SafeSpace4U made £1.3m from unregistered children’s homes as safeguarding concerns mount

10 August 2026 , 09:34

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With its neat garden and tightly closed blinds, the small terraced house on the windswept north-west peninsula of the Wirral looks unremarkable.

In fact, it is the registered headquarters of SafeSpace4U, a company currently under criminal investigation for running illegal children’s homes across England, raking in huge sums of public money for housing some of the country’s most vulnerable kids – and doing so with no oversight from a regulator.

Homes operate illegally if they are not registered with Ofsted, yet a huge shortage of legal provision means that councils send hundreds of children to such places every year. But in this booming “shadow care” industry, there are no guarantees of quality or safety.

Safespace4U said it had applied to be registered but Ofsted told us it hadn’t accepted the company’s applications.

People who live near homes run by SafeSpace4U have told us of seeing children “dragged down the road” by staff (an allegation the company denies). More alarmingly still, the company’s registered address is owned by a convicted criminal with links to organised crime groups on Merseyside.

Some of SafeSpace4U’s homes are managed by Richard Douglas, a former soldier who we also revealed today has been accused of rape by two women – allegations he denies. And he in turn is linked to one of the most harrowing incidents so far uncovered in the sector, having given references to two convicted criminals who went on to abuse a teenage girl in an illegal home.

In a statement provided via his legal representative, Douglas said he had a brief relationship with one of the women, Grace*. He denied raping her and claimed she had been motivated to make the allegation through jealousy.

Douglas said he needed more time to request information from the police and the Ministry of Defence before formally responding to the other allegations, though in an earlier phone call with one of our journalists he denied some of them, including the second alleged rape.

SafeSpace4U says Douglas has operational responsibilities within the company but that care at each of its homes is delivered by trained teams following safeguarding policies.

SafeSpace4U is currently subject to 19 safeguarding referrals being investigated by local authorities – six by Wirral council and 13 by Plymouth. The company says these referrals are a “routine mechanism used by local authorities whenever concerns are raised and do not, of themselves, establish wrongdoing”.

We’ve found through FOI analysis that at least seven councils – Wandsworth, Barking and Dagenham, Tameside, Worcestershire, Leicestershire and Plymouth – have placed children in homes run by SafeSpace4U. The company has converted at least 19 houses into unregulated care homes across the north-west. And in the last two years alone, it has made £1.3m from its illegal placements.

But despite its six-figure turnover, the company has no website, public phone number or social media presence. Its name will be familiar only to councils searching for beds for vulnerable children.

Gangland connections

The Wirral house is owned by John McDonough, who was convicted in 2019 as part of a Merseyside drugs ring. He was living in the property when he was arrested for his part in an operation that saw rented homes turned into cannabis farms.

It wasn’t his first appearance in court. In 2014, after an incident when McDonough stabbed an armed intruder, a court heard that he was a drug dealer with thousands of pounds hidden in his sofa.

McDonough now describes himself as a consultant and director. Having previously run a real estate firm from the Wirral address, he now runs an education support company registered there, though he says the company has never traded. He has a child with the owner of SafeSpace4U, Sian O’Neill.

In a statement, O’Neill accepted that SafeSpace4U’s registered address is owned by McDonough but said he had no involvement in the company.

McDonough told us he rents the property to O’Neill. He acknowledged his “past legal matters” but said they had no relevance to O’Neill or SafeSpace4U, and that associating them would be “misleading and inappropriate”.

Another SafeSpace4U property is owned by a Merseyside landlord convicted of care offences. A care facility on the Wirral is owned by Amjad Latif, who was fined in 2017 for running a “depressing, unhygienic and unsafe” old people’s home that was shut down by inspectors.

While the providers of registered children’s homes are vetted by Ofsted, there are no such checks in the shadow industry, and concerns are rising about criminal involvement. Yvette Stanley, Ofsted’s social care director, warned this month of the sector’s alleged links to drug smuggling, money laundering and county lines gangs – and that some homes are being actively set up to act as fronts for criminal enterprises.

‘Dragged down the street’

The care home owned by Latif was subject to a petition from local residents in 2024, after SafeSpace4U applied to use the property as a children’s home. They claimed the company had been doing this illegally already, and it had led to an increase in emergency service callouts and aggressive behaviour in the streets (allegations the company rejects).

One resident, who asked not to be named, said people had complained about the home to Ofsted but that it didn’t “seem to get them anywhere”.

Another resident told us he saw a girl climb onto the roof of the care home and another girl being manhandled by staff. “Three big muscly guys … dragged one of the kids down the road. One had a right arm, one had a left arm. She was getting dragged along the road on her bum,” he said.

At one point, he saw a taxi driver turn up to work a night shift in the home: “They don’t seem to be professional carers,” he added.

His wife told us the home was unsuitable for children. “There’s … just a patio at the front on the road,” she said. “They’ve got no friends, with no outside space – you know, nothing to do.”

The thing that disturbs me most is that this 15-year-old girl was being looked after by three males. I don’t think that’s right. -Local resident

The couple once took in a 15-year-old girl who had been staying at the home for more than six weeks. “She was quite distressed. [At the care home] she just watched TV and listened to music all day,” said the resident. “She would have had a better life in prison.”

“She was just frustrated … she wanted to bake with me,” said his wife. “The thing that disturbs me most is that this 15-year-old girl was being looked after by three males. I don’t think that’s right.”

O’Neill rejected residents’ descriptions of the care provided at the home. She said the children placed in her company’s care “frequently present with highly complex needs and behaviours”.

“Where intervention is necessary to prevent immediate harm, staff are trained to act lawfully, proportionately and in accordance with safeguarding procedures, individual care plans and applicable legislation,” she added.

Ofsted said it was tackling illegal children’s home providers through criminal prosecutions but it couldn’t comment on individual investigations.

“Unregistered homes put children at risk of being looked after by unvetted and unsuitable people,” said a spokesperson. “There are also signs that profiteering and criminality are increasingly a problem in the sector.”

Four of the seven councils placing children with SafeSpace4u responded to our questions. Both Tameside and Barking and Dagenham said they would not be sending children to the company’s care homes again, while Wandsworth and Calderdale said they only used unregistered accommodation in emergencies. They all said they monitored such placements to ensure children were safe.