The Overview & Scrutiny Committee of Tower Hamlets Council met on Tuesday 16 October 2018 to discuss two call-ins from Cabinet decisions. The committee voted to refer the decision on the phased closure of three local authority day nurseries back to the Mayor for reconsideration. They also voted to refer the decision on the future management of the Integrated Community Equipment Service back to the Mayor for reconsideration.

Phased Closure of Local Authority Day Nurseries

The committee discussed the Cabinet's decision on 26 September 2018 to implement a phased closure of three local authority day nurseries: Mary Sambok, John Smith, and Overland. The call-in proposed that a fair public consultation should include a comprehensive set of options beyond closure and that the committee should consider whether the executive decision was contrary to the Council's policy framework or budget.

Arguments for Referring Back:

• Concerns were raised about the adequacy and fairness of the public consultation process, with some councillors suggesting it was rushed and lacked sufficient options.
• Questions were raised about the accuracy of figures used in the consultation and the process for addressing concerns raised by unions.
• The decision-making process was criticised for being too swift and potentially influenced by budgetary considerations rather than the merits of the service.
• There were arguments that the Council had not sufficiently explored alternative options to closure, such as those implemented by Salford Council, which included publishing budgets and engaging with staff ideas.
• Concerns were voiced about the impact on vulnerable and disabled children, particularly those with hearing impairments, and the potential loss of specialist services.
• The decision to close the nurseries was seen by some as a re-running of a previous attempt to close nurseries in 2014, suggesting a predetermined outcome.
• The consultation was described as the worst consultation seen by some, drawing parallels to a previous consultation that was struck down by the Supreme Court.
• The potential for the Council to raise funds through other means, such as council tax or fees, rather than solely relying on savings from nursery closures, was highlighted.

Arguments Against Referring Back (or for Affirming the Decision):

• Councillor Danny Hassell, Cabinet Member for Children's Services, stated that the decision was not taken lightly and was a result of unprecedented cuts in government funding, requiring £1 million in savings to keep the provision open.
• He argued that there were six outstanding nursery schools in the borough with places at risk if they couldn't fill them, and other providers with vacancies.
• Councillor Hassell pointed out that local authority day nurseries are rare, and other authorities like Salford and Birmingham have consulted on closure due to the model being unviable.
• He stated that even at full capacity, the provision would only meet the needs of around 100 children, while the council has 22,000 under-fives.
• The average cost of a placement in local authority day nurseries was cited as £11,000 per year, three times the cost of other provision.
• Regarding children with special educational needs, it was argued that only a small number of those with hearing impairments or Education and Health Care Plans (EHCPs) attended local authority day nurseries, and that specialist support services would continue regardless of where children are placed.
• The consultation period was described as eight weeks, which is longer than the statutory 28 days, with four public meetings attended by councillors and the Mayor.
• Claims made by Unison regarding pressure on staff were described as unsubstantiated rumours.
• It was argued that transferring staff to a voluntary or private organisation could lead to a loss of terms and conditions and redundancy payments, whereas closure preserves these entitlements.
• The Schools Forum decided not to use school funding to subsidise childcare for a small number of families.

Decision:

The committee voted 10 to 1 to refer the decision on the phased closure of the three local authority day nurseries back to the Mayor for reconsideration. The committee also requested that if the matter is not referred to full council, a formal note of the reasons for referring it back to the Mayor should be provided.

Future Management of the Integrated Community Equipment Service

The committee discussed the Cabinet's decision on 26 September 2018 to award a contract to Medequip for the Community Equipment Service. The call-in proposed that the Mayor should withdraw the decision to outsource the service, instruct officers to draft a business plan to improve the service and secure better value for money, initiate discussions with the local NHS regarding funding, and publish details of the budget and consultant's report.

Arguments for Referring Back:

• Concerns were raised that the decision to outsource was presented as an alternative to joining a consortium, but the report to Cabinet and Council in 2013 indicated joining a consortium with an outsourced provider, Medequip.
• It was argued that outsourcing should only be considered when there is no alternative and that the in-house service had not been given sufficient opportunity to improve.
• The Labour local government and trade union principles were cited, suggesting that in-house services should be given every opportunity to make improvements before resorting to costly outsourcing.
• Doubts were expressed about the ability to guarantee quality after outsourcing, referencing the experience with adult services and the privatisation of the home care service.
• The decision to sell the Yoast Street premises for a capital receipt of £900,000 was seen as potentially influencing the decision to outsource, rather than being based on the merits of the service itself.
• Concerns were raised about the objectivity of the specialist consultant engaged to conduct the options appraisal, suggesting they may have had a vested interest in promoting outsourcing due to their previous involvement in establishing the London Community Equipment Consortium framework.
• There was a desire for more information on the quality of Medequip's service in other boroughs and for a clearer understanding of the investment required to improve the in-house service to an excellent standard.
• Questions were raised about why innovative options, such as social enterprises, were not considered.

Arguments Against Referring Back (or for Affirming the Decision):

• Councillor David Jones, Cabinet Member for Adult Wellbeing, stated that the decision was not taken lightly and that the service had been discussed for a long time.
• An independent report by the Institute of Public Care in 2016 recommended improvements in quality, efficiency, and effectiveness, indicating the service was not up to speed.
• While the service had improved, officers described it as adequate rather than excellent, and the Council aims for an excellent service for its residents.
• The Labour local government trade union principles were acknowledged, but it was emphasised that these are subject to the Council's duty to achieve best value.
• The specialist consultant's report, available in appendix two of the report, looked at all options and narrowed them down to three: in-house, joining Newham, and using Medequip. Newham withdrew, leaving the in-house and Medequip options.
• Officers had thoroughly investigated keeping the service in-house.
• Medequip is part of a consortium of London councils, and Tower Hamlets would join the management board, which meets monthly, allowing for diligent monitoring.
• It was stated that savings of £179,000 were achieved in 2017-18, with £88,000 slipped into 2018-19, meaning the savings had been found.
• The landlord had approached the Council regarding the Yoast Street premises, and the building was not considered fit for purpose. Moving and making it fit would cost approximately £340,000, with a further investment in IT and equipment.
• Retaining the in-house service would require considerable investment to achieve an excellent standard and meet increasing demands.
• The landlord indicated a likely rent rise of £35,000-£40,000 if the Council stayed in the Yoast Street premises.

Decision:

The committee voted to refer the decision on the future management of the Integrated Community Equipment Service back to the Mayor for reconsideration.