Financial sustainability of children’s care homes
NAFP response to Public Accounts Committee report on the financial sustainability of children’s care homes, 16 January 2026
The Nationwide Association of Fostering Providers (NAFP) welcomes the Public Accounts Committee’s report, which rightly highlights the growing pressures within the children’s social care system and the urgent need for fundamental reform. In particular, the Committee’s findings on foster care reinforce the long-standing concerns raised by fostering services about the recruitment of and support for foster carers.
There are too many young people living in children’s homes, when living with a foster carer was the preferred option for them. The Committee is clear that government policy depends heavily on increasing the availability of local authority foster care to address this, yet it also finds that the number of fostering households has fallen by 9% in recent years. Exploring this, we note that independent fostering agencies (IFA) in England increased their foster carer numbers, whilst local authority fostering services shrank. IFAs now care for nearly 50% of children in foster care in England and support nearly 50% of foster carers.
We welcome the Committee’s recognition that barriers to growing foster care must go beyond recruitment campaigns. Issues such as the cost of living, clarity over fees and allowances, lack of space in family homes and the absence of consistent national incentives continue to drive carers away from fostering. Short term initiatives, including fostering recruitment hubs, will not succeed in turning the national cohort of carers around unless they are supported by a coherent national strategy that addresses structural challenges.
The Committee’s recommendation that the Department for Education sets out a clear, time-bound plan to tackle barriers to increasing foster care is both necessary and overdue. We welcome early messages from government that they are hearing this.
Fostering services already demonstrate what works, from council tax reductions to capital grants for home adaptations, and Ofsted judge 96% of IFAs to be good or outstanding. But services remain fragmented and standards inconsistently applied. Government must now provide leadership by embedding and scaling effective practice across the entire system.
The report also underlines the human and financial costs of failing to invest in foster care. Children who could thrive in stable family-based care are instead living in inappropriate, distant or unregistered settings because foster carers are unavailable. This is not only detrimental to children’s outcomes, but contributes directly to the growth in costs identified by the Committee. And all this against a backdrop of decreasing local authority funding over recent years.
As the representative body for IFAs who care for nearly 50% of children in foster care in England, NAFP stands ready to work with government, parliament and local authorities to deliver the change the Committee is calling for. A financially sustainable children’s social care system will only be possible if foster carers and both independent and local authority fostering services are valued, fairly funded and treated as cornerstones of care.
Harvey Gallagher, Chief Executive, NAFP said ‘All children deserve safe, stable and loving homes. Foster carers deserve a system that enables them to provide that care for children looked after. Foster care needs sustained investment in recruitment, retention and support for foster carers across all fostering services, both local authority and IFA. The Public Accounts Committee has set out a clear challenge to government. It must now act with urgency to ensure foster care can fulfil its vital role in supporting vulnerable children.’
