Decision Maker: Cabinet Procurement and Insourcing Committee

Outcome: Awaiting Implementation

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: January 5, 2026

Purpose: To endorse contract award report and recommendations

Content: RESOLVED: To agree to award a contract to Provider A to deliver residential care and support for children looked after, aged 11-17 for a period of five (5) years with an option to extend for a further two (2) years (5+1+1).   Reasons For Decision    This report provides the Cabinet Procurement and Insourcing Committee with the outcome of the procurement process of 2 new children’s homes in Hackney, operating out of 2 Council owned properties, for children looked after. Following the approval of the contract award, Officers will proceed with the implementation of the new contract to commence by 16th January 2026. Pending Ofsted registration, the homes should be ready for children to move into by September 2026.   By commissioning a partner provider we are able to enhance the quality of experience and care for children looked after. This will be done by minimising disruption in their lives by keeping them connected to their communities whilst delivering the savings highlighted. This approach allows the Council to directly influence the quality of care experienced by those children.   The partner provider will work with the Children’s Integrated Commissioning Team and Hackney’s Children & Families Service Management Team (predominantly Corporate Parenting) to ensure that the service mobilises, completes Ofsted registration and provides a high quality service for all children looked after.   The successful provider is committed to reducing their environmental impact. Their robust sustainability policy details environmental management standards and procedures to minimise environmental impact at both organisational and service delivery levels. This is led with the help of their sustainability manager who is responsible for embedding their strategic aims at all levels of their organisation. To ensure sustainability principles are implemented in the children’s homes, the sustainability manager will produce a sustainability tool kit which will include accessible information and resources for children and staff on the practical steps that the homes can take to reduce waste and improve energy efficiency. In July 2025, the provider published their first Carbon Reduction Plan, which outlines their commitment to reach Net Zero carbon emissions by 2050. Although this timetable is not quite as ambitious as the Council’s own plans, which aim to achieve net zero by 2040, it will deliver meaningful carbon reductions over the contract period and aligns with the shared ambition to create a more sustainable and resilient borough for future generations.   The successful provider is committed to paying at least the London Living Wage (LLW) to all staff working on this contract, rewarding staff fairly and paying salaries that reflect the local market forces. They are also committed to creating job opportunities that will pay at least the LLW. The social value commitments will form part of the KPIs for the contract and will be monitored as part of the contract management process by the lead commissioners in conjunction with the social value team.   There are no TUPE concerns with this contract as it is   Alternatives options considered and rejected   This report provides Cabinet Procurement and Insourcing Committee with the outcome of the procurement of two new children’s homes in Hackney that will be delivered by a partner provider.   Three delivery options were considered at the Business Case stage:   Option 1 – Do Nothing (Considered and Rejected) Under this option, the Council would continue to commission residential placements through ad hoc spot purchasing arrangements. This model provides flexibility but lacks control over quality and cost, offers minimal influence over placement availability, and perpetuates the issue of children being placed outside the borough. It does not address Hackney’s sufficiency challenges or the strategic ambition to improve local provision. This option was therefore rejected.   Option 2 – Insource (Considered and deemed not viable at this stage)   This option involved the Council directly operating and staffing the homes. While this would offer maximum control and integration with Hackney’s practice model, it presents significant financial, regulatory and operational risks. Hackney currently lacks the internal infrastructure, workforce and regulatory experience required to run Ofsted-registered homes. Financial modelling indicated higher overall costs (approx. £18.8m whole-life cost). The reputational and compliance risks of an unsatisfactory Ofsted outcome were also considered significant. This option was therefore not recommended at this time, though it remains a medium to long-term ambition.   A comprehensive Insourcing/Outsourcing Options Appraisal was completed and is available as an appendix to the Business Case report (CE S491) that was previously agreed by CPIC in July 2025.   Option 3 – Commission a Partner Provider (Chosen Option)   This option enables Hackney to commission a specialist provider with the skills, workforce and experience to operate the homes to the required standards while the Council retains ownership of the buildings. The Council can maintain close oversight through contract management, influence service quality, and achieve better value for money. The partner provider will be required to deliver systemic, trauma-informed and anti-racist care aligned with Hackney’s STAR Practice Model. This option delivers both improved outcomes for children and financial efficiency and was approved as the preferred route.   The preferred option represents best value for money, aligns with the Best Value duty under the Local Government Act 1999, and enables the Council to meet its statutory sufficiency duty efficiently.