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Market Position Statement September 2026: Children's Homes

Introduction

This Market Position Statement (MPS) sets out Lancashire County Council’s Children's Services current position, needs, pressures and commissioning intentions in relation to children’s homes. It provides a clear message to existing and prospective providers about the position of Lancashire County Council's Children's Services.

Lancashire continues to experience significant market imbalance, driven by very high levels of agency provision operating within the county, which in most cases is not caring for children in the care of Lancashire County Council. This MPS aims to promote a stable, high-quality and sustainable market that meets local need and reduces avoidable pressure on public services.

The market in Lancashire

  • Lancashire County Council has the largest number of children's homes within its local authority area than any other local authority in England. 9% of all children's homes in England are in Lancashire County Council's boundaries, with most (96%) operated by agency providers.

  • There is five times as much agency children's home provision than is required to meet local need within Lancashire County Council's boundaries. According to Ofsted's register of children's homes (published on 10th August 2026), there were 407 Ofsted registered children's homes run by agency providers in Lancashire County Council's boundaries, able to care for 1,133 children. As of 31 July 2026, 219 children in the care of Lancashire County Council were living in an agency Ofsted registered children's home (161 children within Lancashire County Council's boundaries and 57 children outside of Lancashire County Council).

  • There are some parts of the County where there is an extremely high saturation of agency children's homes (as high as 20 Ofsted registered children's homes within one mile). There is a particularly high number of children's homes in Fylde Borough Council (67 children's homes); Preston City Council (59 children's homes); and Wyre Borough Council (53 children's homes). Most other districts in Lancashire have more than 30 agency children's homes, except for Burnley, Hyndburn, Pendle and Ribble Valley.

  • Most of the agency children's homes in Lancashire County Council boundaries are filled with children from other local authority areas, limiting local availability:

    • 70% of agency Ofsted registered children's homes in the County are not caring for any children in the care of Lancashire County Council (July 2026).

    • Only 14% of beds in agency children's homes in the County are being used by children in the care of Lancashire County Council (July 2026).

    • 125 agency providers operate at least one children's home in Lancashire County Council's boundaries. 78 of these providers are not currently caring for any children in the care of Lancashire County Council in any of their Lancashire homes (July 2026).

  • High numbers of children from other local authorities living in Lancashire County Council places significant strain on local services, such as schools, health services and police.

  • More children's homes opening in the County has had very little impact on the number of children in the care of Lancashire County Council living in an agency children's home in Lancashire. Compared to March 2025, there were 76 more agency children's homes in Lancashire County Council's boundaries by March 2026, and over 120 more agency children's home beds. Only 10 more children in the care of Lancashire County Council were living in an agency children's home in the County's boundaries in March 2026, compared to 12 months previously.

  • Increasing numbers of children's homes in the County further exacerbates the already very challenging staff recruitment and retention issues being faced by children's home providers in Lancashire and risks impacting on quality across both new and existing homes.

  • Lancashire County Council's Children's Services now receive offers of suitable homes for most of the children for whom an agency children's home is sought. Competition from the market to provide homes for children in the care of Lancashire County Council is high, particularly for younger age children and those with a lower complexity of need/ behaviours, but also increasingly for children with a higher complexity of need. Offers are considered based on their suitability to meet need in ascending cost order, and less cost-effective homes are less likely to be considered.

  • There remains a very small cohort of children with the most complex of needs that Lancashire County Council can struggle to find homes for. Evidence over the last few years demonstrates that more agency children's homes opening in Lancashire County Council is not the solution to addressing this very specific gap in provision, as their use for the right children (including local children) is not guaranteed. Very few of the new homes that have opened in the County have cared for children from this very specific cohort and most have not cared for a child in the care of Lancashire County Council.

The position of Lancashire County Council's Children's Services

  • Lancashire County Council’s Children’s Services will no longer support any further planning applications for new agency children’s homes within the county unless the provider is working in genuine partnership with Lancashire County Council to create an agreed bespoke home to meet a very specific complex need for a Lancashire child(ren).

  • Lancashire County Council’s Children’s Services will not support requests for a priority Ofsted registration, unless the provider is working in genuine partnership with Lancashire County Council to create a bespoke home for a specific Lancashire child, with a formally agreed plan for that child to move into the home once it is established.

  • Lancashire County Council's Children's Services continues to not support any further residential family assessment units within the County, as there is enough locally to meet demand and competition from this market is high.

  • Lancashire County Council's Children's Services wishes to continue to work with providers of existing children's homes in Lancashire to increase the usage of Lancashire homes for Lancashire children, in line with best practice of children living in homes close to their local community, school and friends.

For further information or to discuss this Market Position Statement, please contact artenquiries@lancashire.gov.uk.