited. We do prioritise applications to register children’s homes that are needed urgently because local authorities need an emergency placement for a child.
27. We are disappointed that as part of the reforms we will not be given the power for joint inspection of Regional Care Cooperatives (RCCs). We are concerned that current proposals will leave gaps in oversight: we will be able to consider the support RCCs provide to the effectiveness of individual local authorities (through our ILACS framework), but not the overall quality of provision delivered by the RCC itself. Given that placement sufficiency continues to be such a challenge for the sector, a reduction in oversight represents a significant risk. Our concerns are informed by our national thematic inspection of Regional Adoption Agencies (RAAs), which found that regionalisation had not delivered the expected improvements and led to gaps in the oversight of adoption performance.[11] We have advised the DfE to consider the implications of this learning for RCCs and for the roll out of regionalisation to other services, such as through fostering hubs.
28. We published research in 2024 about children with complex needs in children’s homes, gaps in provision and examples of good practice.[12] A known gap in provision nationally is for services that better support children with the most complex needs, who need a more flexible approach to their care. We strongly support the DfE’s proposals for new community-based provision in this space, as often it is children with some of the most complex needs, including those who are deprived of their liberty, who are being cared for in unregistered settings with no regulation or oversight. In 2023, we published new guidance making it clear that settings offering children’s home services for children subject to deprivation of liberty orders should register with Ofsted in England or the Care Inspectorate Wales.[13],[14]
29. As we set out in a blog in 2024, unregistered children’s homes are also not a cheap option for local authorities.[15] We have found that they charge local authorities at least the same rates as registered homes, and often significantly more. This issue was raised in the House of Lords, where it was noted that local authorities are charged up to £20,000 a week for 1 child.[16] As well as strengthening our inspection frameworks to better support suitable registered homes to meet complex needs, we will work with DfE to develop the right type of regulatory oversight for this type of provision, with our shared ambition for right provision, right place.
30. We support the DfE’s work to develop local children’s homes, especially for children with complex emotional and mental health needs, through funding agreed by the Capital Improvement Board. We continue to assess applications made to register children’s homes funded by this initiative.
31. We welcome the Education Select Committee’s Fourth Report on Children’s Social Care and acknowledge its timely and critical examination of the care system in England. We are committed to working collaboratively with government, care providers and care-experienced individuals to make sure that all children receive safe, high-quality and compassionate care. This includes the development and implementation of national standards for care.