61st Report - Financial sustainability of children’s care homes
Select Committee
Public Accounts Committee
HC 1233
16 January 2026
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Sixty-first report from Session 2024-26 · published 1 Apr 2026
Recommendations & Conclusions
6 results
15
Conclusion
Not Addressed
Barriers and lack of incentives hinder the creation of children's homes matching children's needs.
Conclusion
Local authorities and private providers face barriers and lack incentives to open homes and create places matching children’s needs at the scale required.35 The Association of Directors of Children’s Services told us that the distribution of residential provision is based …
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Government Response Summary
The response simply restates the committee's conclusion from a different section.
HM Treasury
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16
Conclusion
Not Addressed
Staffing shortages and lack of qualified managers hinder residential children's homes operation and capacity.
Conclusion
Homes require qualified staff to operate, including a registered manager, with staffing a significant issue for residential care providers.39 The Children’s Homes Association told us that staffing costs make up 60-80% of operating costs.40 The Children’s Commissioner told us that …
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Government Response Summary
The response simply restates the committee's conclusion from a different section.
HM Treasury
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17
Conclusion
Not Addressed
Inconsistent capital funding and local authority competition impede creating children's homes where needed.
Conclusion
The Association of Directors of Children’s Services described inconsistencies in capital funding, and competition between local authorities for funding, as barriers to creating homes where they are needed. Where one local authority might be delighted to win several million pounds …
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Government Response Summary
The Committee noted that the Association of Directors of Children’s Services described inconsistencies in capital funding as barriers to creating homes where they are needed. The government's response discusses providers of children’s homes not offering the places needed locally, but doesn't specifically address the funding inconsistencies.
HM Treasury
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20
Conclusion
Not Addressed
Insufficient fees, home adaptation needs, and societal shifts create barriers to increasing foster care.
Conclusion
The Association for Directors of Children’s Services explained that there are barriers to increasing foster care numbers. This includes insufficient fees and allowances for foster carers, the need for foster carers to adapt their 47 Qq 26, 59 48 C&AG’s …
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Government Response Summary
The response simply restates the committee's conclusion.
HM Treasury
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21
Conclusion
Not Addressed
Department lacks systematic encouragement or direction for local authorities in supporting foster carers.
Conclusion
We asked the Department how it intended to overcome these barriers, and those of the cost of living, given these would not be addressed through the fostering hub. It told us that local authorities have a lot of discretion over …
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Government Response Summary
The response simply restates the committee's conclusion.
HM Treasury
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24
Conclusion
Not Addressed
Some private providers of children's social care achieve unacceptably high profit margins.
Conclusion
We raised concerns about the high levels of profits of some private providers.64 The Competition and Markets Authority found in 2022 that the fifteen largest providers of children’s social care had average profit rates of 22.6% for children’s homes, and …
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Government Response Summary
The Committee raised concerns about the high levels of profits of some private providers. The government's response notes that despite private providers providing most care home places, the Department does not fully understand their financial position.
HM Treasury
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