England’s children’s homes system is being ‘bent out of shape’ by profit-driven operators, with the country’s chief inspector warning society is failing its most vulnerable children.
His Majesty’s Chief Inspector Sir Martyn Oliver issued the stark warning as Ofsted’s annual report revealed a 15% surge in registered children’s homes over the past year, bringing the total to a record 4,000. However, this expansion masks serious problems with location, affordability and suitability.
The report highlights troubling geographical disparities, with over a quarter of all children’s homes situated in the North West—a region accounting for just 18% of looked-after children. According to Ofsted, this clustering in areas with cheaper housing suggests operators are prioritising profits over children’s needs.
‘The most vulnerable children in our society deserve loving and stable homes,’ Sir Martyn said. ‘Instead, profit motive is increasingly dictating the location and ownership of children’s homes. As a society, we are failing these children. We can and must do better.’
Despite the growing number of homes, councils continue struggling to place children with complex needs in registered facilities. This shortage has fuelled a shadow market of unregistered children’s homes, with Ofsted launching nearly 900 investigations this year alone.
The annual report also reveals persistent disparities affecting disadvantaged and vulnerable children across education. The gap between disadvantaged and other pupils remains large, with poorer children lagging months behind their peers. The problem begins early, with deprived areas lacking access to good quality early education and care.
Severe absence has emerged as an endemic crisis, running almost three times higher than pre-pandemic levels. Some 166,000 pupils are now severely absent—missing half or more of their schooling—with vulnerable and disadvantaged children disproportionately affected.
Poor behaviour is also driving concerns, partly attributed to social media and smartphones affecting attention spans and promoting disrespectful attitudes. Permanent exclusions reached record highs in 2023/24, while suspensions approached one million—up a fifth from the previous year. Disadvantaged pupils are five times more likely to face permanent exclusion.
The report acknowledges fantastic work by committed education and care professionals nationwide, but emphasises that children in care face far poorer outcomes than their peers due to inadequate coordinated support across education, care and wider services.
Under Ofsted’s renewed inspection framework, effective from November, inspectors will focus more closely on inclusion and how policies work for different groups – particularly those facing the greatest barriers to success.
In his annual report, Sir Martyn Oliver concludes: ‘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.
‘The dedicated staff working in education and children’s social care are helping children and older learners achieve their potential – day by day and week by week. I would like to thank them all.’
The full report can be read here.
Image: Vidar Nordli-Mathisen
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