Issue details

Proposed decision: 

To approve additional funding of £16m to enable the extension of the SEND External Tuition Modified Dynamic Purchasing System contract to 31 August 2028.

Reason for the decision

The SEND External Tuition - Modified Dynamic Purchasing System (MDPS), jointly commissioned with Medway Council, was established on 1 September 2023 to secure Tuition for children and young people unable to attend school, including those with Education, Health and Care Plans (EHCPs). The contract was awarded for three years, with two optional one-year extensions to 31 August 2028.

The contract has performed well; however, due to significant increases in both demand and cost, expenditure is now forecast to reach its authorised projected spend of £15m by the end of the initial term in August 2026, rather than August 2028 as originally anticipated. Extending the MDPS will ensure continuity of provision, avoid unnecessary procurement costs, and allow a new commissioning approach to be aligned with Local Government Reorganisation (LGR). This approach will also enable the SEND  Service to take full effect by embedding Tuition commissioning within the Quality Assurance teams, providing greater oversight, consistency, and safeguarding standards. In addition, a thematic review of children and young people not in school will help identify pathways for reintegration into education and preparation for adulthood. To support these service improvements, a realignment of Tuition oversight has been proposed within the Quality Assurance teams, which will facilitate more consistent quality assurance and governance across all Tuition arrangements. As the extension relates to a contract of significant value and strategic importance, a Key Decision is required.

It is recommended that the contract be extended for its full term to August 2028, and that a new procurement is undertaken.

Background

The MDPS provides a compliant and flexible mechanism for commissioning and purchasing Tuition provision for eligible children. It does not guarantee any work or spend to providers and has multiple providers for the Council to source services from, which allows KCC to secure provision in line with its statutory duties.

The original Key Decision, taken in October 2022, assumed spend to remain constant and authorisation was granted at £9m for the initial contract term and £15m  across the full five-year period. Spend has reached £8m in the first two years and is forecast to reach the full £15m by August 2026. Annual spend during the contract term reflects increase in demand and provider costs.

The Children, Young People and Education Directorate Management Team reviewed the proposal on 30 July 2025 and recommended enacting the full extensions, recognising strong performance, effective contract management, and positive outcomes for children.

Options (other options considered but discarded)

Option 2 – Re-procure immediately

Re-procurement would test the market, however as there have been no significant new entrants to the market since 2023, and providers are able to join the framework at regular intervals, the benefits would be limited. A new procurement would require considerable resource, duplicate costs, and risk disruption to provision. Any new contract would have to be revisited following LGR, creating instability. This was discounted as the work required to understand the changes in demand of Tuition services needs a stable provider market to fully ascertain patterns and trends.

With the emerging Strategic Statement, Reforming Kent 2025 to 2028, this meets draft Aim 3: Supporting Residents that need help, Point 6:

Improve processes and outcomes for our SEND services while tackling the unsustainable growth in demand: We will continue to improve our SEND service, ensuring that those families and young people who are eligible for SEND support receive it in a timely, efficient, and professional manner. At the same time we must also reduce the demands placed on the SEND budget given the existential pressure it places on the wider KCC budget, including increasingly the adult social care budget, as children with SEND need transition to adulthood. This demand is driven by a national crisis in SEND demand, which must be urgently addressed by the government, given the systemic challenges it is placing not just on children's services budgets, but on those of the NHS, schools and home to school transport as well.

Financial Implications

•           Original Projected contracted spend: £15m across five years (initial term plus extensions).

•           Spend to date: £8m  in two years, with full utilisation of £15m forecast by August  2026. Annual spend reflects the increase in demand and costs.

•           Spend for extension period September 2026 to August 2028, estimated £16m  based on current spend with no mitigating action or further rises in demand.

•           Funding source: External Tuition is funded from the High Needs Block of the Dedicated Schools Grant(DSG), a ring-fenced grant provided by Department of Education. Whilst this is not a direct cost to the General Fund. The Council is currently overspending on its High Needs Block by approximately £55m-£60m per year. The Council is part of Safety Valve Programme, a DfE initiative to support Local Authorities with the highest deficits, of which the council has agreed to contribute a total of £82m between 2022-23 and 2027-28 to help reduce the accumulated deficit, alongside an extra £140m from the DfE. The DfE funding is contingent on the development of a plan to achieve value for money with the existing SEN regulatory framework and to aim to reach an in-year breakeven position. Where the continued use of external tuition is required, it is imperative his is commissioned on a cost effective basis. The use of the MDPS is expected to support this aim.

•           Risks: Continued growth in demand could place pressure on the High Needs Block and the DSG recovery plan. Spot-purchasing outside of the MDPS would increase costs and reduce oversight.

•           The extension falls within the procurement regulations, as the option was clearly advertised at the outset.

Legal Implications  

Kent County Council has statutory duties under:

•           Education Act 1996 (Section 19)  – to provide suitable education for children unable to attend school.

•           Children and Families Act 2014 (Sections 42 and 61)  – to secure the provision in EHCPs up to age 25 and to arrange provision outside school where attendance is inappropriate.

•           SEND Regulations 2014 – specifically The Special Educational Needs and Disability Regulations 2014 (Regulation 51) .

•           SEND Code of Practice (2015)  – statutory guidance under Section 77

•           Equality Act 2010 (Section 20)  – to make reasonable adjustments for disabled pupils.

The MDPS provides a lawful route to meet these duties. As the extensions were included in the original procurement, they are compliant with procurement law and KCC’s Spending the Council’s Money rules.