The Cabinet Procurement and Insourcing Committee of Hackney Council met on Monday 8 January 2024, approving a new Dynamic Purchasing System for independent fostering agencies and agreeing to award a contract for leasehold buildings insurance. The committee also confirmed the minutes from the previous meeting.

Commissioning Framework Homes for Looked After Children and Care Leavers via London Borough of Newham Dynamic Purchasing System

The committee agreed to join an established Dynamic Purchasing System (DPS) managed by the London Borough of Newham for the provision of independent fostering agencies. This decision aims to ensure that Hackney Council can continue to fulfil its corporate parenting duties, particularly for children requiring specialist support, and to achieve greater efficiency in placing looked-after children. The previous arrangement, which relied on London Care Services, ceased to operate in April 2023, leading to increased fee reviews and spot purchase price increases for many London authorities. The new DPS, which will expire on 8 March 2026 with an option to extend for a further four years, does not commit the Council to a specific level of expenditure. The committee also agreed to redirect funding previously allocated to the London Care Services subscription towards the management fee of the new DPS, which is £6,300 per annum.

During the discussion, it was noted that Hackney Council was already working with 25 of the 27 providers on the Newham DPS. Members were assured that while fees for specialist services could not be renegotiated, work would be undertaken with other local authorities to drive improvements in quality. The committee was informed that the DPS is a formal contractual arrangement with regular monitoring, and it is anticipated that more local authorities and providers will join. The aim is to achieve cost avoidance through better contract management and to pay providers a market rate, ensuring stable and appropriate placements for children.

Provision of Leasehold (Buildings) Insurance

The committee agreed to award the leasehold buildings insurance contract to Insurer A for a period of three years, with a provision to extend for a further two years, subject to a 30-day statutory consultation with leaseholders. This decision follows a procurement exercise undertaken between September and November 2023, as the existing contract was due to expire on 31 March 2024.

Jamie Whitehouse, Acting Head of Insurance, explained that due to market uncertainty and increased premiums, this was a challenging time to procure insurance. The Council, as the freeholder, is legally required to provide buildings insurance for leasehold properties, with the premium being recharged to leaseholders. The procurement process received two bids, with only one viable option from an established insurance provider, which is the incumbent insurer. The premium cost has increased by approximately 16.5%.

Members raised concerns about the rising costs and the potential for self-insurance. However, it was emphasised that self-insurance would present unmanageable levels of uncertainty and financial risk for the Council, particularly in the event of a major incident. The limited insurance market meant that hybrid insurance options, including catastrophic cover, were not viable. It was confirmed that the insurance premium is recharged to leaseholders and that the Council procures separate policies for its own properties and those of leaseholders. While social value was a consideration, it was acknowledged as being difficult to achieve for this type of contract, though the Acting Head of Insurance undertook to raise this at the contract implementation meeting. The proposed annual premium represents an average increase of approximately £92 per annum per dwelling.