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RESOLVED:
 
1. 
To agree a Contract Variation of £2.5m excluding
VAT for the Hackney and City Integrated Drug and Alcohol Service
(existing value £29m) covering financial year 2025/26 - this
grant funding has been confirmed, and will be awarded upon approval
of this report.
2. 
To agree a delegation of authority to the Director of
Public Health to award 2026/27 funding up to the value of
£2.5m for financial year 2026/27, pending confirmation of
grant funding by central government. The revised maximum potential
contract value including variation will be £34m.
 
 
Reason(s) For
Decision
 
Background and details of the proposed
variation
This report is presented to the Cabinet
Procurement and Insourcing Committee to approve a contract
variation of £5,000,000 for the delivery of community drug
and alcohol treatment, covering a potential £2.5million
additional spend with the core treatment service in each of the
financial years 2025/26 and 2026/27.
 
Since 2021 LBH has received grant funding from
Central Government to help reduce harms related to drug and alcohol
use.
 
This funding has been used to deliver new
pieces of work, including commissioning bespoke services, as well
as to help enhance the core treatment service currently delivered
by Turning Point.
 
The funding has delivered strong outcomes in
areas such as the number of people in treatment, and the proportion
of people leaving prison continuing to receive support
uninterrupted.
 
In December 2024 LBH were informed that there
would be at least a one year
continuation of grant funding to continue enhanced delivery. We
have also been advised that a multi-year determination is to be
made in March 2025, which will likely cover another two financial
years.
 
In July 2023 CPIC approved a contract
variation with Turning Point allowing them to deliver additional
services with grant funding. This variation expired on March 31st
2025.
 
In December 2024 a contract extension of 18
months was agreed with Turning Point, bringing the current
contract’s end date to March 31st 2027.
 
Therefore, in order to continue providing  these
additional services until the end of the contract, a further
contract variation is required. This variation allows for
additional spend in 2025/26, with the potential for continuation in
2026/27. 
 
In mid 2025 we
will commence a programme to review current provision and undertake
design work to  ensure a
sufficient amount of time for full re-procurement and
mobilisation.
 
Overview of
Available Grant Funding for Reducing Drug and Alcohol Harms 2025/26
to 2027/28
 
The Supplementary Substance Misuse, Treatment
and Recovery Grant (SSMTR) was initially given to LBH in FY 2023/24
following two successful years of enhanced funding primarily
focussed on drug use and the criminal justice sector (project
ADDER).
 
SSMTR further increased the scope of earlier
funding streams to aid increases in treatment and support for drug
and alcohol users, as well as to help improve outcomes.
 
The intention of the funding was to support
Central Government in achieving the aims of the 2021 national drug
strategy.
 
SSMTR was continued in 2024/25, increasing the
funding given in 2023/24. There were no further announcements
regarding continuation beyond 2024/25 until November 2024,
following the general election and change in ministerial oversight
of the funding and strategy.
 
In November 2024 the Office of Health
Improvement and Disparities (OHID) wrote to LBH to inform them of a
Department of Health and Social Care (DHSC) decision to retain the
National SSMTR envelope following the announcement of the national
budget in late October.
 
The Rough Sleeping Drug and Alcohol Grant
(RSDATG) has been received by LBH since 2021. Its intention is to
help support individuals facing homelessness get better access to
substance use services.
 
In November 2024 LBH was informed that RSDATG
would be integrated into the SSMTR grant for 2025/26 and beyond,
with a reduction in the overall RSDATG envelope.
 
On 18th December 2024 LBH were informed that
the total overall grant envelope for 2025/26 would be
£4,099,161. The grant would consolidate SSMTR and RSDATG into
a single grant - the Drug and Alcohol Treatment Grant (DATRIG).
This total is slightly less than 2024/25.
 
Grant response and
continuation of core service expansion
 
In response to the confirmation of grant
continuation, the City and HackneyPublic Health Team engaged with the
Combating Drugs Partnership (CDP) through working groups, the
strategy group and individual partner meetings to set priorities
and develop a spending plan.
Our plans for 2025/26 focus on continuing
initiatives that were effective, and reallocating resources from
areas that were less impactful.  The
majority of previously delivered initiatives are to be continued,
including:
· 
Increase in Local Authority staff focussed on substance use
· 
Use of small, local, organisations to help provide cultural
competency to service delivery
· 
Increased capacity in core treatment service, including both staff
and pharmacological capacity.
Funding will be released by reducing or
discontinuing spend in the following areas:
· 
Restructuring employability services for people who use drugs
· 
Not filling a vacant post in the Public Health substance use
team
· 
Reallocating resources from a rough sleeping outreach team focused
on mental health, where outputs were suboptimal, towards improved
integration of mental health support across the system
 
Overview of
additional funding for core service
 
Appendix 3 shows the planned additional items
funded for the core treatment service in 2025/26 and potentially
2026/27.
 
The plan in Appendix 3 accommodates a
continuation of many workstreams and
resources to establish some new interventions.
 
The spending plan has been provisionally
agreed by OHID as part of the submission process to receive the
funding. Once confirmed, spend will be monitored routinely by OHID.
A recent audit of our internal governance indicated that the
monitoring systems are sound (Appendix 4).
 
A significant contingency allocation will
allow us to respond to new risks or opportunities without needing
to draw on the core public health budget should the need
arise. This will be reviewed throughout
the year in partnership with OHID to ensure that there is no
underspend by the end of each financial year.
 
Project Progress
 
· 
Developments since the Business Case approval
· 
Grant funding has been unpredictable for a number of years.
· 
LBH was only informed of grant funding for 2025/26 on 18/12/2024.
At time of writing this has still not been ministerially confirmed.
· 
In order to ensure that we can deliver services to vulnerable
residents using this funding we need to vary the current contract
for our core treatment provider.
· 
An option within the contract to extend the existing arrangements
for Turning Point’s  core services was taken  to extend till March 2027.
· 
As there is an indication that there will be further funding in
2026/27, it is necessary to preemptively vary the contract for additional
services in order to continue delivery into the final financial
year of the current service contract. These services will only be
delivered in 26/27 if grant funding is confirmed.
 
Alternative Options
Considered and Rejected
 
The table below lists the alternative options
to the suggested contract variation:
 

Alternative
Options

Risks

Reasons for
Rejecting

Complete a full procurement process for the
grant funded elements of delivery

The procurement process would take a minimum
of 6 months, with a likely further 6 months period for a new provider to begin delivery.
In addition there would be duplications
of cost due to the need for new management structures, as well as
risks to patients due to multiple providers delivering on separate
systems.
 

Time required does
not match timeframe for delivery against aims of grant.
 
Risks to
patients.
 
Cost
duplications

Insourcing

Insourcing would not be possible due to the
complexity of delivering the adult treatment service. Clinical
structures would need to be created, new management systems would
need to be formed and different data systems would need to be
procured. This is not possible within this timeframe.
 

LBH does not have
the systems in place to deliver complex medical services. Costs and
timeframes to develop these would result in non-delivery of
service. Additionally the challenges arising from two providers
would increase patient risk.

Do nothing, and do not accept the grant
funding

National drug related deaths continue to
increase, particularly due to the increasing presence of synthetic
opioids such as nitazines and fentanyl.
The treatment service is underfunded in relation to these
increasing risks should it utilise public health grant funding
alone, both due to previous cuts to service and the increased costs
for staffing and pharmacological delivery. To not invest further
with additional grant funding is likely to result in an inability
to respond to increasing risks and drug related deaths.

Significant
likelihood of inability to respond effectively to increases in drug
related deaths and harms related to drug use.