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It is incumbent on everyone with an interest in social policy to pay attention to the most vulnerable children and young people. When those who have been neglected, abused or exploited fall through the cracks in the welfare state because local councils are unable to meet their needs, this reflects poorly on wider society and risks causing harm in the long term as well as immediately. In England, the social care systems for children and adults are well known to be under immense strain. The rise in the number of children placed in unregistered settings – and thus effectively invisible to Ofsted – is an alarming symptom of a wider failure.
From 144 children in 2020-21, the figure multiplied to 680 in 2024-25, according to a timely report from the policy consultancy Public First. The finding mirrors one from the children’s commissioner for England, Dame Rachel de Souza, who recorded 669 such placements in September last year. While these numbers make up less than 1% of the more than 83,000 looked-after children in England, the rapid rise in the number of cases where councils cannot find proper provision is both alarming in itself – since no child should be living outside the regulatory framework – and because of what it reveals about how the overall sector is managing.
Ministers are well aware of these interlinked problems. Children’s social care is an area in which there has been an unusual degree of policy continuity, since Josh MacAlister, who wrote a review under the Conservatives, is now the minister responsible for overseeing change. Laws governing the use of unregistered accommodation, which in some cases has included caravans and holiday lets, are in the process of being strengthened, while new regulations governing supported housing were supposed to create a safe, legal alternative to foster care and children’s homes – particularly for older teenagers.
But new rules do not resolve the question of what social workers should do with a child who neither foster carers nor regulated providers will accept. At the heart of the matter is a quandary: while councils have a legal obligation to place children, no organisation is obliged to accept them.
Practical steps proposed in the report, which is titled Hidden Children and was commissioned by a charity, Commonweal Housing, include rewriting rules that incentivise providers to reject young people viewed as high-risk. The authors are also hopeful about the prospects for new regional care cooperatives, which are meant to reshape the market in the public interest.
But while the excessive profits taken by some (but not all) children’s social care businesses have been rightly criticised – including by a Competitions and Markets Authority investigation in 2022 – there is no simple rule change that will put this dysfunction right. While profit caps ought to help ease the financial squeeze on councils, for whom emergency placements can be ruinously expensive, they will not solve the central dilemma of where these young people can go.
Ministers are already spending £88m on foster carer recruitment. Another possibility raised by this report is that the social housing sector could become more involved. MPs should find out whether partnerships with housing associations might lead to new, non-profit alternatives. The challenges faced by “hidden children”, and those responsible for them, need to be shared.
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