Purpose

East London
Apartments is a 31-bed single homeless hostel at risk of closure
due to the uncertainty of central government grant funding beyond
31st March 2026. While it is expected that the grant will be
extended, notification will be made too late in the year for action
to be taken.

This report explores options to ensure the short to medium
term sustainability of the service and proposes a competitive
procurement take place before 1st April 2026.
 

Content

DECISION
 

1.    
Authorises the Corporate Director of Health and Adult Social
Care to start the recommissioning and tender process with the award
of the new three-year contract for East London Apartments starting
on 1st April 2026 in accordance with the published evaluation
criteria and in consultation with the
Mayor. 

Reasons for the decision

The current
contract for East London Apartments is expiring on 31st March 2026.
The service comprises a 31-bed specialist supported housing
accommodation for vulnerable Tower Hamlets residents with a history
of rough sleeping and complex needs.
 
This service is
entirely grant funded by central government with the current grant
funding ending on 31st March 2026. Due to the changes to Local
Government funding, notification of the funding is expected to be
received in December 2025 post the Governments spending
review.
 
Should there be
notification from central government of further grant funding in
December 2025, due to the current contract ending on 31st March
2026, there will not be sufficient time to competitively procure
the service and have a new contract awarded for 1st April
2026.
 
To ensure the
Council can competitively procure the Service this process needs to
start now whilst the funding amount is unknown. This is to prevent
the decommissioning of the service which would leave the affected
31 residents homeless and requiring expensive nightly paid
temporary accommodation (probably with an increased uplift to
ensure this cohort are housed) to prevent their homelessness in
accordance with statute. This would increase the in-year
homelessness overspend by £442,000 and £761,000 for
2026/27.
 
Commissioning
activity will begin whilst we are awaiting the funding settlement
and if the funding is not forthcoming (highly unlikely) the service
will be brought to an end. 

Alternative options considered

To agree a
12-month Direct Award sought via Cabinet (likely in
January/February 2026). If this option is agreed it should be noted
that the scheme provider will serve notice on current service users
following the decision being made public and will pause placements
until a new contract is signed (as they did last year). This will
mean that the Homelessness service will be unable to place clients
in the scheme which will add to the requirement of expensive
nightly paid temporary accommodation during the 2025/26 financial
year and increasing the overspend. This option is not recommended
by officers as the Council will need to pick up additional
temporary accommodation costs until the new contract is confirmed.
It was also the view of the Mayor in MAB in February 2025 that
further Direct Awards would not be agreed for this
service