Agenda item

Report of Corporate Director for Children’s and Education Services

Cath Cameron-Jones, Commissioning Service Manager, presented the report and stated the following:

a)  the report sought approval to re-tender the Early Years provision in two Nottingham City Council Family Hubs (Broxtowe and The Meadows) under concession contracts, for a period of 5+2 years starting in September 2025;

b)  the new contracts will require providers to contribute to operating costs, instead of offering free places, ensuring long-term sustainability. This decision is informed by:

• a 3.5% decline in childcare providers in Nottingham since 2022;
• Government expansion of funded childcare entitlements from 2024;
• the need to retain integrated services for families within Family Hubs;

c)  the proposed 5+2 year contract model aligns with best value considerations and ensures market stability, while supporting local employment;

d)  the contract value is £5,906,600 for the Meadows and £5,360,600 for Broxtowe (a total of £11,267,200 over 7 years), with a potential income to cover utilities of around £350,000 over the 7 years;

e)  the Council currently operates four family hubs, previously known as children’s centres, which offer a range of holistic services to benefit children and families in their respective areas;

f)  a children’s centre is defined by Sure Start Statutory Guidance as a place, or group of places, managed by or on behalf of the local authority, to ensure that early childhood services are available in an integrated manner;

g)  these centres provide services either on-site or offer advice and assistance on accessing services elsewhere, and they also host activities for young children;

h)  two of these hubs include external providers offering Early Years childcare for children aged 0-5 years under concession contracts. One of the hubs is located at the Broxtowe Children’s Centre, serving the Aspley and Bilborough wards, with a capacity for up to 48 children. The other hub is based in The Meadows and can accommodate up to 60 children;

i)  the proposed concession contracts have been valued based on the maximum potential turnover for the organisation plus the market rent, which is approximately £17,000 per year per contract (this rent is not charged to the provider);

j)  no payment is made by the Council due to this tender, but a full procurement exercise is required to offer this opportunity to the wider market;

k)  the current contracts, which were let in 2014 for ten years, with a one-year extension, are set to expire in August 2025. It is proposed that the new contracts commence on 1 September 2025 to align with the new school year;

l)  under the Childcare Act 2006, updated in 2016, all Local Authorities have a duty to secure free provision for eligible 2-, 3-, and 4-year-olds and ensure there is sufficient childcare for working parents. While the Local Authority is not responsible for providing childcare directly, it must manage the market to ensure these duties are met;

m)  additionally, the Sure Start children’s centres statutory guidance from 2013 requires local authorities, health service commissioners, and Jobcentre Plus to consider providing early childhood services through children’s centres. This is part of a broader duty for local authorities and relevant partners to work together to deliver integrated early childhood services.

Resolved to

(1)  approve:

(a)  the undertaking of a tender process for the delivery of early years childcare (0-5 year olds) within two internal children’s centres (The Meadows and Broxtowe) from September 2025 for up to 7 years (on a 5+2 year basis);

(b)  that for each contract, an annual amount, as a percentage of the overall running costs of the centre, is charged to the providers of the Early Years childcare service to replace the current arrangement of free childcare places;

(2)  delegate authority to the:

(a)  Director of Commissioning and Partnerships to award the contracts;

(b)  Head of Contracts, Quality and Personalisation to sign the contracts and approve any subsequent variations or extensions.

Reasons for recommendations

a)  The value of the concession contracts has been based on an estimation of the maximum turnover an organisation could achieve if 100% full and charging the current private market rate (approximately £65 a day per child) for places rather than accepting Government vouchers. However, with the expansion of the government funded places, to 30 hours for working families for children of under 5 alongside the increase in availability of the 15 and 30 hours offer to non-working families, means that most nurseries will have limited opportunity for fully private funded places and therefore the actual value is likely to be much lower.

b)  The Family Hubs purpose is to provide integrated services to support children and families in early years. There are a number of other services such as breast feeding support, SEND support, domestic abuse support available at the hubs but the childcare provision takes up 20-25% of the space. No other use has been identified for this space which would meet the needs of the local families.

c)  The services were previously required to offer a set number of free places in return for a free rent and service charge. These places were required for respite but as they have not been utilised in the past few years, other than where the provider has offered a few additional hours on an informal basis to people already accessing their provision and because of the increased eligibility for government funded places, it has been decided that rather than asking for a set number of places, a contribution to the running costs would be required instead. (as detailed in the Best Value section of the report).

d)  Keeping a level of concession (the rental value), rather than offering a straightforward lease, means that the authority can put in place a service specification to ensure the provider does offer social value to the area rather than just running their business for commercial gain.

e)  Having a service run from a council owned building means that some oversight of the quality of provision will help to protect the reputation of the council.

f)  The service requires stability due to investments made by the provider, such as renovating outdoor spaces for children's safety. Therefore, a minimum contract length of 5 years is necessary to ensure stability and support business planning. After 5 years, there will be a review of the market and early years’ service priorities before considering extending the contract for an additional 2 years.

Other options considered

a)  Not providing early years provision within the Children’s centres - Early years provision in the centres encourages the uptake of other services from parents accessing the early years' service and no further suitable alternative uses have been identified.

Further, ceasing to provide the provision would have a negative impact on sufficiency, particularly in the Meadows area where a loss of 60 places would reduce overall capacity by 31% in the area. Within the Broxtowe children’s centre this would only impact of 5% of the provision locally.

b)  Only providing early years provision in the Meadows service where sufficiency is most challenged - the number of children registered with the children’s centre in Broxtowe is quite high, suggesting those children are benefitting from the other services provided at the centre, which they may not be doing if accessing childcare elsewhere. Again, no alternative use has been proposed for the space.

c)  Letting the space as a lease rather than a concession contract - the family hubs must be used for the benefit of families with young children and by having a concession contract we are able to ensure that the childcare provider encourages the take up of other services in the centre and that they work closely with our early year’s services. The specification will ensure that services operating from the hubs take account of the local priorities as identified by the Early Years team. Evaluation of the tender will include social value consideration.

d)  The family hubs are situated in two of the four hubs which have been retained by the city as these were the areas identified as most needing the early years support. A provider who is offering mainly voucher funded places and where accepting private places are charging similar amounts to the voucher scheme is required to ensure local people are able to benefit most from the childcare places.