Report attached.

Exempt Appendix B to this Report is not available for public inspection as they contain or relate to exempt information within the meaning of Paragraphs 3 and 5 of Schedule 12A to the Local Government Act 1972.

Report Title: DFE Capital Funding for Children's Homes

Presented by: Councillor Oscar Ford (Cabinet Member for Children and Young People)

Cabinet:

1.         Accepted the £1.03m capital grant from the DFE and enter into the grant agreement with DfE.

2.         Committed  £0.515m in capital funding to the total capital requirement of £2.06m to purchase and develop the homes.

3.         Delegated authority to the Strategic Director for Place to select and agree to the purchase of the two homes on behalf of the Council.

4.         Agreed the procurement of a care provider via an open tendering process.

5.         Agreed the waiver of the standard weightings of 70% price and 30% quality for the procurement of the care provider to 40% price and 60% quality (including social value) for the reasons set out below.

6.         Delegated authority to the Lead Member of Children’s Services to make the decision to award the care contract to the successful bidder following the competitive tender process.

Report Title: DFE Capital Funding for Children's Homes

Presented by: Councillor Oscar Ford (Cabinet Member for Children and Young People)

Summary:

In February 2025 the Council made a formal bid to the Department for Education (DFE) for a capital grant to create two children’s homes. The Council was notified of its successful bid at the end of the summer 2025.

Havering’s proposal is to purchase and adapt two family homes in the borough. The intention is to purchase a five or six bedroomed property and a four bedroomed property with the plan to provide a four bed and a two bed children’s home.

The grant application identified three capital financial partners and the proportion of their capital commitment;

DFE- £1.03m (50%)

LBH- £0.515m (25%) NEL ICB- £0.515m (25%)

The DFE wants to support councils to create new local authority owned children’s homes for three purposes:

•           To provide an alternative care pathway for children who may require in-patient mental health care.

•           To provide a step-down from in-patient mental health care to prevent delays of discharge from hospital; and

•           To prevent children from being placed in high-cost unregulated care homes.

Havering’s application identified cohorts of children this service would be appropriate for. At the point of making the application Havering had experienced four young people being discharged from in-patient hospital treatment, their average weekly care costs in children’s homes were £16,000 each, which equates to an annual cost of £3.33m. All four of these children needed specialist provision which was only available outside of Havering. The transition from hospital to out of authority care placements also ceased the involvement of NELFT’s CAMHS service.

The application estimated that the creation of Havering owned children’s homes would reduce the care costs of these four young people. The estimated annual cost avoidance of £1m is based upon an estimated targeted unit cost per child per week which will be published when the contract for the care provider is tendered for.

Since the application was submitted the complexity of some of the children in care has resulted in the Council needing to use services that could not meet the needs of the young people. Four young people were placed with OFSTED Registered Supported Accommodation providers, but they required registered children’s homes rather than support providers.

Their packages of support included 2:1 or 3:1 staffing ratios and at times the use of Deprivation of Liberty Orders. The average cost of these children’s packages was £10,993 per week, and they were also all placed outside of Havering.

Therefore, the Council has greater evidence that by providing a local registered children’s home service more children can be cared for within the borough, close to their families and friends, will be able to maintain their schooling and continue to access mental health services provided by NELFT’s CAMHS service. The Council will also be able to reduce expenditure and place fewer children in unsuitable provision.

The new homes will also enable the planning to return children from high cost out of borough care provision back into their local communities, close to family and friends, as well as support services who know them. This transition planning will be managed through the Havering Access to Resources Panel (HARP). This is chaired by the Assistant Director for Safeguarding, and ensures that resources are managed appropriately, and offer best value.

Cabinet:

1.         Accepted the £1.03m capital grant from the DFE and enter into the grant agreement with DfE.

2.         Committed  £0.515m in capital funding to the total capital requirement of £2.06m to purchase and develop the homes.

3.         Delegated authority to the Strategic Director for Place to select and agree to the purchase of the two homes on behalf of the Council.

4.         Agreed the procurement of a care provider via an open tendering process.

5.         Agreed the waiver of the standard weightings of 70% price and 30% quality for the procurement of the care provider to 40% price and 60% quality (including social value) for the reasons set out below.

6.         Delegated authority to the Lead Member of Children’s Services to make the decision to award the care contract to the successful bidder following the competitive tender process.