In its 2025-26 annual report, Ofsted said it remains "deeply concerned" that significant numbers of children in care, including those with the most complex needs, are being placed in unregistered homes with no regulatory oversight. In the same period it carried out five criminal investigations into illegal provision, leading to prosecutions in two cases.
The Children's Wellbeing and Schools Act 2026 changes the arithmetic. Ofsted gains the power to fine those operating unregistered children's homes, closing what its Chief Inspector has called a long-standing gap in the enforcement toolkit, and a larger investigation team is being established to use it.
Every registered provider should welcome this without reservation. Registration is not paperwork; it is the mechanism by which the Quality Standards, safe recruitment, independent Regulation 44 scrutiny, and inspection itself attach to a child's daily life. A child in an unregistered setting has none of that protection. And the children placed there are, almost by definition, those whose needs were hardest to meet elsewhere. The most vulnerable children in the system are the ones with the least oversight. That should be intolerable to everyone in it.
But enforcement addresses the symptom. The honest conversation is about the cause. Local authorities do not place children in unregistered settings out of indifference. They do it at 4pm on a Friday when a placement has broken down, every registered provider within a sensible radius has said no, and the child needs to sleep somewhere. Unregistered provision is what a sufficiency failure looks like at the level of one child on one night.
Which means fines alone will not end it. If the supply of registered provision for complex needs does not grow (in the right places, with the right staffing models), enforcement pressure will simply squeeze the same children into different inadequate arrangements.
There is a constructive role for providers here, and it goes beyond compliance. It means being willing to take referrals at the difficult end of the spectrum, investing in the staffing and clinical support that makes those placements safe, and being honest with commissioners about what genuinely lies beyond a home's capability rather than defaulting to no.
The question we would put to the sector: as enforcement tightens, who is planning the registered capacity that the children currently in unregistered settings will need? And how quickly can it be brought on line?
