New children’s care homes are being disproportionately placed in cheaper and more deprived parts of England, according to an Observer investigation. .
Over the past five years the number of children’s care homes located in areas with the cheapest house sale prices has risen almost three times faster than in the most expensive places. Among the regions with big increases in homes was the north-west, including in parts of Blackpool and Burnley and other northern cities such as Bradford. Children’s services directors warned that the trends were driven by the “blatant profiteering” of private care providers, targeting cheap housing and local labour.
The findings suggest private companies are locating homes where it is cheapest for them to do so, rather than where they are needed. The practice helps them increase profits. However, it also means vulnerable children can end up being moved hundreds of miles for a care place, splitting them from family and support networks that they rely on. It comes after the Observer revealed that some children were being moved to care homes more than 300 miles away from their neighbourhoods.
Almost one in five of the care homes opened in the past decade was located in areas with the cheapest house sale prices, as opposed to one in every 17 in the most expensive areas. In response to the findings, Tory MPs representing some of the areas said the care system was “failing miserably” and stated they would be seeking answers from ministers. Josh MacAlister, the author of an independent review of children’s care, said it was “the latest evidence to show that the children’s social care market is broken”.
The findings raised concerns with local MPs and children’s services directors, who said provision should not be driven by profit. A review by the Competition and Markets Authority last year found that the average operating profit per child in England was £45,000, with profit margins averaging 22.6%.
“The only thing that should guide where children in care are placed is where they can best be supported,” said Antony Higginbotham, the Tory MP for Burnley. “In the vast majority of cases, except where there is a safeguarding need, that’s in the place where they have access to friends, family and a support network. It’s clear from these numbers, though, that property prices are taking priority over what is best for those vulnerable children. It’s not acceptable and I’ll be raising it with government.”
Paul Maynard and Scott Benton, the two Tory MPs for Blackpool, also raised concerns. Maynard said that planning law changes were helping to tackle the problem, which was becoming less acute in the town, but said the care market was “dysfunctional”.
“It would be cheaper to send these children to our local public school as boarders than it is to accommodate them in some of these properties,” he said. Benton said: “From the exchequer’s point of view, from a public policy point of view, and more importantly from a child’s point of view, this policy fails miserably. From a child’s point of view, it can be catastrophic and it clearly isn’t in the children’s best interests.”
MacAlister, whose review recommended a five-year, £2.6bn plan to tackle the children’s social care crisis, said the “clock is ticking” for action. “Where children in care live should not be influenced by house prices, but by a focus on keeping them close to their friends, family networks and school, in homes that provide them with stable loving relationships,” he added.
Clare Bracey, policy director at the Become charity that helps those in care and care leavers, said the housing market was having far too big an influence on the children’s care system. “We should expect children to be living in safe nurturing communities,” she said. “Where children are being moved to places far away and to a more deprived area, that’s not in the best interests of children, either. We have a huge number of children being placed far away from the people that matter to them - from their schools, their communities.”
John Pearce, the president of the Association of Directors of Children’s Services, said that the placement of homes in poorer, cheaper areas was part of the “blatant profiteering” in the sector and called for a plan to move away from the profit motive in care.
Louise Gittins, chair of the Local Government Association’s children and young people board, said there had been complaints for years of “many children’s homes being concentrated in areas where property is cheaper”.
“Many councils are now developing their own children’s homes to tackle this problem,” she said. “However, in a context of significant pressure on council finances, this is a challenge.” The Observer matched registered care homes against the level of deprivation and house selling prices in the parliamentary constituencies they are located in. The number of homes increased by 61% in areas with the lowest housing prices between March 2017 and August 2022. That compares with the 22% increase in five years in the areas where houses were sold at the most expensive price.
There also appears to be a disproportionate number of homes in the north-west compared with more expensive regions. In 2022, the north-west had a quarter of all the care homes in England. The region is home to just 13% of England’s under-16 population.
The number of care places available in children’s care homes increased by 31% between 2017 and 2022 in areas with the cheapest house sale prices compared with a decrease of 3% in the most expensive parts of England.
Analysis of official figures published by Ofsted also shows that places have increased four times faster in the most deprived areas of England: between 2017 and 2022, places went up by 31% in the most deprived areas compared with a 7% rise in the least deprived.
Some of the most deprived constituencies with the cheapest housing had some of the biggest increases in children’s homes. Blackpool South has seen the number of care homes increase from 7 to 26 over the period. The number in Burnley has increased from four to 13. There was an increase from one to 10 homes in Wolverhampton North East and three to 10 in Wolverhampton South East. Homes in Bradford South increased from two to 10 and in Bradford West, from one to four.
A Department for Education spokesperson said: “Every child deserves to live in a safe and stable home. Local authorities have a responsibility to place children in an environment that is in their best interests. As part of children’s social care reforms, we are investing £259m to create more placements for children in high-quality and safe homes.
“We are also working with Ofsted and the children’s homes sector to develop a robust financial oversight regime to make sure we have greater transparency of ownership, debt structures and profit-making, preventing sudden market exit, and making sure that children receive the care that they need.”
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‘There was no warning or anything. I cried all the way. No other kids were there’
Jade Barnett was just 16 when she returned from school to her foster home to be told she would be moving to Blackpool. After entering the care system at 15 in the south, she had already relocated to Birmingham. Unsurprisingly, the sudden news that she would be moving to a new town, completely unknown to her, was hard to process.
“At first, I tried to run because I didn’t want to go to Blackpool,” she said. “I tried to get some of my stuff, but everything was gone from my room already. I literally had no way to do anything. I had nothing. I felt angry. There was no warning or anything. They were literally waiting for me to get home so I could go.”
She was put in a black cab and sent to her new home that evening. “I cried all the way,” she said. “By then it was pretty late. No other kids were up when I got there. There were two staff members who showed me to my room. You could literally see the seaside, it was right on my doorstep. I think that’s probably when I realised I was in a completely new place.”
Jade’s experience reflects the revelations from the Observer’s investigation, which found children’s care homes have been disproportionately located in poorer, cheaper areas over the past five years as companies behind them target cheap housing and labour.
It means vulnerable children are being forced to relocate to available housing, rather than homes being located where there is the most need.
Parts of Blackpool are some of the cheapest and most deprived in England. At one point, most of the children in Jade’s Blackpool home were from London. She said she did not go out much and felt alienated in the area. When she did, one stranger asked to touch her hair when it was in an afro style. “You’d walk down the road and there would not be a lot of people that looked like you,” she said. “It was weird, because I had to be put in situations sometimes that I’d never been in before. That made me feel uncomfortable.”
Jim Hobson, Blackpool council’s cabinet member for children’s services, said the town was tackling the boom in children’s homes by changing planning rules, but criticised providers targeting the area for profit. “Many are opening their homes in places like Blackpool for profit motives and not for the best interests of the children in their care,” he said. “The reason for this is that the property prices in such places are low due to these areas suffering with higher than average levels of deprivation and all of the knock-on problems associated with that.
“The significant growth in private children’s homes, especially those run for profit, is concerning and a distraction from work that we should see – which is more foster homes and greater support, including policy support and funding from national government to help struggling families stay together.”
Jade, now 22, has been able to channel what she has been through and now tries to help other young people facing hardship, working with the Prince’s Trust on youth development and with the mayor of London on reducing youth violence. “I’ve used my pain as purpose, you could say,” she says.
• This article was amended on 10 July 2023 to add an additional quote from Clare Bracey, policy director at the Become charity.
