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Proposed decision:
a) DIRECTLY AWARD a new contract, under the same terms and conditions to Clearsprings Ready Homes from 1 April 2023 to 30 September 2023 (potentially one year to cover 18+ placements from 1 October 2023 for smoother mobilisation) for Shared Accommodation services.
b) DIRECTLY AWARD a new contract under the same terms and conditions to Look Ahead Care and Support, Sanctuary Supported Living and YMCA Thames Gateway from 1 April 2023 to 30 September 2023 (potentially one year to cover 18+ placements from 1 October 2023 for smoother transition) for the Young Person’s Supported Accommodation and Floating Support (YPSAFS) services.
c) AGREE to procure new Supported Accommodation Services effective 1 October 2023 for a minimum of four years with potential further extensions of up to four years.
Background:
The Young Person’s Supported Accommodation and Floating Support (YPSAFS) and Shared Accommodation contracts were due to expire on 30 September 2022 and 31 October 2022, respectively. Following an agreement of a Direct Award, the contracts now end on 31 March 2023. These contracts require recommissioning to accommodate KCC children and young people from the age of 16 to meet KCC’s Sufficiency Strategy 2022-2027 requirements.
In December 2021, Ofsted announced that all accommodation for 16/17-year-old children would need to be regulated in a previously unregulated market which has significantly impacted the proposed direction of travel. The announcement derailed a years-worth of commissioning activity. As of July 2022, Ofsted have yet to publish the final details on the new regulation. It is anticipated that the requirements will not be published by Ofsted until late December 2022.
It remains unclear when new entrants must be in regulated services, assumed 1 April 2023. However, it was initially indicated that from 1 April 2022, providers delivering services not previously subject to regulation must take steps to become regulated providers by Ofsted. There has since been further communication where Ofsted will begin registering providers from April 2023 ahead of the new national standards becoming mandatory for all providers from 1 October 2023, at which point all providers will need to be registered with the first full inspections expected to begin from April 2024.
Despite the uncertainty of the new regulations, Strategic Commissioning have developed a revised structured Pathway to Independence progressing through services until the young person is ready to move on. This includes a new Community Outreach Support Service, that we anticipate will ensure compliance with the new regulations. The contracts will provide accommodation and support to all statutory cohorts and children who are at risk of becoming homeless (16/17-year-olds).
Changes in regulation provides additional complexity in recommissioning services that have previously not been subject to regulation. In the absence of clear guidance from Ofsted, developing the specification within the timescales and the potential of mobilising a new provider could be challenging and has many associated risks.
KCC has a statutory responsibility to safeguard and promote the welfare of Kent Children in Care and ensure best value for money it spends on behalf of the Kent population. It also has a statutory responsibility to ensure there is sufficient safe accommodation for Children in Care.
Risks:
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Challenge/ Risk |
Impact |
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Insufficient clarity of what the regulations may entail. |
Providers costing in the risk of regulation expecting it to be as robust as regulations for residential and fostering services.
Inaccurate specification due to not knowing the regulation requirements resulting in the contract not being fit for purpose. |
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Current providers may not wish to become regulated. |
The properties accommodating approx. 800 of Kents young people/young adults may not be accessed by a new provider leaving a longer mobilisation period.
Uncertainty that the market has enough regulated services to meet the Councils needs and demand. Uncertainty of the qualified workforce required including the potential cost impact of staffing. |
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Psychological, social, and academic impact on children and young people following multiple placement moves. |
The uncertainty of the Ofsted regulation requirements could lead to having to go out to the market for a second time due to providers not becoming regulated. Therefore, children and young people having to move placement potentially multiple times.
If the incumbent providers are unsuccessful, every existing child and young person will need to move into a spot purchased contract, and then subsequent moves into the new providers. |
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Cost of multiple procurement exercises. |
Challenging timescales to achieve a successful procurement if going out to tender in September 2022. Uncertainly of the Ofsted regulation requirements could lead to having to go out to the market for a second time. |
Options considered:
The risks (highlighted above) have informed the commissioning options available with the greatest being that, without the detailed guidance, we have no certainty on what we are buying. The preferred option that would allow services to continue, to the point of known regulation requirements, would be Option 3, to directly award six-month contracts under the same terms and conditions to the incumbent providers. This would allow sufficient time to specify requirements, run a compliant procurement exercise, and ensure continuity of service for our children and young people.
· Option 1: Run a tender process for the new services to commence in April 2023 for all new placements. Either directly award a contract or move to spot purchased arrangements for up to one year to the incumbent providers for existing placements. This will provide a managed mobilisation period for the successful providers to become registered. Existing placements would then transition over once they are registered – If the communication from Ofsted that states providers must be registered by Autumn 2023 stands, then technically there could be a number of unlawful placements from Autumn 2023 to April 2024 if the successful providers of the new services fail in their registration, leading to another procurement exercise to be carried out and any unlawful placements having to move to a higher cost registered spot purchased service.
· Option 2: Directly Award one-year contracts from 1 April 2023 to the incumbent providers and run a tender process for the new Supported Accommodation Service to commence from 1 October 2023. Ofsted are currently indicating that guidance will be issued by December 2022. KCC will be clearer on what it is looking to buy, and Providers will be clearer on their requirements. Providers will be able to understand what being Registered and Regulated will mean and submit better informed costed bids. KCC would prioritise transferring the existing 16/17-year-olds into the new contracted arrangements from 1 October 2023, with an understanding that there is a manageable plan for these young people by the time Providers are inspected in April 2024. The 18+ young people will be able to remain in contracted provision and either moved onto spot contracts or transitioned into the new services/better suited services for their needs post 18.
· Option 3: Directly Award six-month contracts from 1 April 2023 to the incumbent providers and run a tender process for the new Supported Accommodation Service to commence from 1 October 2023. This is the same for option 2 other than a potential to move all young people, either physically or onto spot contracts, depending on who is successful at tender.
Decision type: Key
Reason Key: Expenditure or savings of more than £1m;
Decision status: Recommendations Approved
Division affected: (All Division);
Notice of proposed decision first published: 15/08/2022
Anticipated restriction: Part exempt - View reasons
Decision due: Not before 13th Sep 2022 by Cabinet Member for Integrated Children's Services
Lead member: Cabinet Member for Integrated Children's Services
Lead director: Sarah Hammond
Department: Education & Young People's Services
Contact: Christy Holden, Head of Children's Commissioning Email: Christy.Holden@kent.gov.uk (03000 415356).
Consultees
The decision will be considered at the Children’s, Young People and Education Cabinet Committee on 13th September 2022.
Financial implications: The annual value of these contracts is approximately £6.7million combined. The Shared Accommodation service element is largely funded from the Home Office grant and is the largest area of spend at £4.2m. Some shared accommodation costs along with the YPSAFS contract is funded from the General Fund. The YPSAFS contract is £2.4-£2.8m per year dependent on the number of children in care placed in the service. Regardless of the Ofsted regulations being introduced, KCC would expect a significant increase in the weekly blended rates. This is due to accommodation costs drastically increasing since the original contracts were let in 2017/18 impacted by higher inflation, rising costs of living and housing stock availability. In addition, there has been no annual inflationary uplift in the term of the contracts. Once the new Ofsted Regulations are known, financial forecasting and requirement of needs will be significantly more accurate, which supports the proposal for a direct award. The Gover
Legal implications: The Council has a statutory duty to provide suitable and safe accommodation that has the right level of support for Children in Care (including UASC) in accordance with the Children’s Act 1989. The Council must provide Care Leavers (including former UASC) with support and financial support to assist in promoting their welfare, especially in relation to maintaining suitable accommodation and helping them to access education, training, and employment. Spending the Council’s Money requires procurement to be competitive. Directly awarding the contract could be considered a suitable route under Regulation 72 of the Public Contract Regulations 2015.
Equalities implications: Equalities implications: An Equality Impact Assessment (EqIA) was completed as part of the planned redesign and recommissioning of the Shared Accommodation and YPSAFS service. Directly awarding contracts would pose no immediate change to the service for those young people and therefore the risk of any adverse impact is limited. A full EqIA will be completed as part of the new full commissioning activity. Data Protection Implications: A Data Protection Impact Assessment (DPIA) for any recommissioned service will be implemented following contract award in 2023 if a direct award is agreed.