Private companies competed to earn up to £120m providing unregulated housing for vulnerable teenagers in care last year despite concern that it leaves young people open to exploitation and abuse. A Guardian analysis of a platform where local authorities advertise contracts for tender reveals the scale of the unregulated marketplace, where young people in the care system are placed in accommodation not regulated by Ofsted, the watchdog for education and children’s services. From July 2020 to January 2021, 12 councils advertised for companies to provide semi-independent unregulated housing for teenagers and care leavers for a total of £121.9m. Placing young people in such provision has come under intense scrutiny. In February the education secretary, Gavin Williamson, said it would be illegal from September for children under the age of 16 to be in accommodation not checked by Ofsted. Critics said this risked creating a two-tier care system where teenagers over 16 are neglected and unprotected. The former children’s commissioner Anne Longfield said some teenage children in care lived in dangerous accommodation including hostels or caravan parks, and 17-year-olds could be “easy prey” for people who abused children. Tulip Siddiq, the shadow minister for children and early years, said she was concerned that “thousands of vulnerable children are being placed in unsuitable, potentially unsafe accommodation which taxpayers are footing an eye-watering bill for.” She said the government “needs to bring an end to their over-reliance on ineffective outsourcing and rethink their shortsighted decision to allow older children to be placed in unregulated accommodation.” Unregulated accommodation, often known as supported or semi-independent accommodation for those over 16, is not inspected by a regulator in England or Wales. It is allowed within the law because sites are qualified to offer support not care. But critics say unregulated accommodation is unsuitable due to the lack of monitoring. Vic Langer, the interim chief executive at Become, the national charity for children in care and young care leavers, said young care-experienced people had frequently spoken out about the lack of security, stability and support available while living in unregulated accommodation. Carolyne Willow, the director of the charity Article 39, said: “It took a year and a half for the education secretary to announce that local authorities would be stopped from putting children in care into unregulated accommodation – but only if they are aged 15 or younger, and only from September 2021. “Providers of this type of accommodation, the majority of them profit-making, bypass the law governing children’s homes because they don’t provide care to children. How can it be right that children are in the care of the state yet don’t receive care? This is not a hidden scandal, the Department for Education is well aware that extremely vulnerable teenagers are going without care.” Northamptonshire council published a £32m framework agreement – a deal between contracting authorities and economic operators to establish the terms governing contracts to be awarded during a given period – for the provision of supported accommodation services for the next four years. A spokesperson said: “This is a framework and not a block contract valued at £32m awarded to one provider. The framework is for supported accommodation for ages 16-plus, not just 16-18, so also includes care leavers over the age of 18, for example. We award individual contracts with service providers as and when needed.” Enfield council awarded £19.5m to 21 suppliers of semi-independent accommodation to run services over the next three years. A council spokesperson said: “We take the safety of those in our care and care leavers extremely seriously and as these types of placements are unregulated (by Ofsted) we monitor the quality of provision ourselves through placement commissioners, social workers, personal advisers, parents/carers and independent reviewing officers.” Cheshire East council handed over £2.5m to two companies to provide accommodation for those over 16. A council spokesperson said: “Not all cared-for children aged over 16 require an accommodation, some live with families or may return home, however it is important to ensure quality provision for our cared for children.” Langer said: “The government claims that the use of this sort of accommodation for 16- and 17-year-olds can be a helpful step towards independence, but the evidence suggests this isn’t how it’s being used for many people, including those seeking asylum and those who have only recently come into care, who typically need more, not less support.” A Department for Education spokesperson said: “Independent and semi-independent provision can be the right option for older children where it is high quality and they are ready for this. We will be introducing national standards to raise the bar in the quality of this provision, and unregulated placements will be banned for under-16s from September. “This is alongside our work to review the children’s social care system, which will set out to radically reform the system. The independent review will be bold and take a fundamental look at how the system should work for those it is designed to serve.”