# Councils Spend Millions Funding Illegal Children's Homes Despite Official Ban

Councils across the UK continue paying up to £2 million per child annually to operate illegal children's homes, bypassing regulations meant to protect vulnerable youth. Despite a government ban on unregistered placements, local authorities funnel substantial public funds into facilities that circumvent safeguarding requirements.

The practice persists because councils face acute shortages of regulated placements for children in care. When legal options run out, authorities resort to paying private operators to run unlicensed homes, creating a two-tier system where cost trumps oversight. Children placed in these facilities lack the statutory protections that registered homes must provide, including regular inspections by Ofsted and mandatory staff training.

The financial scale reveals the desperation driving these decisions. At £2 million annually per child, councils spend vastly more on illegal placements than regulated alternatives. Yet the premium price buys less accountability. Unregistered homes operate without published safeguarding policies, independent monitoring, or the legal requirement to report serious incidents to authorities.

This arrangement particularly endangers children with complex needs. Those requiring specialist mental health support or managing trauma end up in facilities operating outside regulatory frameworks. Staff in illegal homes receive no mandatory training in trauma-informed care or de-escalation techniques, increasing risks of harm.

The BBC investigation uncovered what child welfare advocates have long warned: banning illegal placements without expanding regulated capacity simply drove the problem underground. Councils, constrained by budgets and facing legal pressure to house children immediately, found loopholes in the system. Private operators filled the gap, offering expensive unregistered placements that councils felt compelled to purchase.

Local authorities report they have no viable alternatives. Regulated children's homes operate near capacity nationwide. Building new facilities requires years of planning and significant investment. Councils choosing between housing a child in an illegal