Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: October 15, 2025

Purpose: East London Apartments is a 31-bed single homeless hostel at risk of closure due to the uncertainty of central government grant funding beyond 31st March 2026. While it is expected that the grant will be extended, notification will be made too late in the year for action to be taken. This report explores options to ensure the short to medium term sustainability of the service and proposes a competitive procurement take place before 1st April 2026.  

Content: DECISION   1.     Authorises the Corporate Director of Health and Adult Social Care to start the recommissioning and tender process with the award of the new three-year contract for East London Apartments starting on 1st April 2026 in accordance with the published evaluation criteria and in consultation with the Mayor. 

Reasons for the decision: The current contract for East London Apartments is expiring on 31st March 2026. The service comprises a 31-bed specialist supported housing accommodation for vulnerable Tower Hamlets residents with a history of rough sleeping and complex needs.   This service is entirely grant funded by central government with the current grant funding ending on 31st March 2026. Due to the changes to Local Government funding, notification of the funding is expected to be received in December 2025 post the Governments spending review.   Should there be notification from central government of further grant funding in December 2025, due to the current contract ending on 31st March 2026, there will not be sufficient time to competitively procure the service and have a new contract awarded for 1st April 2026.   To ensure the Council can competitively procure the Service this process needs to start now whilst the funding amount is unknown. This is to prevent the decommissioning of the service which would leave the affected 31 residents homeless and requiring expensive nightly paid temporary accommodation (probably with an increased uplift to ensure this cohort are housed) to prevent their homelessness in accordance with statute. This would increase the in-year homelessness overspend by £442,000 and £761,000 for 2026/27.   Commissioning activity will begin whilst we are awaiting the funding settlement and if the funding is not forthcoming (highly unlikely) the service will be brought to an end. 

Alternative options considered: To agree a 12-month Direct Award sought via Cabinet (likely in January/February 2026). If this option is agreed it should be noted that the scheme provider will serve notice on current service users following the decision being made public and will pause placements until a new contract is signed (as they did last year). This will mean that the Homelessness service will be unable to place clients in the scheme which will add to the requirement of expensive nightly paid temporary accommodation during the 2025/26 financial year and increasing the overspend. This option is not recommended by officers as the Council will need to pick up additional temporary accommodation costs until the new contract is confirmed. It was also the view of the Mayor in MAB in February 2025 that further Direct Awards would not be agreed for this service