The government has announced a sweeping reform of the children’s social care system, aiming to end years of neglect, shift the focus to early intervention, and keep families together

wherever possible. This overhaul is designed to ensure vulnerable children have the opportunity to thrive while addressing the escalating costs and challenges faced by local authorities.

The reforms, outlined in Parliament, aim to improve outcomes for children by empowering social workers and other professionals to tackle poor-quality care provided at excessive costs. The changes seek to replace reactive late-stage interventions with proactive, family-focused support.

Over the last decade, spending on looked-after children has more than doubled, rising from £3.1 billion in 2009/10 to £7 billion in 2022/23. Social workers, often overwhelmed by heavy caseloads, have struggled to provide the early support needed to prevent crises from escalating.

Bridget Phillipson, Education Secretary, said:  “Our care system has suffered from years of drift and neglect. It’s bankrupting councils, letting families down, and above all, leaving too many children feeling forgotten, powerless and invisible.

We want to break down the barriers to opportunity and end the cycle of crisis through ambitious reforms to give vulnerable children the best life chances – because none of us thrive until all of us do.

We will crack down on care providers making excessive profit, tackle unregistered and unsafe provision and ensure earlier intervention to keep families together and help children to thrive”.

A key focus of the reforms is addressing issues with private care providers. Some companies have been criticized for prioritizing profits over care, with unregistered homes failing to meet basic standards. Research by the Local Government Association revealed that over 1,500 placements cost councils over £500,000 annually per child, while the largest 15 providers report an average profit margin of 23%.

To counter this, new measures will require major providers to share financial information with the government, allowing for greater oversight. This transparency will prevent sudden closures that could leave children without a home. The government has also promised to introduce a cap on profits if providers fail to curb profiteering voluntarily.

To ensure care quality and safety, Ofsted will be granted new powers to issue civil fines, enabling quicker action against unscrupulous providers compared to existing criminal processes.

The reforms also include measures to:

Empower Ofsted to investigate multiple homes run by a single company, addressing issues highlighted by abuse uncovered at Hesley Group homes.

Introduce a “backstop” law to limit profits if voluntary reforms are insufficient.

Encourage not-for-profit and socially invested providers to establish homes, diversifying the market.

The government aims to shift focus toward early intervention by giving families a legal right to be involved in decisions about children entering the care system. Additional funding for preventive services is expected to be announced in the upcoming Local Government Finance Settlement.

Cllr Arooj Shah, Chair of the Local Government Association’s Children and Young People Board, said:

“It is positive to see the Government building on recent progress following the Independent Review of Children’s Social Care, and pursuing an approach rooted in what we know works for children and their families.

We are particularly pleased to see an ongoing focus on early help and family networks, and a strong commitment to tackling profiteering and other problems in the market for children’s social care placements. 

Moving forward, progress will be limited by the significant funding and workforce challenges within children’s social care, councils and amongst partners more widely.

It is vital that the Government uses the forthcoming Spending Review to ensure that all those working to keep children safe and to help them thrive have the resources they need to do that well”.

Children’s Commissioner Dame Rachel de Souza said: “Every child deserves to grow up safe, happy, healthy and engaged in their communities and in their education. With this Bill we have an opportunity to repair how we treat childhood in this country.

Children are paying the price of a broken social care system that allows profits over protection. They are enduring things no child should ever have to: living in isolation in illegal children’s homes, often at enormous cost, deprived of their liberty without due process, often surrounded by security guards instead of receiving love and care.

Children in the social care system today are living week to week in limbo. They need action without delay, not plans or strategies, so I welcome the urgency with which this government is setting out plans to tackle some of the most entrenched challenges. There must be no limits on our ambition for these children and I will look forward to working closely with ministers to push for radical reform”.

Sir Martyn Oliver, Ofsted’s Chief Inspector said:

“These new powers will allow Ofsted to do more to make sure all children’s homes are safe and nurturing places, and to combat illegal and poor-quality homes quickly and effectively. We welcome these reforms and stand ready to deliver the Government’s new asks as soon as possible”.

Sarah Cardell, CEO of the CMA, said:

“We are pleased to see the government taking this next step towards reforming the children’s social care market, in line with our recommendations. Our market study found multiple concerns – including a shortage of appropriate places – which need to be tackled to ensure vulnerable children and young people are getting the homes they need. We will continue to work with the government to make sure the plan delivers longstanding improvements”.

Key initiatives include:

Child Safeguarding Teams: Every council will be required to establish multi-agency teams involving schools and teachers to prevent children from “falling through the cracks.”

Staying Close Programme: Local authorities must offer support for care leavers, including housing and emotional assistance, up to age 21, ending the abrupt withdrawal of support at 18.

Consistent Child Identifier: A new system will enable professionals to share critical information, ensuring early intervention.

New Measures on Home Education

Parents of children involved in child protection investigations will need local authority consent to home-educate their child, ensuring that their educational and safeguarding needs are met.

Next Steps

The government will collaborate closely with local authorities and the children’s care sector to implement these reforms. The goal is to create a more sustainable system that supports children, families, and social workers, delivering better outcomes for all. Photo by Richard Townshend.