Ofsd has promised to punish councils for using illegal children’s homes.

Local authorities who place children in care in unregistered homes could face downgrades in performance inspections, Ofsted’s chief inspector has said.

Councils can be rated as requiring ‘urgent improvement’ and their children’s services departments can be fined based on the regulator’s recommendations.

Sir Martin Oliver told the BBC’s Today program that it was a scandal for companies to run illegal classifieds themselves and they would face fines.

Local authorities could be fined for regulatory changes under new plans, he added.

Ofsted has not been able to successfully prosecute a service provider because their use first came to light a decade ago.

In the year In 2021, the government banned the use of non-Ofsted registered children’s homes following a series of BBC investigations.

We discovered that a girl was trafficked directly from her home and sexually assaulted, while a boy was kidnapped from another home and taken to sell drugs.

Children under the age of ten in care were also routinely moved between caravans and narrowboats.

During the ban, local authorities complained that they were forced to use registered children’s homes due to lack of placements.

But with the supply of children’s homes doubling in the past eight years – as private equity and property investors enter the market – illegal placements are expected to stop.

Despite this, the practice is growing only because the price of these placements is also increasing significantly.

In May, the BBC reported that three local authorities in England spent more than £2 million each on a child in an illegal children’s home last year.

Hackers continue to tell the BBC about the dire conditions in the homes. He said he found a child tied up in the room.

Ofsted has faced criticism for not successfully prosecuting any providers during this period and for inordinate delays in applications to register children’s homes, which currently take up to 18 months.

Suppliers have told the BBC they feel they will be forced to open without registration or face bankruptcy due to reduced costs of hiring premises and hiring key staff.

Now Sir Martin has pledged to help end the use of illegal orphanages.

“It’s simply unacceptable, it’s a scandal, it has to end, and we’re going to do our part,” he said.

Ofsted’s chief inspector has increased the size of the team investigating the use of illegal classifications and three prosecutions are underway, one of which is awaiting trial.

“I’m saying it’s not good if you’re using a children’s home that’s not registered with us, and if that’s the case, we’ll downgrade you,” he said.

But Ofsted has faced criticism in the past for not acting sooner.

Dr Mark Kerr, chief executive of the Children’s Homes Association, said: “Ofsted has always had the power to take action against illegal children’s homes, but the new powers should make enforcement quicker and more effective.

He added that “enforcement alone” would not solve the problem and Ofsted should target late registration and company directors.

“If fines are targeted at specific companies rather than the individual directors behind them, there is a real risk that poor operators could simply close down one company and reopen under another name.”