Caerphilly County Borough Council has been granted £700,000 for a third children’s home.
It was revealed in a social services scrutiny committee meeting that the council had received the funding from the Integrated Care Fund (ICF).
The ICF was set up by the Welsh Government to help regional partnership boards develop new trials for delivering health and social care.
While the location of the home is yet to be identified, the council has said that it must fall within the £700,000 budget.
Of the two homes already owned by the council, one is long established and is fully operational, with a capacity of three children.
The running costs average at £500,000 per year and is funded through the children’s services budget.
The second home was bought last year and is still yet to open.
Both the second and third home will offer four placements when they open.
The council said the £700,000 is for purchasing and repairing or improving the property.
The council said: “We are looking at expanding our internal children residential homes to provide wherever possible in house provision.
“This is in line with Welsh Government ambition to bring placements in county whenever possible.”