Newton - Demand and capacity of homes for children in care

This report, commissioned by the County Councils Network (CCN) and produced with Newton and the London Innovation and Improvement Alliance, examines the rapid growth in demand for semi‑independent living accommodation for children in care and care leavers aged over 16 over the past few years.

It highlights how semi‑independent living has become the fastest‑growing placement type, often filling gaps caused by shortages in foster care, residential provision and affordable independent housing.

While acknowledging the potential benefits of semi‑independent living when used appropriately, the report warns that rising demand, new regulation and market pressures risk undermining outcomes for young people and financial sustainability for local authorities unless action is taken.

Key findings include:

• The number of children in care increased by 8% between 2019 and 2022, while those in semi‑independent living rose by 21.3%, with 1 in 5 children in local authority‑sourced accommodation now placed in this provision.
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• 63% of cases reviewed indicated semi‑independent living was not the best option for the young person’s needs.
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• New regulation, inflation and demand growth could add up to £368m per year to local authority costs by 2026/27, far exceeding planned funding.
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• Provider surveys suggest 19% of beds may exit the regulated market due to upcoming changes, risking localised shortages and disruption for young people.

Recommendations to government include:

• Conduct a new burdens assessment to fully account for the financial impact of regulation.  
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  Closely monitor provider registration and capacity to anticipate local shortages.
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• Improve local demand analysis across key cohorts to inform strategic planning.
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• Reduce reliance on semi‑independent living by expanding independent, family and foster care options, particularly for over‑18s.
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For councils:

• Strengthen joint working with housing and migration partners to prevent avoidable placements and manage costs sustainably.