A care company has been prosecuted and fined for running illegal children's homes in what regulators are calling the first case of its kind in England. Catalyst Care Limited, based in Croydon, is the first unregistered children's homes provider to be successfully prosecuted, according to Ofsted, which brought the legal action.
The company's directors pleaded guilty at Croydon Magistrates' Court to failing to register three children's homes and were fined a total of £92,400. The homes operated in Kent between 2022 and 2025 and housed up to nine children. During that period, the homes received over £1.7 million in payments from local authorities.
Directors Miriam Ekhator and Davidson Lynch-Shyllon were also disqualified from carrying on, managing, or holding a financial interest in a children's home. They were ordered to pay victim surcharges totaling £2,960 and costs of £17,250.
Musa Raji, speaking on behalf of Catalyst Care Limited, said the defendants' "focus was on the children in front of them and sadly not on the paperwork," and they "made mistakes, but did not act out of malice or greed."
During sentencing on Tuesday, Judge Sushil Kumar said it was of "great concern" that the defendants failed to register the homes despite receiving multiple warning letters from Ofsted. Daisy Wrigley, representing Ofsted in court, told the judge the number of unregistered children's homes in the country was not known, which "highlights the importance of registering."
All children's homes in England are required by law to register with Ofsted. Operating without registration is a criminal offense. Ofsted says unregistered homes provide no guaranteed checks on staff or living conditions, and no accountability when things go wrong.
The regulator estimates around 900 illegal children's homes are currently operating in England. A 2024 report by the Children's Commissioner for England found that hundreds of vulnerable children were placed in unregistered homes at any given time, for an average of six months each.
Councils say they often turn to unregistered homes because there are not enough registered places in the right locations, or homes willing to take children with complex needs. Ofsted said new powers granted through the Children's Wellbeing and Schools Act will allow it to issue fines directly, and that increased funding will help identify and investigate unregistered providers.
