The number of registered children’s homes in England has risen to a record high, but providers are increasingly prioritising profit over care needs, Ofsted has warned.

The watchdog said new children’s homes were proliferating in areas of the country where housing was cheapest, suggesting the rise was driven mostly by profit and this was “bending the system out of shape”.

“This is an ongoing national scandal,” said Ofsted’s chief inspector, Sir Martyn Oliver. “The most vulnerable children in our society deserve loving and stable homes but the profit motive is increasingly dictating the location and ownership of children’s homes. As a society, we are failing these children.”

Ofsted’s annual report said 4,010 children’s homes were registered by the end of March this year, a rise of 15% (

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