E - 1

PAPER E

Purpose: For Decision




Committee EXECUTIVE

Date TUESDAY, 9 SEPTEMBER 2014

Title CONTRACTS FOR RESIDENTIAL CARE, RESIDENTIAL
CARE AND EDUCATION, AND INDEPENDENT
EDUCATION PROVISION FOR CHILDREN AND YOUNG
PEOPLE

Report of/to EXECUTIVE MEMBER FOR CHILDRENS SERVICES AND
EDUCATION



EXECUTIVE SUMMARY

1. This report concerns the procurement of a panel of providers, led by Hampshire County
Council (Hampshire), to deliver Residential Care, Residential Care and Education and
Independent Education provision for children and young people.

2. On the 3

J uly 2014, the Isle of Wight Councils Procurement Board approved a contract
waiver letting strategy report for the letting of new contracts from the proposed panel of
providers as referred to in 1 above. On 14 August 2014, the Procurement Board
considered a draft of this report for the September meeting of the Executive. This report has
been amended on the advice of Procurement Board.

3. This report requests the Executive to delegate agreement to award new contracts to
providers from the procured panel of providers to a senior officer (the Isle of Wight Area
Director of Childrens Services). The reason for the request to delegate this agreement is
one of the need to secure placements for vulnerable children at short notice. Agreement will
be in consultation with the Executive Member. The Area Director chairs the cross-council
multi-agency Resource Allocation Group that considers, decides and reviews all residential
placements. This agreement will give authority for any contract with a potential value in
excess of 100,000 to be sealed in accordance with the Councils Contract Standing
Orders.

4. The tendering process undertaken by Hampshire is at the stage of moderation and
decision-making and Hampshire expects to be in a position to award new contracts from
this new procured panel of providers from 1 October 2014. The agreement of the Executive
for the Council to enter into these contracts is required as their overall value throughout the
period of the panel is anticipated to exceed 1.5m. Any contract with an anticipated value
of 1.5m over its lifetime requires the agreement of the Executive.

E - 2

5. The outcome of the tender exercise will not be known until 1 October 2014 and with
Hampshire wishing to award any new contracts with a start date of 1 October, there is
insufficient time, once the identity of the providers for the panel is known, to seek the
relevant approval of the Executive prior to the start date of any new contracts. Any delay in
the start date of 1 October 2014 is likely to impact on anticipated savings on new contracts
which may not be secured therefore.

6. This new arrangement of using a panel of providers will secure more competitive prices
without compromising the quality of care or safety of Isle of Wight children and should
encourage more local on-Island provision. For any Isle of Wight children who need to live in
residential placements, more local provision will mean they can remain living locally. These
arrangements will help children, whose needs may only be met in residential placements, to
maintain links with their friends, family, school and local community. More local provision will
also enable children, who live currently in residential provision in other local authority areas,
to return to the Isle of Wight where and when it is most appropriate to meeting their needs
to do so.

BACKGROUND

7. Guidance on the implementation of section 22G of the Children Act 1989 requires local
authorities to take steps that secure, so far as reasonably practicable, sufficient
accommodation within the authoritys area. This accommodation should meet the needs of
children that the local authority are looking after, and whose circumstances are such that it
would be consistent with their welfare for them to be provided with accommodation that is in
the local authoritys area (the sufficiency duty). Securing accommodation which meets
needs therefore has implications for a number of aspects of service provision, for example,
the type of placement provision that might be needed. This includes residential care and
provision on the Isle of Wight. An example of best practice in securing sufficiency would be
that all children are placed in appropriate placements with access to the support services
they require in their local authority area, except where this is not consistent with their
welfare. There should be a full range of universal, targeted and specialist services that work
together to meet childrens needs in an integrated way in the local area. Where it is not
reasonably practicable for a child to be placed within his/her local authority area, there
should be mechanisms in place to widen the range of provision in neighbouring areas. This
includes the sub-region or region which is still within an accessible distance (i.e. based on
transport links and community boundaries), while still being able to provide the full range of
services required to meet identified needs. Services should be available in adequate
quantity to respond to children, including predicted demand for a range of needs, and
emergencies. In addition to meeting relevant national minimum standards, services should
be of high enough quality to secure the specific outcomes identified in the care plans of
looked after children.

8. If there are no providers on the panel that can meet the needs for a particular child or if
there is but they are too far away, suitable providers will be identified and placements spot
purchased. Again the decisions and reviews of these placements are overseen by the
resource allocation group.

E - 3


9. All placement providers (including private, voluntary and public sector providers) should be
linked into the wider network of services and work with these services to offer appropriate
support to deliver identified outcomes for looked after children. Universal services must
know when a child is looked after and have good links with the range of targeted and
specialist services which support him/her, including placement providers. The sufficiency
duty states that there should be mechanisms in place to ensure that professionals involved
in placement decisions have sufficient knowledge and information about the supply and
quality of placements and availability of all specialist, targeted and universal support
services within the local authority area. The local authority and Children Trust partners need
to collaborate with neighbouring Childrens Trusts to plan the market for services for looked
after children and commission in-regional or sub-regional arrangements. The Isle of Wight
Council has a sufficiency duty action plan. One of the key actions within the sufficiency duty
action plan is to commission a comprehensive and competitive range of residential
provision to meet the needs of children. This commissioning approach will improve the
performance management with which the Council holds providers to account for the quality
of their care and the outcomes for Isle of Wight children they are contracted to look after.

10. The Isle of Wight Council, like other local authorities, sometimes need to accommodate
children in residential placements to meet their needs and/or access SEN education from a
special school that has residential accommodation. These children have complex needs
that cannot be met by their families, foster carers or by local schools. The placements are
specialist and are often high cost. These types of placements are located throughout the
UK. The Isle of Wight has two privately run residential childrens homes, Island Choices and
Leeward Care (with a total of ten placements), a residential special school (St Catherines)
and the local authority run respite and residential accommodation for children with
disabilities, Beaulieu House which was rated good with outstanding features in their recent
Ofsted inspection.

11. The Isle of Wight Council has 29 children in residential accommodation. The Isle of Wight
Resource Allocation Group is chaired by the Area Director and oversees all decisions on
residential placements and monitors their quality of care and performance. This has led to
improvements and these are referenced in the self-assessment and will be evidence for the
forthcoming Ofsted inspection. The Isle of Wight Councils annual spend in 2013 to 2014 for
SEN placements was 1,069,799 and for Residential placements was 2,378,083. The total
annual spend for 2014 to 2015 is estimated to be in the region of 3,000,000. This proposal
is an opportunity to move from the historic spot-purchasing arrangements which has limited
opportunity to negotiate competitive rates, to a more proactive management of the market
by the Isle of Wight Council. This will improve the supply and quality of provision and
encourage local market development so that children from the Isle of Wight, if they need
residential placements, can be placed locally rather than out of authority. Furthermore,
securing better value through commissioning, the residential placement budget is likely to
contribute savings through new placements. The SEN placements will be funded from
Direct Schools Grant whereas the Residential placements are from the General Fund; any
savings accruing from the arrangement will have to be apportioned similarly to the extent
they are identifiable.

E - 4

12. The Mid Southern Authorities (MSA) is a collaboration of ten local authorities: Bracknell
Forest Council, Buckinghamshire County Council, Hampshire County Council, Isle of Wight
Council, Portsmouth City Council, Reading Borough Council, Slough Borough Council,
Southampton City Council, Surrey County Council and Wiltshire Council. The
commissioners from each local authority have been working up these proposals since the
beginning of 2013. Together, the current annual spend on placements across these local
authorities is 96 million. The MSA are working together to improve placement choice and
quality for the children and young people they look after. The MSAs plan to establish
arrangements for the provision of Residential Care, Residential Care and Education and
Independent Education provision for all new placements. The tender process is being
managed by Hampshire County Council.

13. The MSA will work with a number of providers who can demonstrate that they have the
ability to deliver quality services that improve outcomes for children and young people. The
MSA has a clear objective to keep children and young people as close to their area of origin
as possible. Research into the current level of need and provision has highlighted gaps in
availability of local placements able to meet specific needs. The MSA want to identify
providers who can:

Improve stability and reduce placement moves;
Offer children and young people the opportunity to maintain stable local networks
and contact with their families by providing care that is local to their homes, and is fit
for purpose;
Work in partnership with the MSA, partner agencies and other professionals to
ensure all available resources are used to achieve positive outcomes; and
Provide placements which offer the MSA good value for money and are flexible and
can meet the changing needs of children and young people.

14. The aims of the collaborative group are to enable a consistent approach to making referrals
and placements for SEN and Residential needs, to encourage the market to work towards a
consistent and transparent approach to pricing, whilst ensuring that the quality of
placements is maintained at the levels required by local authorities. Through ongoing
contract management, it is envisaged that efficiencies will be achieved by sharing
monitoring responsibilities, therefore reducing the resource burden to individual local
authorities. The use of clear and relevant key performance indicators will facilitate
consistency in the market and enable providers (and the local authorities) to benefit from
these efficiencies.

STRATEGIC CONTEXT

15. This proposal relates to the emerging priorities as set out in the Framework for Change
document, which Members agreed at Full Council in J uly 2013 which is to be used as a
basis for developing the Councils approach to the Corporate Plan. Specifically, this
proposal supports the councils statutory functions in relation to Childrens Services and in
facilitating organisations to work together on more ambitious and effective projects that
complement council services.

16. This proposal relates to the new corporate plan considered on 19 March 2014 at Full
Council. Specifically the following priorities;

E - 5

Keeping Children Safe;
Delivering statutory duties and achieving value for money;
Working in partnership to improve outcomes.

17. This proposal relates to the Children and Young Peoples Plan 2014 - 2017 (agreed at Full
Council on 9 J anuary 2014) under the following priorities;

Securing children and young peoples emotional and physical health;
Helping children and young people to be safe and feel safe;
Inspiring and providing equal opportunities for all children and young people to
achieve their goals and dreams.

18. This proposal is incorporated into the childrens social care commissioning strategy and is a
key component in the childrens social care service plan (incorporating the improvement
plan from the Childrens Improvement Board).

19. The incoming legislation from the Children and Family Act in relation to the Special
Educational Needs and Disability will also place certain duties upon local authorities in
regards to children. From 1 September 2014, local authorities must have regard to the
Special Educational Needs (SEN) Code of Practice for 0 to 25 years. This is statutory
guidance for organisations who work with and support children and young people with SEN.
While the details of which services should be commissioned in an area will be agreed
locally, all local authorities and their partner Clinical Commissioning groups (CCGs) must
make arrangements for agreeing:

The education, health and social care provision reasonably required by local children
and young people with SEN;
Which education, health and social care provision will be secured and by whom;
What advice and information is to be provided about education, health and care
provision and by whom and to whom it is to be provided;
How complaints about education, health and social care provision can be made and
are dealt with; and
Procedures for ensuring that disputes between local authorities and CCGs are
resolved as quickly as possible.

20. Local governance arrangements must be established which ensure clear ownership and
accountability across SEN commissioning. They must be robust enough to ensure that all
partners are clear about who is responsible for delivering what, who the decision makers
are in education, health and social care, and how partners will hold each other to account in
the event of a dispute. The guidance states that it is important for Elected Members and
chief executives across education, health and social care to demonstrate leadership for
integrated working. Arrangements for children and young people with SEN should be
specifically accountable to councillors and senior commissioners. This can take the form of
a programme board, acting as a bridge between the local authoritys education and social
care leadership and health partners. It should be clear who can make decisions both
operationally (e.g. deciding what provision should be put in an Education, Health and Social
Care Plan (EHC plan) and strategically (e.g. what provision will be commissioned locally,
exercising statutory duties). This proposal will enable the local authority to help fulfil duties
regarding education, health and social care provision for children and young people with
E - 6

SEN in offering parental choice of placements that have been quality assured, are
competitively priced and where possible available locally.

CONSULTATION

21. An external consultation was undertaken with providers regionally in J une 2013 and locally
in March 2014. The new pricing panel of providers will be for new placements only. The
proposal will not affect any existing children in placement and therefore consultation was
limited to providers only.

FINANCIAL / BUDGET IMPLICATIONS

22. The Isle of Wight Councils annual spend for SEN placements 2013 to 2014 was
1,069,799 and for Residential placements was 2,378,083. The total annual spend for
2014 to 2015 is estimated to be in the region of 3,000,000. This proposal is an opportunity
to move from the historic spot-purchasing arrangements which has limited opportunity to
negotiate competitive rates, to a more proactive strategic management and commissioning
of the market by the Isle of Wight Council.

23. If use of this panel of providers does deliver savings then the local authority will have to
consider how those savings are applied, either to assist other pressures within childrens
services or to contribute towards the broader corporate savings requirements.

24. Education placements are paid from the Dedicated Schools Grant and therefore any
savings which arise from these new arrangements cannot be used to contribute to any local
authority savings.

CARBON EMISSIONS

25. This proposal will have a small impact on the councils carbon reduction target which is
currently set at a 6% year on year reduction. Through a reduction of out of authority
placements there will be a reduction in car journeys. Based on current placements, if all
residential placements were available and used locally there would be a saving of some
66,000 car miles per year. Assuming the existing VW blue motion pool cars were used, this
would equate to 13 tonnes of CO2 saved.

LEGAL IMPLICATIONS

26. The legal implication in regards to the tender may be a challenge from a provider who is not
selected onto the panel of providers by not having passed the tender evaluation process.
The 2014 EU Procurement Directives have been adopted by the EU institutions and were
published in the Official J ournal of the EU on 28 March 2014. They came into force on 17
April 2014. EU member states now have 2 years to implement them in national legislation.
This tendering exercise will demonstrate that the Isle of Wight Council has undertaken a
competitive process with the market should any provider challenge the local authority
regarding any future placement that the Isle of Wight Council makes.




E - 7

EQUALITY AND DIVERSITY

27. The council as a public body is required to meet its statutory obligations under the Equality
Act 2010 to have due regard to eliminate unlawful discrimination, promote equal
opportunities between people from different groups and to foster good relations between
people who share a protected characteristic and people who do not share it. The protected
characteristics are: age, disability, gender reassignment, marriage and civil partnership,
pregnancy and maternity, race, religion or belief, sex and sexual orientation.

28. Under the Equality Act 2010, the Council is required to have due regard to equality duties
when making decisions, reviewing services, undertaking projects, developing and reviewing
policies.

29. The equality impact assessment looks at how proposals promote equality and diversity to
ensure legal compliance and how the services provided by proposals meet the needs of our
local community. An initial equality impact assessment screening has been undertaken
which confirms compliance to these duties.

PROPERTY IMPLICATIONS

30. There may only be one potential property implication in that one of the providers is owned
and run by the Isle of Wight Council should it ever be decided to expand provision. There
are no other property implications as the placements are within property owned by the
providers.

OPTIONS

31. Option A: That the Executive delegate agreement to award new contracts to providers from
the new procured panel of providers to a senior officer (the Isle of Wight Area Director of
Childrens Services) for Residential Care, Residential Care and Education and Independent
Education provision for children and young people and to authorise any contract with a
potential value of in excess of 100k to be sealed in accordance with the Councils Contract
Standing Orders. This agreement will be in consultation with the Executive Member.

32. Option B: To continue with the spot purchasing arrangements for Residential Care,
Residential Care and Education, and Independent Education provision for children and
young people independently from the proposed panel approach with the other South of
England local authorities.

RISK MANAGEMENT

33. The risk associated with option A is that providers would not express an interest in being
part of the tendering process nor elect to be part of the panel of providers under the terms
and conditions set out in the tender. The provider consultation events mitigated this risk. A
significant number of existing providers have applied to be part of the tender and a number
have expressed an interest in opening up new provision locally on the Isle of Wight. This is
why this option is being recommended.

34. The risk associated with option B is that the costs of residential placements to the Isle of
Wight continues to be uncompetitive and is likely to rise further. The Isle of Wight would not
be part of the collective purchasing power available to the local authorities to negotiate
E - 8

more competitive rates without compromising quality of care and safeguarding. This option
does not accord with the sufficiency duty placed upon the local authority. This is why this
option is not being recommended.

EVALUATION

35. Option A is being recommended. This option contributes to the objective, is cost effective
and affordable and the risks associated with this option are manageable.

RECOMMENDATION

36. Option A: That the Executive delegate agreement to award new contracts to providers
from the new procured panel of providers to a senior officer (the Isle of Wight Area
Director of Childrens Services) for Residential Care, Residential Care and Education
and Independent Education provision for children and young people and to authorise
any contract with a potential value of in excess of 100k to be sealed in accordance
with the Councils Contract Standing Orders. This agreement will be in consultation
with the Executive Member.

APPENDICES ATTACHED

37. APPENDIX - The tender documentation for the Mid Southern Authorities Tender for the
Provision of Residential Care, Residential Care and Education and Independent Education
Provision.
BACKGROUND PAPERS

38. Sufficiency Statutory guidance on securing sufficient accommodation for looked after
children.

39. The amendments to the Childrens Homes Regulations came into effect from J anuary 2014
and placed a number of additional requirements on providers. Local authorities do need to
have management oversight of providers in regard to these requirements. This is to satisfy
themselves that children in placement are being safeguarded and protected from the risk of
sexual exploitation.
http://www.lscbchairs.org.uk/sitedata/files/Children_s_home_reg_2014.pdf

Contact Point: Simon Dear, Commissioning Officer,
821000 Ext 6764 e-mail simon.dear@iow.gov.uk


J OHN COUGHLAN

Director Childrens Services
COUNCILLOR RICHARD PRIEST
Executive Member for
Childrens Services and Education