Building In-House: What Local Authorities Owe Children When They Take Back Control of Residential Care

The announcement that seventy-seven local authorities were planning to open their own children's homes by the end of the 2026/27 financial year was covered, where it was covered at all, as a market story: councils reversing the decades-long retreat from direct provision, government capital funding providing the lever, a sector reckoning with what it costs to buy placements from a private market that has learned how much it can charge. None of that framing is wrong. The arithmetic is real: the average weekly placement cost in the independent sector has risen to levels that make in-house provision look, for the first time in a generation, not only politically attractive but financially viable. But the decision to build children's homes is not ultimately a procurement decision, even when it is dressed in procurement language. It is a decision about what kind of care a particular local authority intends to provide for the children it looks after, and the question of whether that care will be good is not settled by ownership. It is settled by everything that follows the planning application.

The legal underpinning is not new. Section 22G of the Children Act 1989 has required local authorities to take steps to secure, so far as reasonably practicable, sufficient accommodation for children in care within their local authority area where that is consistent with welfare. That duty has, for much of the last fifteen years, been honoured largely in the breach. The sufficiency strategy — required, and produced, by most councils — has routinely documented a gap between the local accommodation the authority is supposed to secure and the placements it is actually using, and has largely treated that gap as an external constraint beyond its control. The private market expanded to fill it, which is how England arrived at 85% private ownership of children's home places. What has changed is not the law but the political and financial context around it: the cost of out-of-area placements has become acute enough, and the visibility of its harms — children placed hundreds of miles from family, from school, from the few relationships that survive the care system — sufficient, that the gap between stated duty and actual provision can no longer be absorbed quietly into a strategy document.

What local, in-house residential provision can genuinely offer is not primarily a cost argument but a practice one. A young person placed within their own local authority area can, in principle, maintain contact with family members without a three-hour journey. They can continue at their current school, or attend a new one with access to the same virtual school head who knows their history. When their social worker visits, the social worker is not clocking significant travel time. When crisis support is needed from CAMHS or from a family support service, the referral is in-county. The accumulation of these proximities is not trivial. One of the most consistent findings in the research on placement stability is that children placed close to home are more likely to remain in placement, more likely to sustain education, and — where reunification is the plan — more likely to return to a family network that has not entirely lost coherence. Out-of-area placement, which has affected around one in five looked-after children nationally, is not experienced by young people as an administrative category. It is experienced as another uprooting, another reason to conclude that the adults nominally responsible for their welfare are not, in any lived sense, present.

The risk in the current moment is that the push to open in-house homes is treated as the goal rather than the precondition. Owning a building does not make a home. A local authority children's home that is rushed into registration without adequate staffing infrastructure, without a leadership team that brings residential expertise rather than local government management culture, without a coherent model of care, without the physical environment and daily rhythms that make residential care a place of genuine safety — is not better than the private placement it replaces. The homes that have produced the worst outcomes in the history of residential care have not been disproportionately private. They have been homes where the conditions for good care were absent: where staff were untrained, undertrained, or demoralised; where leadership was weak or absent; where young people were not seen as children to be cared for but as placements to be managed. Local authorities that are opening homes because the commissioning budget demands it, rather than because they have thought carefully about what it takes to deliver residential care of quality, are at genuine risk of replicating those conditions in new buildings. The £560 million in capital funding announced in the DfE implementation plan is a significant resource. Capital funding builds walls. It does not, by itself, build cultures.

For the young person who is the actual subject of all of this, the question is not whether the home is owned by a council or by a provider group. The question is whether the adults in the home know them, have time for them, are present enough and skilled enough to help them, and will still be there next month. A local authority home that achieves that — that recruits and retains staff who stay, that builds a model of care coherent enough to deliver it consistently, that understands its young people as people rather than placements — is capable of doing something genuinely valuable. The children who are placed close to home, cared for by staff who are part of the same community, maintaining connections that the care system has a long history of severing — these are not small things. But they require the local authority to take its responsibilities in this space as seriously as the best independent providers take theirs: not as a secondary commitment to good practice, something that can be sorted out once the planning permission is granted, but as the primary one. The case for in-house provision is real. Whether it translates into better lives for the young people placed in those homes depends on whether the organisations opening them have genuinely grasped what the case requires.