Purpose

To endorse contract award report and
recommendations

Content

RESOLVED:
To agree to award a
contract to Provider A to deliver residential care and support for
children looked after, aged 11-17 for a period of five (5) years
with an option to extend for a further two (2) years (5+1+1).
 
Reasons For Decision 
 
This report provides the Cabinet Procurement
and Insourcing Committee with the outcome of the procurement
process of 2 new children’s homes in Hackney, operating out
of 2 Council owned properties, for children looked after.
Following the approval of the contract award,
Officers will proceed with the implementation of the new contract
to commence by 16th January 2026. Pending Ofsted registration, the
homes should be ready for children to move into by September
2026.
 
By commissioning a partner provider we are able to enhance the quality of
experience and care for children looked after. This will be done by
minimising disruption in their lives by keeping them connected to
their communities whilst delivering the savings highlighted. This
approach allows the Council to directly influence the quality of
care experienced by those children.
 
The partner provider will work with the
Children’s Integrated Commissioning Team and Hackney’s
Children & Families Service Management Team (predominantly
Corporate Parenting) to ensure that the service mobilises,
completes Ofsted registration and provides a high quality service
for all children looked after.
 
The successful provider is committed to
reducing their environmental impact. Their robust sustainability
policy details environmental management standards and procedures to
minimise environmental impact at both organisational and service
delivery levels. This is led with the help of their sustainability
manager who is responsible for embedding their strategic aims at
all levels of their organisation. To ensure sustainability
principles are implemented in the children’s homes, the
sustainability manager will produce a sustainability tool kit which
will include accessible information and resources for children and
staff on the practical steps that the homes can take to reduce
waste and improve energy efficiency. In July 2025, the provider
published their first Carbon Reduction Plan, which outlines their
commitment to reach Net Zero carbon emissions by 2050. Although
this timetable is not quite as ambitious as the Council’s own
plans, which aim to achieve net zero by 2040, it will deliver
meaningful carbon reductions over the contract period and aligns
with the shared ambition to create a more sustainable and resilient
borough for future generations.
 
The successful provider is committed to paying
at least the London Living Wage (LLW) to all staff working on this
contract, rewarding staff fairly and paying salaries that reflect
the local market forces. They are also committed to creating job
opportunities that will pay at least the LLW. The social value
commitments will form part of the KPIs for the contract and will be
monitored as part of the contract management process by the lead
commissioners in conjunction with the social value team.
 
There are no TUPE concerns with this contract
as it is
 
Alternatives options
considered and rejected
 
This report provides Cabinet Procurement and
Insourcing Committee with the outcome of the procurement of two new
children’s homes in Hackney that will be delivered by a
partner provider.
 
Three delivery options were considered at the
Business Case stage:
 
Option 1 – Do
Nothing (Considered and Rejected)
Under this option, the Council would continue
to commission residential placements through ad hoc spot purchasing
arrangements. This model provides flexibility but lacks control
over quality and cost, offers minimal influence over placement
availability, and perpetuates the issue of children being placed
outside the borough. It does not address Hackney’s
sufficiency challenges or the strategic ambition to improve local
provision. This option was therefore rejected.
 
Option 2 –
Insource (Considered and deemed not viable at this stage)
 
This option involved the Council directly
operating and staffing the homes. While this would offer maximum
control and integration with Hackney’s practice model, it
presents significant financial, regulatory and operational risks.
Hackney currently lacks the internal infrastructure, workforce and
regulatory experience required to run Ofsted-registered homes.
Financial modelling indicated higher overall costs (approx.
£18.8m whole-life cost). The reputational and compliance
risks of an unsatisfactory Ofsted outcome were also considered
significant. This option was therefore not recommended at this
time, though it remains a medium to long-term ambition.
 
A comprehensive Insourcing/Outsourcing Options
Appraisal was completed and is available as an appendix to the
Business Case report (CE S491) that was previously agreed by CPIC
in July 2025.
 
Option 3 –
Commission a Partner Provider (Chosen Option)
 
This option enables Hackney to commission a
specialist provider with the skills, workforce and experience to
operate the homes to the required standards while the Council
retains ownership of the buildings. The Council can maintain close
oversight through contract management, influence service quality,
and achieve better value for money. The partner provider will be
required to deliver systemic, trauma-informed and anti-racist care
aligned with Hackney’s STAR Practice Model. This option
delivers both improved outcomes for children and financial
efficiency and was approved as the preferred route.
 
The preferred option represents best value for
money, aligns with the Best Value duty under the Local Government
Act 1999, and enables the Council to meet its statutory sufficiency
duty efficiently.