A children’s care company and its two directors have been fined after admitting to operating unregistered children’s homes in Kent, in what Ofsted says is the first successful prosecution
of its kind.
Catalyst Care Limited and directors Davidson Lynch-Shyllon and Miriam Ekathor pleaded guilty to all charges at Croydon Magistrates’ Court in March.
The company and its directors were fined a combined £92,400 on 4 August for operating three unregistered homes between October 2022 and April 2025. The homes accommodated nine children during that period.
They were also ordered to pay £2,960 in victim surcharges and £17,250 in costs.
Ofsted said the directors had received repeated warnings that they were operating illegally but continued to run the homes without the required registration.
During the period in question, the homes received more than £1.7m in payments from local authorities for placing children there.
The two directors have also been disqualified from operating, managing or holding a financial interest in a children’s home.
Under English law, all children’s homes must be registered with Ofsted. Operating or managing a home without registration is a criminal offence.
Ofsted said unregistered homes operate without the independent regulatory oversight applied to registered providers. This can leave vulnerable children without assurances over staff checks, living conditions or the quality and safety of their care.
The regulator said children placed in unregistered homes can include those with particularly complex needs.
Ofsted said it had issued hundreds of warnings over the use of unregistered accommodation, which has increased partly because of a shortage of registered homes in suitable locations and a lack of staff with the expertise needed to support children with complex needs.
The regulator also warned that some unregistered providers charge local authorities high fees, placing additional pressure on already stretched children's services.
The prosecution follows new powers granted to Ofsted under the Children’s Wellbeing and Schools Act. These include the ability to impose financial penalties on illegal children’s homes.
Ofsted said increased funding would allow it to expand its specialist Unregistered Social Care team, which investigates providers operating without registration and can pursue enforcement action, including criminal prosecutions.
The regulator is also consulting on changes to the way it inspects local authorities’ children’s services. Under the proposed framework, the use of illegal children’s homes could become a factor in determining whether a council meets the expected standard for leadership and the impact of its decisions.
Ofsted said the Catalyst Care case represented an important step in tackling illegal provision and protecting children who depend on the care system.
His Majesty’s Chief Inspector, Sir Martyn Oliver said:
“It is heartbreaking that so many vulnerable children are placed in unregistered children’s homes where we have no assurance that they are safe or receiving the care they need and deserve.
This outcome marks an important milestone in our efforts to tackle illegal children’s homes and sends a clear message that operating outside the law will have consequences. We are determined to make increased use of prosecutions to tackle the offenders running these settings. We are currently consulting on proposals to downgrade local authorities who commission these illegal homes”.
Children and Families Minister, Josh MacAlister, said:
“This prosecution is a welcome start to our wider crackdown on illegal children’s homes, and we have given Ofsted new powers to issue fines under the Children’s Wellbeing and Schools Act.
Vulnerable children deserve to be safe and properly cared for, and I want to see more action of this kind. This case should send a clear signal to anyone running an illegal children’s home: the law will catch up with you and you will face consequences”.
