Councils have spent more than £350m on placing children in illegal accommodation over the past year, research has found.

According to a report by the Children’s Commissioner, roughly £353m had been spent by local authorities on illegal homes for children by September 2025.

The report confirms that the types of unlawful accommodation included caravans, holiday rentals, or AirBnBs, with the lack of ‘formal inspection or scrutiny’ of these settings meaning that children face a greater risk of harm.

Although the research reveals that 764 fewer children were living in illegal accommodation in September 2025 compared to the previous year, Dame Rachel de Souza emphasised the ‘wide failings’ of the system, given that some of the children had been included in last year’s data and were shown to still be living in illegal settings 12 months later.

‘It means that within that time, no one at the local authority responsible for their care had found a legal, safe solution for their care – either because none were available, or because no one had tried hard enough’, the report reads.

The research found that children had increasingly been placed in holiday camps and activity centres with minimal facilities compared to last year, with most placements being outside the child’s home local authority.

It also unveiled how ‘the needs of the children that local authorities are failing to adequately accommodate are high, and include significant levels of health needs, as well as many children judged to need high levels of restriction on their freedom’.

As part of its recommendations, the report calls for accelerated reforms to Regional Care Cooperatives (RCCs), with RCCs commissioning and matching children across the country to sufficient, high-quality legal placements, so councils are less reliant on unregistered, costly crisis placements.

The report also urges an increase in Department for Education capital funding for councils, enabling local authorities to expand in-house provision of children’s homes, including therapeutic secure homes and therapeutic settings for children with complex needs.

Furthermore, it calls for a ‘strengthened Ofsted oversight regime within the inspection of local authority children’s services’ to ensure councils are disincentivised from using unregistered accommodation.

More broadly, the report recommends the development of a joint children’s workforce strategy and commissioning strategy for children with complex needs, a plan for recruiting specialist foster carers, and ‘robust investment’ in early intervention measures and therapeutic support.