Agenda item

Report of Interim Corporate Director of Children and Education Services

Charlotte Dodds, Commissioning Lead Officer, introduced the Children’s Residential Block call-off report, highlighting the following information:

a)  the tender is for two, two-bed homes for those facing challenges within standard residential services, due to diverse needs often requiring specialist support;

b)  the tender is for a five-year contract, with options for two extensions for two years, under the D2N2 framework. It is part of a series of tenders intended to maintain sufficient places. The initial contract period of five years enables initial investment, but the options to extend provide flexibility and easier contract management;

c)  there is a maximum block element, and additional funding for the second child, and the provider’s profit will be weighted towards this second placement;

d)  the Council is asking providers for details costings, to understand the market better and to introduce more transparency into the market for children’s residential homes. 

Resolved to:

(1)  subject to receipt of appropriate spend control approval, to approve spend of up to £18.72m over 9 years for the provision of up to 4 children’s residential care beds, of which up to £11.262m will be as a guaranteed block payment;

(2)  to approve procurement through the existing D2N2 framework of 2x 2-bed residential care homes for children with complex needs for 5+2+2 years;

(3)  to delegate authority to the Director of Commissioning and Partnerships to approve and award the outcome of the tender process;

(4)  to delegate authority to the Head of Service Contracts, Quality and Personalisation to sign the call off contract, save for any agreement/contract being required to be executed as a deed, which shall be executed on behalf of Nottingham City Council by the Director for Legal and Governance / Head of Legal and Governance.

Reasons for decision

e)  offering D2N2 providers a guaranteed income under a block contract will encourage investment in the development of homes for children in care for whom it is challenging to find placements within standard residential services;

f)  the contract is arranged to allow an initial assessment period for both the authority and the provider to ensure the arrangements are working, with extensions to enable longer-term arrangements;

g)  the Council currently has 11 children placed in unsuitable provision, using unregistered accommodation as a short-term emergency fix, but this would help to move children into registered provision as quickly as possible;

h)  these unregistered placements tend to be costly, set up quickly with high staffing levels and prices reflecting the lack of choice within the market. Indicative costs for specialist 1 and 2 bed homes indicate this decision would provide savings, but to invest providers require the assurance of continued utilisation;

i)  the intention is to limit the block contract element to a cost which would enable a 2-bed home to be run as a solo provision with reduced payment for the second child, which would allow the home to be cost effective if it had to be run as a solo home for a period of time, but enable efficiencies of scale when the second child moves in. Weighting the provider profit/surplus to the second child also incentivises use of the second placement.

Other options considered

j)  Waiting for the larger block contract to be let and incorporating these beds into that tender. Going to the D2N2 framework for these beds is a faster process as providers have already been approved, and demonstrates NCC’s commitment to an on-going relationship with the D2N2 framework providers;

k)  continuing to commission on an individual call off basis. This has not proved successful to date, either through the D2N2 framework or by sport purchasing and providers have indicated that a block arrangement would give them more confidence to invest in property and ring fence beds for Nottingham City.