Association says Ofsted plan to downgrade councils’ for using illegal provision would hold authorities to ‘unattainable standard’ and risk placements being made contrary to children’s best interests
More children would be placed far from home, with others facing longer stays in hospitals or police cells, if Ofsted implements a plan to penalise councils for using children’s homes.
That was the warning from the Association of Directors of Children’s Services (ADCS) in a stringing response to the inspectorate’s consultation on reforming social care inspections, which closed recently.
The ADCS said that Ofsted’s plan to downgrade councils on their leadership performance for using unregistered homes – which are illegal to run – would force directors to make “punitive” choices between children’s best interests and their professional reputations.
The association argued that using unregistered homes was “almost always a last resort” for councils, reflecting a lack of suitable local placements for children in care as a result of the “brokenness” of the market.
However, in response, Ofsted defended its plans, saying it was “shining a light” on the illegal use of unregistered homes for vulnerable children, a practice it said needed to end.
Ofsted’s plans to penalise councils for unregistered home use
Currently, under the inspecting local authority children’s services (ILACS) framework, Ofsted examines councils’ use of unregistered homes under both its judgment on the experiences of children in care and that on the impact of leaders.
In its assessments, the inspectorate takes into account how often councils use unregistered homes, how long children spend in these setting and the extent to which authorities are actively mitigating the risks of unlawful placements.
Under its proposals to reform ILACS, it is proposing that use of unregistered homes be considered entirely under the leadership judgment, on the grounds that it was fundamentally related to authorities’ performance of their duty to take steps to secure sufficient accommodation for looked-after children.
It also proposed that any that any council that made use of unregistered provision would automatically receive either a ‘needs attention’ or ‘urgent improvement’ grade – the bottom two categories under its planned new five-grade rating scale – for leadership.
The choice of grade would depend on whether use of unregistered provision was frequent or exceptional, and whether leaders had taken effective action to end it and increase the number of legal placements available to meet their sufficiency duty, it said.
Councils ‘not meeting expected standards if they breach duties’
In launching the consultative plans, in July, Ofsted said: “Commissioning a place in an illegal unregistered setting is a breach of the local authority’s legal duties under the Care Planning, Placement and Case Review (England) Regulations 2010.
“A local authority that is not meeting its statutory duties cannot reasonably be deemed to have met the standards expected of it.”
The measure accompanies government action to tackle the use of unregistered placements, which increased sevenfold from 2020-21 (147) to 2023-24 (982), according to 2024 Ofsted data, with the regulator finding many such homes were of “poor quality”.
Under the Children’s Wellbeing and Schools Act 2026, Ofsted has been given new powers to fine breaches of the Care Standards Act 2000, to provide a faster alternative to prosecution, particularly for providers of unregistered homes.
Proposals risk holding councils to ‘unattainable standard’
In its response to the consultation, the ADCS said no director “actively condones the use of unregistered placements”.
But it added: “Adequate sufficiency can only be achieved once [local authorities] have sufficient resource to create a surplus of availability to draw on when needed. Regrettably, that is not how the system works at present, and this change to the framework would, in effect, be holding [local authorities] to an unattainable standard.”
The number of registered children’s homes has doubled over the past six years, while there has also been rapid growth in the number of providers of supported accommodation, the semi-independent living option for 16- and 17-year-old children in are and care leavers.
However, ADCS said that, due to the “brokenness” of the placement market, there was a mismatch between where provision was established and where it was needed, with providers choosing the most commercially viable or cheapest to develop services.
Children ‘risk being sent to opposite end of the country’
While using unregistered provision was “almost always a last resort”, councils “increasingly find themselves having exhausted every registered option, with nowhere suitable left for the child to go”, said the association.
It added that while it was generally in children’s best interests to stay closer to home, Ofsted’s proposal would “likely lead to children being sent to the opposite end of the country, or kept in hospital or police stations for longer periods of time, so that [local authorities] remain within the bounds of what’s permitted.”
In downgrading leaders for their use of unregistered homes, Ofsted was presenting directors with a “punitive” choice between a placement that may well meet their needs and their inspection grade and “professional reputation”, said the ADCS.
It even suggested that the proposal may exacerbate councils’ existing challenges in recruiting and retaining directors of children’s services.
The association said its members believed Ofsted’s current approach to assessing unregistered home use “strikes the right balance between holding LAs to account, while acknowledging what is outside of their control”.
Ofsted ‘makes no apology for shining light on illegal home use’
In response, an Ofsted spokesperson said: “Unregistered children’s homes are illegal and use of them for caring for our most vulnerable children must end. We make no apologies for continuing to shine a light on this important issue.”
“We will be considering all the contributions to our consultation from children, families and professionals and will be publishing our response in the spring. In the meantime, we must all continue to play our part in eradicating the use of illegal homes.”
Source: Community Care
