Illegal Children’s Homes: How KCC and Medway Paid Catalyst Care £2.5m

Kent County Council and Medway Council’s published records identify £2,493,697.74 paid to Catalyst Care Limited: £2,419,480.59 from KCC and £74,217.15 from Medway for placements of children in three unregistered children homes in Kent, between April 2021 and July 2025..

KCC’s ledger contains several service descriptions, including supported living for adults, while neither council’s published data identifies individual children or properties. It does establish a substantial public-sector relationship with the company before and during the period in which its directors admitted operating children’s homes without registration.

Nor should £2,493,697.74 be treated as an audited ceiling. KCC publishes net invoices above £250, excludes information that could identify or endanger vulnerable people and says its reports retain original payment dates without subsequent corrections. It is the amount publicly identified, not necessarily every payment ever made.

Nine children—but not necessarily only nine

Ofsted’s prosecution concerned ten charges, three unregistered properties and nine children between 2022 and 2025. Those nine are the verified number covered by the criminal case.

They aren’t Catalyst’s complete placement history.

A prosecution deals with the conduct charged before the court. It doesn’t automatically disclose every previous resident, short placement or child accommodated outside those charges. No anonymised register has been published showing how many different children passed through the properties, how long they stayed or which councils placed them there.

Lynch-Shyllon told court reporters that “untold numbers” of young people had passed through the homes.

The directors weren’t bit players

Catalyst Care was incorporated on 24 August 2020. Its directors and controlling shareholders were Davidson Joses Lynch-Shyllon (below left) and Miriam Lucy Ekhator (below right). Companies House records each as controlling more than 25% but no more than 50% of the shares and voting rights, with the power to appoint or remove directors.

 

The company’s accounts from 2021 to 2024 consistently named both as directors, with Lynch-Shyllon signing each directors’ report on behalf of the board. He also signed the latest micro-entity accounts, approved on 3 July 2026.

They controlled Catalyst while the public money arrived and while the criminal offences occurred. They weren’t recent appointees who had inherited somebody else’s operation.

Guilty pleas and a £112,610 bill

Lynch-Shyllon and Ekhator pleaded guilty at Croydon Magistrates’ Court in March 2026. On 4 August 2026 they were fined a combined £92,400, ordered to pay £17,250 in costs and £2,960 in victim surcharges—a total of £112,610.

Both were disqualified from managing, carrying on or holding a financial interest in a children’s home. The case was reported as Ofsted’s first criminal prosecution of this kind against an unregistered children’s-home provider.

The law isn’t foggy. Anyone carrying on or managing a children’s home or supported-accommodation service without registration commits an offence under section 11 of the Care Standards Act 2000. An intention to apply, an incomplete application or an application awaiting a decision doesn’t provide temporary permission to continue operating.

Registration isn’t bureaucratic window-dressing. Registered homes face suitability checks, regulatory oversight and inspection. Ofsted says children living in illegal homes lack those independent safeguards and may be cared for by people who haven’t been shown to be suitable.

The KCC money trail begins in 2021

KCC’s identified payments total £2,419,480.59: £179,065.65 in 2021/22, £437,632.76 in 2022/23, £758,817.14 in 2023/24, £947,755.05 in 2024/25 and £96,209.99 in 2025/26 up to 28 July 2025. Spending peaked in 2024/25, just £52,244.95 short of £1 million.

KCC’s published records identify at least £2.42 million paid to Catalyst Care between April 2021 and July 2025. The 2025/26 figure is partial, while payment dates don’t necessarily show when care was provided.

Payment entries dated between October 2022 and April 2025—the broad period covered by the admitted offences—total £1,962,500.68. The remaining £456,979.91 falls outside that window.

What was KCC paying for?

Of the £2,240,414.94 contained in the later 75-row extract, £1,772,994.94 across 60 entries was described as “Semi-Independent Placement”. A further £461,920 across 14 entries was recorded as long-term supported living for people aged 18 to 64 with learning disabilities. One £5,500 entry concerned short-term non-residential support.

Those descriptions prevent any responsible claim that the whole KCC total paid for children living in the three illegal properties. They also leave the central question unanswered: which invoices concerned adults, which concerned children, which properties were used and what registration checks were completed before each placement?

Ofsted examines the care and accommodation actually being delivered. A setting operating as a children’s home must be registered as one, while supported accommodation for looked-after 16 and 17-year-olds is also subject to registration.

KCC’s “High Assurance” audit

KCC Internal Audit gave its 2023/24 review of “Unregulated Care Placements” a High Assurance opinion, with “very good” prospects for improvement. The report went before the Governance and Audit Committee in May 2024, while KCC’s payments to Catalyst continued.

The published summary recorded positive assurance around invoice and portal-payment accuracy, the ending of payments and children in its sample being placed through KCC’s approved-provider list.

It didn’t say auditors checked the live Ofsted registration of every property, didn’t name Catalyst and didn’t establish that any of its three homes formed part of the sample.

The fair question therefore isn’t whether auditors “approved Catalyst”; the public report doesn’t show that they did. The sharper question is whether KCC’s control system included a live check that the individual property housing each child was lawfully registered.

If it did, KCC must explain what failed. If it didn’t, the High Assurance label was narrower—and far less reassuring—than the public might reasonably have understood.

KCC should also disclose whether it is still paying for unregulated or unregistered placements and, where it is, whether both the provider and the individual property hold the required Ofsted registration.

Responsibility at County Hall

The payment trail crossed the tenures of two KCC corporate directors. Matt Dunkley was Corporate Director of Children, Young People and Education from November 2017 until his retirement in May 2022. Sarah Hammond then held the role throughout the remainder of the identified payment period and was still Corporate Director when political control changed in May 2025.

     

Hammond moved to become Interim Corporate Director of Adult Social Care and Health on 6 October 2025. She left KCC at the end of June 2026 as we understand.

KCC’s constitution makes the Corporate Director the statutory Director of Children’s Services, professionally responsible for the effectiveness, availability and value for money of children’s services. The post also carries responsibility for safeguarding vulnerable young people and ensuring compliance by the directorate and its commissioned providers.

KCC should as a matter of urgency disclose when senior management first became aware of the company, what assurances were obtained, whether concerns were escalated and what action followed, as £2.5m has left KCC coffers to fund convicted criminals.

Who paid under which administration?

Most of KCC’s identified spending occurred before the May 2025 election. By polling day on 1 May, £2,367,517.74 had been paid. A further £51,104.29 was recorded during the political handover from 2 to 21 May, while £858.56 was recorded in July 2025.

That raises a legitimate question for DOLGE; which began in June 2025. Its stated purpose was to examine spending, procurement, savings and value for money across KCC. Did that work include Catalyst Care, children’s placements and provider compliance? Obviously not.

If the payments were examined, KCC should publish the conclusion. If they weren’t, it should explain why a relationship worth more than £2.5 million escaped scrutiny.

The change of political control doesn’t erase the council’s institutional responsibility. The present administration inherited the payment records, placement files, commissioning decisions, audit reports and officers capable of explaining what happened.

Medway paid before the charged period

Medway’s November and December 2021 spending files contain three Catalyst payments: £65,142.86 on 24 November, £8,571.43 on 22 December and £502.86 on 23 December. Together they total £74,217.15.

The first two were described as supported accommodation and the third as client expenses.

Those payments pre-date the reported offence period beginning in 2022, so they mustn’t be described as payments made during the admitted offences. They remain relevant because they show Catalyst’s work with Kent public authorities was already under way in 2021.

A balance sheet that ballooned, then shrank

Catalyst’s 2021 accounts described its principal activity as “Care for young adults”. The company reported £1,024 in net assets, £99,397 in cash and £123,633 owed to creditors within a year. Its average workforce, including directors, was recorded as zero, while dividends totalled £26,371.

By August 2022, net assets had reached £60,372. The average workforce was two and dividends for the year were £112,371, taking the disclosed dividend total for 2021 and 2022 to £138,742.

Net assets rose again to £144,018 in 2023 and £370,488 in 2024. At August 2024, Catalyst reported £224,395 in cash and £266,475 in debtors. Of that debtor balance, £170,593—64%—was owed by group undertakings. The accounts didn’t identify the undertaking or disclose the terms, purpose or repayment date.

The expansion didn’t last. By August 2025, net assets had fallen to £67,707, a one-year drop of £302,781, or 81.7%. Current assets fell from £490,870 to £163,536, creditors due within a year stood at £137,890 and the average workforce remained three.

Catalyst Care’s net assets rose from £1,024 in 2021 to £370,488 in 2024, before falling to £67,707 in 2025. Net assets aren’t the same as turnover, profit or cash.

The filed small-company accounts don’t disclose annual turnover or profit. The court was told that Catalyst’s turnover increased from £190,000 in 2021 to £955,000 in 2024—a rise of £765,000, or 402.6%.

The court also heard that Lynch-Shyllon and Ekhator each received £193,000 in dividends during the period covered by the charges.

The wider company trail

While the offence period was continuing, Lynch-Shyllon and Ekhator incorporated Catalyst Casa Ltd in June 2023. Companies House records both as its controlling shareholders, while its business classifications include renting housing-association property and residential property management.

It was Catalyst Casa Ltd—not Catalyst Care Limited—that received first compulsory strike-off notices in September 2024, May 2025 and September 2025. All three actions were discontinued.

White Hut Studios in Education CIC, connected to Lynch-Shyllon and registered at the same business-centre address, received a first compulsory strike-off notice in September 2023. That action was also discontinued.

These notices form part of the companies’ registry histories. They aren’t, by themselves, evidence of insolvency, criminality or wrongdoing.

The questions that remain

The public record establishes that KCC and Medway paid Catalyst Care £2,493,697.74, that its two controlling directors admitted ten offences involving three unregistered homes and nine children, and that a substantial part of KCC’s payment stream overlapped the broad offence period.

KCC and Medway should publish, without identifying any child, the number of unique children placed with Catalyst, their age bands, placement dates, properties used, weekly charges, service type and the registration checks completed before each placement.

They should also disclose when warnings were received, whether former residents have received safeguarding reviews, whether any payments are being considered for recovery and whether other placing authorities used the same properties.

Until those records are released, the public still doesn’t know how many children were placed there, who checked the addresses or why the money kept moving into the hands of convicted criminals.