The number of places in council-run children’s homes in England has decreased by a third since 2012, while places in privately-run homes have significantly increased.

According to the Observer's analysis of government data, council-run home places fell from 3,250 in 2012 to 2,087 in 2023.

Over the same period, private home placements grew by 63%, resulting in 9,717 children now housed in privately-run or charity-operated children’s homes, with the majority managed by private firms.

This shift has contributed to children being placed far from their families, especially as private homes tend to cluster in more affordable regions.

Austerity measures post-2010 further drove councils to rely on the private sector.

Experts like Katharine Sacks-Jones from the charity Become stress the need for a national strategy to increase residential and foster homes and consider the impact of profiteering in children’s social care.

The Competitions and Markets Authority noted that large private providers are making higher profits but claimed that private provision isn’t more costly than council-run homes.

The Local Government Association and Children’s Homes Association emphasize the sector’s challenges with rising costs, due to inflation and children’s increasingly complex needs, calling for government support to balance the market and prioritize children’s welfare.