Councillor Shantanu Rajawat, Leader of the Council, approved additional capital funding and the award of a construction contract for a new residential children's home. This decision was made to address unforeseen contractor insolvency and ensure the timely completion of the project.

New Residential Children's Home: Approval of Additional Capital Funding and Contract Award

Councillor Shantanu Rajawat, Leader of the Council, approved an additional capital budget allocation of £900,000 to complete the remaining construction works at the New Residential Children's Home. He also approved the award of a construction contract to Devcon for £1,251,392 to finalise these works. This decision was necessary due to the unexpected insolvency of the original contractor in June 2026, which halted construction.

The project, initially approved by Cabinet in March 2024, aims to provide a new six-bed residential children's home to increase local placement sufficiency, reduce reliance on costly external placements, and improve outcomes for children and young people. The original capital budget was £2,896,000.

The insolvency of the appointed contractor led to a suspension of works and necessitated obtaining new quotes for completion. Due to rising material and labour costs, these quotes exceeded the remaining project budget. The additional £900,000 capital allocation will cover these increased costs, bringing the total capital investment to £3,796,000. Despite this increase, the projected payback period has risen from 3.4 years to 4.5 years, which remains within the five-year return period initially presented to Cabinet.

The report highlighted that if the additional funding were not approved, the development would remain incomplete, potentially leading to vandalism, unauthorised occupation, and general deterioration. This would incur increased security and maintenance costs, pose reputational risks, and delay the home's operational use, preventing children from receiving improved local care and the Council from realising financial benefits.

The procurement process for a new contractor involved considering a supplier who had tendered in the original process and was appointed to the Ealing Procurement Framework, as well as a mini-competition via the Procurement Partnerships Framework. A review by the Council's Quantity Surveyor identified Devcon as the most advantageous option, ensuring value for money.

Key risks identified included increased project costs due to extended consultant appointments and inflation, and potential delays in Ofsted registration. Mitigation measures include a £200,000 contingency within the funding request, ongoing deployment of recruited staff to existing homes for training, and proactive engagement with Ofsted to schedule inspections. The financial implications were reviewed, with the Chief Financial Officer noting that the delayed opening had caused a pressure of £1.1m in undelivered savings for 2026/27, which the proposed completion would help to contain. The decision was made under delegated authority by Councillor Shantanu Rajawat, Leader of the Council, and will be reported to the next Cabinet meeting.

The decision document can be found here. The public reports pack is available here, and the agenda frontsheet is available here.