Purpose

Proposed
decision
 
That the Cabinet Member for
Integrated Children’s Services:
 

(a) 
APPROVE the establishment of in-house provision for
children and young people
 

(b) 
Note that the progression of establishing an
in-house model will require £3.8m capital funding to be
allocated through the 2025 budget setting process and
 

(c) 
AGREE that progression will be subject to Full
Council’s approval of the budget.
 

(d) 
DELEGATE authority to the Corporate Director of
Children, Young people and Education to design and implement the
staffing and asset utilisation model to support the establishment
of in-house provision for children and young people
 

(e) 
DEGELATE authority to the Corporate Director of
Children, Young people and Education, in consultation with the
Cabinet Member for Integrated Children’s Services, to
initiate and progress the OFSTED registration process
 

(f)   
DELEGATE authority to the Corporate Director of
Children, Young people and Education to take other relevant
actions, including but not limited to finalising the terms of and
entering into required contracts or other legal agreements, as
necessary to implement the decision
 

(g) 
DELEGATE authority to the Director of
Infrastructure, in consultation with the Deputy Leader and Cabinet
Member for Finance, Corporate and Traded Services, Corporate
Director for Finance, and General Counsel, to approve and execute
all relevant property matters as required to implement the
decision.
 
Reason for the decision
 
Increasing residential
placements costs within children’s services was identified as
a critical area within ‘Securing Kent’s Future’
(2023). As part of our long-term financial sustainability planning
for Children’s High-Cost Placements, investment in Kent
County Council’s own in-house provision is considered as part
of a range of options to deliver best value and better outcomes for
children.
 
The proposed decision
is an invest to save proposal by KCC to develop and offer its own
Ofsted registered children’s residential homes to address
high-cost placements, for children whose needs require support in
such provision.
 
Investing in our own
in-house provision will achieve better outcomes for children
through positive behaviour approaches, deliver revenue savings over
the Medium-Term Financial Plan period and enhance financial
sustainability of service delivery, as part of our longer-term
strategy for mixed provision (both in-house and
commissioned).
 
Background – Provide brief additional context
 
KCC’s current
policy is to commission placements from private providers, in spot
purchasing arrangements given the immediate and complex needs of
children. This means our costs are determined by market forces and
pricing decisions by providers, which whilst influenced through our
commissioning approach, limits our financial control. Having an
element of in-house provision would enable the Council to control
costs more directly (e.g. property and staffing costs).
 
Children with complex
needs require different types of care and support placements, which
can lead to significant costs. These types of placements can often
involve intensive ratios of staff support to keep the child safe
and can involve specialist residential settings (in or out of
county), with limited options available in the market. KCC is
actively working to reduce the use of unregistered accommodation
(i.e. accommodation which is not registered with Ofsted).
Unregistered accommodation is used only exceptionally in an
emergency when there is no other alternative in circumstances of
imperative necessity and where the placement is essential to avoid
a breach of the child’s Convention rights.
 
Nationally, other
local authorities have made the decision to invest in their own
in-house provision, as well as commissioned provision, as part of a
longer-term sustainable strategy for managing placement costs and
rising demand for placements of children with complex needs. Many
local authorities are already operating, or in the advanced stages
of delivering a range of types of accommodation, including in-house
residential homes.
 
The proposal is to
develop a short/medium term service (emergency provision) to
support stabilisation of the child’s complex behaviours and
step down their needs whilst suitable longer-term provision in more
‘home like’ settings is secured to achieve better
long-term outcomes. This aims to avoid the number of children being
placed in expensive commissioned placements, and/or unregistered
placements.
 
This aims
to:

·     
Enhance outcomes and service quality for
children

·     
Transition children to better matched and best value
registered placements

·     
Enhance our social work offer for children, young
people and families

·     
Mitigate risk to KCC and our children by reducing
the likelihood of unregistered      placements, poor
continuity of care or inappropriate settings

·     
Use KCC’s commissioning arrangements to
further negotiate improved costs across the market

·     
Using strengths-based models, increase likelihood of
future cost avoidance by increasing independence and stability,
better outcomes and emotional toolkits for children accessing the
service.

·     
Ensure KCC is acting lawfully in only placing
children in registered children’s homes under section
22C(6)(c) of the Children Act 1989
 
 
Options (other options considered but discarded)

 
A wide range of
options were considered in an options appraisal, informed by key
stakeholders and subject matter experts. This included
consideration of best value, the opportunities (e.g. potential
benefits and ability to deliver critical success factors) and
risks, impacts and potential challenges for each option.
 
The proposed
recommended option is to develop an in-house service, operating
from C2 residential homes owned and operated directly by Kent
County Council. The service would use positive behavioural
approaches and therapeutic community support to stabilise and step
down the needs of children and young people. The homes would be
Ofsted registered and staffed by KCC staff. The placements would be
targeted at children and young people in high costing placements,
including those placed in unregistered provisions. Whilst KCC would
continue to progress with developing its own provision, joint
working with Health and Medway Council would be pursued alongside
this option.
 
 
Other options which
were explored but discounted in the options appraisal
included:
 

·     
Do nothing and continue to utilise existing external
providers and commissioning arrangements to lower placement costs
including spot purchase from private providers.
 

·     
Jointly invest with Health and Medway Council in
KCC’s own residential property assets for short/medium term
use with the intention to set up further provisions for long term
care, developing support from therapeutic communities.
 

·     
Use a phased approach with the initial focus on
setting up targeted intervention (for example, therapeutic support
for a set amount of time to reduce need and cost) for children who
are high cost or who are likely to become high cost (including
unregistered) and commissioning solutions such as developing a
framework of providers, block contract with private providers or
commissioning a private provider.
 
How the proposed decision supports the

Framing Kent's Future - Our
Council Strategy 2022-2026
 
The proposal aligns to
the key priorities set within Framing Kent’s Future through
Priority 1, Levelling up Kent and Priority 4, New Models of Care
and Support.
 
Priority 1, Levelling
up Kent - In-house provision in Kent could support the Kent economy
to be resilient with market changes as part of a long-term strategy
with providers, whilst using preventative approaches to improve
outcomes for children and young people in Kent.
 
Priority 4, New Models
of Care and Support - In-house provision could support some of the
most complex and vulnerable children and young people within Kent
whilst enhancing commissioning practice, using innovative and
alternative methods to deliver care and building on partnerships to
deliver best outcomes.
 
How the
proposed decision supports Securing Kent’s Future 2022
-2026:
Securing Kents Future - Budget
Recovery Strategy.pdf
 
The proposal sets out
a strong case for investment to create in-house provision as part
of a longer-term financial sustainability strategy of mixed
provision that will support the council in achieving its strategic
objectives in Securing Kent’s Future. ?
 
Achieving best value
from in-house provision is not just about financial viability and
cost-effectiveness but is also about considering whether
sustainable outcomes for children are likely to be enhanced and to
increase quality of life and everyday independence skills, choice,
control and personal agency.
 

Financial Implications

 
The recommended option
presents best value and is affordable and financially viable. The
£3.8m capital investment was agreed in principle through
KCC’s Capital Funding governance arrangements but is subject
to final approval of the budget at County Council in February 2025.
Accounting for a range of revenue costs (including property,
staffing and supported borrowing costs), the financial case shows
that in-house provision is substantially more cost effective than
private provision (£9.98m compared to £15.19m), with an
overall net revenue saving of -£5.21m in the next 5 years,
delivering savings over the Medium-Term Financial Plan.
 
This revenue saving
relates to KCC’s agreed 2024-2027 budget (approved by County
Council in February 2024) which set out policy savings for
Children’s Residential Care (development of in-house
residential units to provide an alternative to independent sector
residential care placements – invest to save).
 
At this stage KCC has not identified specific properties
which may be acquired. This is due to the limited C2 use class
market and time sensitive nature of decision taking around property
acquisitions. The decision therefore delegates authority to the
Director of Infrastructure to identify and acquire property(s) to
meet the service needs subject to this being within the capital
envelope of £3.8m to facilitate the provision of four units
and two beds each.
 
As required in the Council’s new Asset Management
Strategy full lifecycle costings will be factored into the
financial appraisal. This will ensure the acquisition of properties
does not lead to additional pressures on the Council’s
limited maintenance budgets and to ensure the long-term financial
sustainability of the service.
 
Should the proposal
proceed into implementation this necessitates the requirement for
the provision to be Ofsted registered. The registration process
decision is made by Ofsted and the time this process takes is
outside of KCC’s direct control. In other local authorities this has taken up
to a year. There is a financial risk a delay
in registration approval delays the operational start date and
could impact the financial year when revenue savings could be
achieved. The
revenue costs take into account contingency that staff employed
could be redeployed flexibly on other work whilst we await
registration and also assume contingency for occupancy.
 
Legal
Implications  
 
This proposal will
continue to support children and young people within KCC’s
statutory framework and Ofsted registered provision.
 
The key legal
considerations associated with the development of registered
children’s homes by KCC are as follows:
 

KCC
has the power to develop and establish registered children’s
homes under section 53 of the Children Act 1989 and/or further to
the general power of competence set out in section 1 of the
Localism Act 2011.
The
ways in which looked after children are to be accommodated are set
out in section 22C of the 1989 Act. Generally, local authorities
must not place a child in an unregistered children’s home.
The only caveat to this is that unregistered
accommodation may be used exceptionally in an emergency when there
is no other alternative in circumstances of imperative necessity
and where the placement is essential to avoid a breach of the
child’s Convention rights.
Further to the Supported Accommodation (England) Regulations
2023, as of 28 October 2023, local authorities can accommodate a
child aged 16 or 17 in supported accommodation only in
circumstances where the owner/provider applied for Ofsted
registration prior to that date. Given that any such application
should now have been processed, the practical effect of this is
that local authorities must not place children in or arrange
supported accommodation if it is not registered with
Ofsted.
In
accordance with the Care Standards Act 2000 and the Care Standards
Act 2000 (Registration) (England) Regulations 2010, KCC will
therefore need to seek registration of its children’s homes
and the manager(s) of the homes from Ofsted. The children’s
homes and the manager(s) will then be subject to Ofsted’s
regulatory regime.
It is
anticipated that the effect of the proposal will be that there will
be a reduction in the number of placements in unregistered
accommodation.

 

Decision

As Cabinet Member
for Cabinet Member for Integrated Children Services, I agree
to:
 
(a) 
APPROVE the establishment of in-house provision for children and
young people
 
(b) 
Note that the progression of establishing an in-house model will
require £3.8m capital funding to be allocated through the
2025 budget setting process and
 
(c) 
AGREE that progression will be subject to Full Council’s
approval of the budget.
 
(d) 
DELEGATE authority to the Corporate Director of Children, Young
people and Education to design and implement the staffing and asset
utilisation model to support the establishment of in-house
provision for children and young people
 
(e) 
DEGELATE authority to the Corporate Director of Children, Young
people and Education, in consultation with the Cabinet Member for
Integrated Children’s Services, to initiate and progress the
OFSTED registration process
 
(f)   
DELEGATE authority to the Corporate Director of Children, Young
people and Education to take other relevant actions, including but
not limited to finalising the terms of and entering into required
contracts or other legal agreements, as necessary to implement the
decision
 
(g) 
DELEGATE authority to the Director of Infrastructure, in
consultation with the Deputy Leader and Cabinet Member for Finance,
Corporate and Traded Services, Corporate Director for Finance, and
General Counsel, to approve and execute all relevant property
matters as required to implement the decision.