After reading the latest publications from Ofsted alongside commentary from the Children’s Homes Association, it’s clear there is a lot of tension between rapid growth in provision and the ongoing struggle to find suitable placements for the children who need the most support. This post shares a brief reflection on what those documents reveal, and how we might better understand the structural causes behind the current instability.
England’s care system for children and young people is in a (long) period of escalating instability, in which local authorities face unprecedented difficulty finding suitable placements, especially for children with high and complex needs. This persists despite significant growth in registered provision: the latest Ofsted annual report highlights a fifteen per cent increase in the number of children’s homes over the past year, bringing the sector to its largest size in history. Yet numerical expansion has not generated a corresponding improvement in sufficiency, nor meaningfully relieved pressure on local authorities.
The paradox, at first glance, is perplexing: more homes, yet increasing unmet demand. This reflects not provider indifference or lack of investment, but a system in which new provision evolves largely without coordinated national or regional sufficiency planning. Decisions about where homes are developed or acquired are shaped by a complex interplay of factors: the availability and suitability of properties, local commissioning relationships, regulatory considerations, access to a stable workforce, and financial risk. While some provision inevitably emerges in lower-cost housing markets, there are also many providers who have invested substantial capital in high-quality homes in areas where property values are higher, because they view high-quality living environments as essential to therapeutic work.
However, in the absence of consistent strategic oversight from government and clear commissioning direction, the pattern of provision can still become uneven. Some regions end up with clusters of generalist homes, while others struggle to secure specialist environments capable of supporting children with significant emotional, behavioural, neurodevelopmental or mental health-related needs. In these contexts, it is not surprising that young people with complex needs experience rejection, instability and displacement, not because providers are unwilling to care, but because they are operating within models that are financially and operationally fragile, and subject to regulatory pressures that make risk-tolerance extremely difficult.
For those young people, the result is a pattern of instability that compounds trauma. Too often, placements are disrupted because services are not resourced to deliver the intensity of support required, rather than because staff or organisations lack commitment or compassion. The evidence base increasingly shows that these disruptions reflect systemic conditions: financial models based on occupancy rather than support intensity; workforce shortages that make one-to-one and two-to-one support difficult to sustain; and inspection frameworks that can inadvertently penalise providers for accepting and persevering with young people whose lives are complex and unpredictable.
Where suitable regulated placements cannot be found, local authorities are left with few alternatives. They often resort to emergency, unregulated or temporary arrangements which, although sometimes the only viable option in the moment, can be unsafe, isolating and financially punitive. Rather than a temporary stopgap, these arrangements have become a structural feature of the system, absorbing children who are already marginalised into situations that compound risk and developmental harm. It is not unreasonable to describe this as a market failure; it is also, fundamentally, a failure of public policy and governance.
The critique articulated by the Children’s Homes Association (CHA) challenges the dominant narrative around this failure. While Ofsted has drawn attention to profiteering, market distortion and the proliferation of inexperienced providers, CHA argues that the tone of regulatory commentary risks obscuring deeper structural drivers and unintentionally undermining the work of those providers who are genuinely striving to offer stable, high-quality, therapeutic care in a challenging environment. Long registration delays, inconsistent regulatory interpretation, and lack of targeted investment in specialist provision have all contributed to the conditions in which high-cost, low-value emergency placements flourish.
Commercialisation in children’s social care is neither new nor uniform in character. Many of the private organisations now operating in the sector emerged precisely because local authorities lacked the capital, flexibility and speed to build provision themselves. In many cases, private providers have absorbed substantial financial risk and invested heavily in high-quality environments, workforce development and therapeutic models. But in the absence of a coherent, planned approach to sufficiency, these organisations have also been left to navigate fragmented commissioning arrangements, forecast unpredictable demand, and make decisions within a regulatory framework that can sometimes feel contradictory, risk-averse and misaligned with therapeutic ambition.
The result is a distorted ecosystem that is neither fully market-driven nor genuinely planned. It is reactive. It is transactional. And it is, above all, crisis-oriented. Children enter placements in states of distress and uncertainty, only to find that the systems surrounding them are equally unstable. Staff turnover, commissioning disputes, inspection pressures, financial constraints and the absence of long-term planning all contribute to an environment characterised by churn. The most vulnerable young people, those who require the highest degree of relational persistence, containment and therapeutic consistency, experience the greatest instability.
Reform, in this context, cannot focus exclusively on improving the behaviour of individual providers or tightening compliance frameworks. That may address symptoms, but it does not resolve causes. A meaningful shift requires a re-orientation from reactive risk-management to proactive system design. England needs a national and regional planning approach that situates provision in those areas where children need it, rather than allowing capacity to evolve solely in response to market incentives. It needs investment mechanisms that recognise the inherent cost of working with children with complex needs, and accept that small, high-support homes simply cannot be made viable without capital support. It needs a regulatory architecture that enables and incentivises providers to persevere with difficult placements, rather than quietly shaping admissions around inspection risk to ensure organisational survival.
Most critically, the system needs to reassert a core principle: that residential and supported accommodation are not merely custodial arrangements, but therapeutic environments in which children can rebuild capacities eroded by trauma, adversity and relational disruption. The workforce that delivers this support requires more than compliance training; it requires structured development, clinical supervision, emotional containment and professional recognition. This is a skilled profession, not custodial labour. Failure to resource and value it as such guarantees instability.
Stability, in fact, may be the single most important outcome to prioritise. Without it, education, health, identity, relationships and self-regulation are unlikely to take root. And yet, the current system treats stability as a by-product of placement matching, not as a structural design goal. Children move because systems are unstable. Systems are unstable because they are under-designed, under-resourced and under-planned. These dynamics reinforce one another, producing outcomes that are both predictable and avoidable.
There is, however, room for optimism. The emergence of regulated supported accommodation for older adolescents reflects an important recognition that developmental needs do not end at sixteen, and that independence cannot be cultivated in environments characterised by neglect or minimal support. The growth of therapeutic models across residential care, while uneven, signals a broader cultural shift in how we conceptualise the purpose of provision. Many local authorities are seeking to commission differently, and many providers are eager to innovate and collaborate. What is missing is a coherent framework that connects these aspirations to strategy, capacity and investment.
If England is to build such a framework, it must begin by recognising that scarcity, fragmentation and crisis are not inevitable outcomes of caring for traumatised young people, but the product of policy choices. A system that relies on emergency placements is one that has failed to plan. A system in which provision is distributed according to property value rather than child need is one that has failed to govern. And a system that repeatedly expects traumatised children to adapt to instability, rather than building environments capable of containing it, is one that has lost sight of its purpose.
There is no cheap or immediate solution. But there is a clear direction: coordinated sufficiency planning; targeted investment in specialist, high-support provision; professionalisation and resourcing of the workforce; regulatory alignment with therapeutic ambition; and commissioning models that reward stability and outcomes rather than throughput and cost suppression. These are not ideological aspirations; they are pragmatic conditions for moving the system beyond perpetual crisis management.
Children do not need more placements. They need homes that are designed for who they are, where they are, and what they have lived through. Until infrastructure, governance and commissioning reflect that basic truth, the contradictions of the current system will continue, and the consequences will be borne not by regulators or providers, but by children whose futures depend on our willingness to imagine and resource something better.
Miguel Valerio 