The Government is consulting on plans to make it illegal to put children in care aged under 16 in unregulated accommodation, amid concerns that some are being left at risk of exploitation.
Minimum standards would also be introduced for unregulated accommodation, which provides accommodation but not care.
The LGA has warned that making unregulated settings illegal for under-16s will not solve the problem unless the Government works with councils and providers to ensure there are enough high-quality, registered places for children.
Cllr Judith Blake, Chair of the LGA’s Children and Young People Board, said: “The welfare of all children is of the utmost importance to councils, and they do all they can to find the right accommodation and support for all children in their care.
“Good-quality, unregulated settings can be the right accommodation for some young people as part of their transition to independence. The increasing use of unregulated settings is being driven by shortfalls in places in registered children’s homes and other settings, particularly for young people with more complex needs.
“The funding crisis facing children’s services is also hindering efforts to develop and maintain the right provision locally that meets the needs of young people.”
She added: “Providers of unregulated settings must work with councils, the police and other partners to ensure the safety and wellbeing of young people. We want to work with the Government to make sure this happens.
“It is vital that the Government uses this consultation to better understand the pressures on accommodation for children in care, and provides appropriate funding and support to ensure that the right homes in the right places are available for all children, whatever their needs.”