The children's care home sector is experiencing a profound shift in the populations it serves. Between 2023 and 2025, the proportion of homes supporting children with complex needs jumped from 66% to 80%—a 14-percentage-point increase in just two years. This rapid change reflects both growing need and market response, but it also exposes critical capability gaps that threaten care quality.
The 2025 Children's Homes Workforce Census reveals a stark reality: while 80% of homes now support complex needs generally, only 16% can handle complex health needs specifically. This mismatch between demand and capability creates placement crises, drives costs up, and leaves children's most intensive needs unmet.
Defining Complex Needs
Complex needs in children's residential care encompasses multiple intersecting challenges requiring specialist intervention:
- Mental Health Needs: 40% of homes can support children with mental health challenges, yet mental health problems affect the majority of looked-after children
- Autism Spectrum Disorder: 52% of homes can accommodate children with ASD—the most common specialist capability
- Learning Disabilities: 33% of homes have capacity for supporting learning disabilities
- Complex Health Needs: Only 16% can handle complex physical health requirements
- Trauma and Attachment Disorders: Requiring therapeutic interventions and trauma-informed approaches
Many children present multiple overlapping needs. A child might have autism, anxiety, and a learning disability—requiring homes capable of addressing all three simultaneously. The 80% figure represents homes supporting at least one complex need category, but capability for multiple concurrent needs is far rarer.
Why Complex Needs Are Increasing
Foster Care Breakdown
The 9% decline in foster care households between 2020-2024 means children with complex needs who might previously have remained in foster placements now require residential care. As foster care capacity shrinks, residential settings become the default for increasingly challenging presentations.
Institute for Government data shows 43% of former foster carers cited lack of support as their leaving reason. Foster carers unable to access adequate support for children with complex needs discontinue placements, pushing these children into residential care.
Escalating Presentations
Early intervention services have faced sustained cuts since 2010. Preventative work that might have addressed problems before they escalated has diminished, meaning children enter care with more entrenched difficulties requiring intensive therapeutic intervention.
The National Audit Office notes rising costs reflect increasingly complex needs among looked-after children. Average annual placement costs jumped from £239,800 in 2019-20 to £318,400 in 2023-24—partly driven by the specialist staffing, therapeutic input, and support infrastructure complex needs require.
Market Response
The 15% expansion in children's homes in 2024-25 predominantly added provision for complex needs. Providers recognize market demand and configure capacity accordingly. However, expanding physical capacity without equivalent specialist capability creates homes that can accommodate numbers but lack expertise to deliver appropriate care.
The Capability Gap
The discrepancy between homes supporting complex needs (80%) and those handling specific categories reveals the problem's scope:
- 64% gap between general complex needs support and complex health needs capability
- 40% gap between overall complex needs and mental health support
- 28% gap for autism support
- 47% gap for learning disabilities
These gaps create cascading problems. When children with specific needs cannot access appropriate placements, they're placed in settings lacking specialist capability. This mismatch often results in placement breakdown, further moves, and deteriorating outcomes.
Critical Issue: Ofsted's 2024-25 data shows 67% of children in residential care are placed outside their home local authority, often because local provision lacks capability for their specific needs. Geographic dislocation compounds the challenges complex needs children face.
Workforce Implications
Supporting complex needs requires specialist workforce capabilities many homes lack:
Specialist Training Requirements
Staff working with children with autism, mental health problems, or complex health needs require specific training beyond basic care qualifications. Trauma-informed practice, therapeutic crisis intervention, de-escalation techniques, and specialized health care procedures all demand ongoing professional development.
The 29% staff turnover rate severely undermines attempts to build specialist capability. By the time staff complete relevant training, many have left—requiring continuous reinvestment in training new staff who may also depart before becoming fully proficient.
Enhanced Staffing Ratios
Children with complex needs often require higher staff-to-child ratios. Some presentations necessitate one-to-one or even two-to-one staffing. These enhanced ratios drive operational costs up significantly—contributing to the £318,400 average annual placement cost.
Finding staff willing and able to work in these demanding roles proves challenging. The 2025 workforce census shows 46,330 staff sector-wide—an 18% increase since 2023—yet shortages persist, particularly for specialist roles.
Cost Implications
Complex needs drive the cost escalation documented by the National Audit Office. Total residential care spending reached £3.1 billion in 2023-24—nearly double the 2019-20 figure—with complexity a major factor.
Ultra-high-cost placements exceeding £1 million annually (36 such placements as of September 2025) almost exclusively involve children with highly complex needs requiring intensive specialist support. Even more moderate complexity significantly impacts costs through enhanced staffing, therapeutic input, and specialist equipment or facilities.
Local authorities face impossible choices: pay premium rates for sparse specialist provision, use general homes inadequately equipped for children's needs, or resort to unregistered provision lacking any regulatory oversight.
Building Specialist Capability
Addressing the capability gap requires strategic investment across multiple dimensions:
Targeted Workforce Development
Developing specialist capabilities demands sustained investment in training, clinical supervision, and professional development. Homes must create learning environments where staff can develop expertise over time—which requires first addressing the 29% turnover undermining workforce stability.
Competitive pay, manageable workloads, access to clinical consultation, and clear career progression all support specialist workforce development. Providers who build stable, skilled teams gain competitive advantage in an under-supplied market segment.
Implementing Therapeutic Frameworks
Evidence-based therapeutic approaches—attachment-focused practice, trauma-informed care, therapeutic crisis intervention—require whole-team implementation, not just individual staff training. These frameworks demand organizational commitment, ongoing supervision, and leadership that models therapeutic principles.
Homes implementing robust therapeutic frameworks can demonstrate superior outcomes, supporting appropriate pricing with commissioners and distinguishing themselves in competitive placements markets.
Clinical and Therapeutic Integration
Only 16% of homes handle complex health needs partly because few have integrated clinical support. Employing nurses, having on-call medical consultation, or partnering with NHS services enables accepting children whose health needs would otherwise exclude them from residential care.
Similarly, access to psychologists, psychiatrists, speech and language therapists, and occupational therapists enhances homes' capability to support mental health and developmental needs. These professional relationships require long-term cultivation and investment.
Adapted Physical Environments
Complex needs often require adapted physical spaces—sensory rooms for autism, equipment for physical disabilities, safe spaces for de-escalation, facilities for therapeutic activities. Retrofitting existing homes or purposefully designing new facilities both require capital investment.
Technology Enablement for Complex Needs
Digital care management systems play crucial roles in supporting complex needs provision:
Individualized Care Planning and Tracking
Children with complex needs require highly individualized care plans addressing multiple intersecting requirements. Digital platforms enable detailed planning, progress tracking, and coordination across multiple professionals—therapeutic providers, medical specialists, educators, family members.
Real-time documentation captures critical information about what interventions work, behavioral patterns, triggers, and successful de-escalation strategies—creating institutional knowledge that survives staff turnover.
Clinical Oversight and Supervision
For homes employing clinical staff or accessing external therapeutic services, digital systems facilitate case discussions, supervision sessions, and treatment plan reviews. Clinical notes, therapeutic interventions, and outcome measures can be tracked systematically.
Outcomes Measurement
Demonstrating effectiveness with complex needs requires robust outcome measurement. Tracking emotional wellbeing, behavioral incidents, educational progress, family contact, and health indicators over time provides evidence of care quality that supports appropriate pricing with commissioners.
Provider Advantage: Homes that can demonstrate through data that they successfully support complex needs—evidenced by outcome improvements, placement stability, and reduced incidents—can command appropriate rates while building reputation as specialist providers.
System-Level Solutions
Addressing the complex needs capability gap requires coordinated action:
- Capital Investment: The £563 million capital funding must prioritize specialist provision, particularly for complex health needs
- Workforce Development Funding: Sustained investment in specialist training and clinical supervision
- Partnership with Health Services: Better integration between children's homes and NHS therapeutic services
- Preventative Investment: Restoring early intervention to reduce escalation
- Foster Care Support: Better support for foster carers might reduce breakdown rates
Conclusion: Meeting the Challenge
The surge from 66% to 80% of homes supporting complex needs in just two years represents both challenge and opportunity. Children entering residential care present increasingly complex presentations requiring specialist capability many homes lack.
The 16% of homes handling complex health needs, 40% supporting mental health needs, and capability gaps across all specialist categories create systemic bottlenecks. Children can't access appropriate placements, commissioners pay premium rates for scarce provision, and homes without specialist capabilities struggle with presentations beyond their expertise.
For providers, building specialist capability offers genuine competitive advantage in an under-supplied market. Investment in workforce development, therapeutic frameworks, clinical integration, and adapted environments enables accepting complex presentations confidently while delivering quality care that achieves positive outcomes.
Technology platforms that support individualized care planning, clinical oversight, and outcomes measurement enable homes to operate effectively at complexity levels previously unmanageable. Data-driven approaches demonstrate effectiveness to commissioners while supporting continuous improvement.
The trajectory is clear: complex needs will continue increasing. Providers who develop authentic specialist capability—through workforce investment, therapeutic excellence, clinical integration, and technological enablement—will thrive. Those claiming complex needs capability without substantive investment risk poor outcomes, placement breakdowns, and regulatory concerns.
For looked-after children with complex needs, quality matters profoundly. The difference between homes with genuine specialist capability and those merely accommodating complex presentations affects life trajectories. Building that capability sector-wide must be an urgent priority.
Take Action: If you're developing specialist capability for complex needs, discover how OVcare's platform supports therapeutic care delivery through individualized planning, clinical oversight, and outcomes measurement that demonstrates your effectiveness to commissioners.
Sources:
- Ofsted, Annual Report 2024/25 (December 2025)
- National Audit Office, Managing Children's Residential Care (September 2025)
- Institute for Government, Performance Tracker 2025 (December 2025)
