A desperate shortage of foster carers in Britain may force the return of Oliver Twist-style children's homes, a social care expert has warned.
Alarming new figures have revealed there are 10,000 fewer foster families than are needed after an unprecedented rise in the number of youngsters being take into care.
Last year, 53,934 children in the country needed a foster home, compared with 51,009 in 2007.
The increasing demand for placements, paired with a sharp drop in applications to become carers, has forced the UK's fostering system to breaking point.
And with Wednesday's spending review public sector cuts putting further pressure on social services, one expert fears the Government will have no choice but to build ''Dickensian'' children's homes to cope with the shortfall.
Best selling author and foster carer Cathy Glass has warned that it is ''only a matter of time'' before such institutions are needed.
Glass, who has over 20 years experience as a foster carer, said: ''The UK's fostering system is in dire straits.
''There are an increasing number of vulnerable children needing residential placements, and a serious shortfall of foster parents available.
''This number will continue to rise and, if left unabated, the future projection is that the authorities will have no option but to house them in children's homes like those of the 19th-Century.''
Last year, eight out of 10 local authorities reported an increase in foster children, which totalled around 70,000 children nationally, on top of a five per cent rise in 2008-09.
A sharp rise in the number of babies and toddlers being placed in care has been attributed to the aftermath of the Baby P case, in Haringey last year.
In 2009, local authorities urgently needed at least 5,250 foster carers to come forward to look after children who cannot live with their own parents because of abuse or neglect.
Research by the charity, The Fostering Network, has shown the shortage is now most acute in Manchester and the North West of England, where 760 carers are needed by the end of the year.
The shortage of carers often results in brothers and sisters being forced to live apart if the carers available can take only one or two children.
It also causes unsuitable placements, such as teenagers living with carers who specialise in looking after babies.
It is feared the only 'escape route' is the creation of a series of gigantic children's homes capable of housing hundreds of youngsters.
Glass - whose latest book 'Mummy Told Me Not To Tell' tells the story of a damaged toddler in care - blames the Government and local authorities for the shortfall.
She said: "Successive governments have played lip service to funding more foster placements without actually giving local authorities the cash to do it.
"With a shortage of foster carers, local authorites are forced to place children through expensive private fostering agencies to ease the pressure - rather than investing in long-term strategies.
She added: ''Local councils also lose foster carers faster than they can recruit them because of lack of support and parity with other professionals working in social care.
"With no funding to improve the situation councils will have to look for alternatives which may be the creation of large-scale children's homes.
''By placing children in such buildings, we run the risk of insitutionalising youngsters from the outset.''
More than 50,000 children are living with 43,000 foster families, which makes up 68 per cent of all 'looked after' youngsters. Placements vary from a few months to several years.
The Chancellor George Osborne's axe fell on local government social care funding, as grants are set to be cut by 7.1 per cent each year for the next four years.
Although the goverment has said local authorities will be given more flexibility in how to spend the money, with only school and public health funding being ring-fenced there is concern that social care remains unprotected.
Chief Executive of the Fostering Network, Robert Tapsfield said: "The announcement has put local authorities under tremendous pressure to make savings in children’s services when there is ample evidence to suggest they will have to spend more on children in care.
"The rise in children coming into care coupled with the ongoing shortage of foster carers means the system is already struggling to cope and any reductions in spending would be disastrous.
"When looking at budgets local authorities must protect funding for children in care. Failure to do so at a time when the number of children needing foster homes continues to rise would have a devastating impact.
"Placements will be more likely to break down, increasingly unrealistic demands will be placed on foster carers and the children they look after will suffer.
"As corporate parents, local authorities should be striving for the very best for the children in their care and good quality foster care plays a vital role by providing these children with safe, stable and caring homes.
"Any decision to reduce spending on foster care is a false economy and would cost society dear in the long run."
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