Hackney Council's Cabinet Procurement and Insourcing Committee has opted against insourcing children's care services, citing significant financial, regulatory, and operational risks. Instead, the council will commission a partner provider to deliver residential care and support for children looked after.
The decision, made at a meeting on Monday, June 1, 2026, means that two new children's homes, Blossom House and Starbright House, will be operated by a specialist provider. This approach was chosen over insourcing, which was deemed not viable due to Hackney lacking the necessary internal infrastructure, workforce, and regulatory experience. The council will, however, retain ownership of the properties.
Insourcing was deemed not viable at this stage due to significant financial, regulatory and operational risks.
Specifically, Hackney currently lacks the internal infrastructure, workforce and regulatory experience required to run Ofsted-registered homes.
Financial modelling also indicated higher overall costs for insourcing, estimated at approximately £18.8 million over its whole life.
The contract, awarded to Provider B, will be for a period of five years with an option to extend for a further two years. This aims to enhance the quality of care for children looked after by minimising disruption and keeping them connected to their communities, while also delivering savings. The successful provider is committed to reducing its environmental impact and paying at least the London Living Wage to all staff.
Provider B has made further social value commitments, including prioritising local recruitment, with all roles advertised exclusively to Hackney residents via Hackney Opportunities for a fixed period of time and creating training and apprenticeship opportunities plus work placements for residents, including those with SEND, and care leavers.
Additionally, the provider will create 28.96 FTE jobs as part of this contract.
The procurement process involved extensive engagement with care-experienced children and young people through group and one-to-one sessions. Key messages from young people, such as the importance of personalising their rooms and feeling at home,
the need for diverse staff who reflect Hackney's community,
and staying close to friends, family and familiar areas,
were incorporated into the service design. Young people also contributed to naming the homes, with Blossom House chosen due to the trees on the road and Starbright House implying a place where children can shine brightly and achieve their potential.
Provider B achieved the highest overall score of 91% in the evaluation, which included quality (70%), social value (15%), and price (30%). The estimated total value of the contract is up to £15.1 million over seven years.
The projected savings of approximately £2.1 million over the seven-year contract term are anticipated through cost avoidance
by having greater control over prices through a block contract
and reducing reliance on high-cost, out-of-borough spot placements. These savings are based on an assumption of 17% voids throughout the life of the contract.
Key Performance Indicators (KPIs) will cover quality of care, education, employment, outcomes for children, health and wellbeing, social and emotional development, service management and efficiency, and children's voice.
The contract will be managed by the Senior Commissioning Manager in the Children's Integrated Commissioning Service, with oversight from the Head of Commissioning and Head of Corporate Parenting. Contract performance meetings will be held at least quarterly, with monthly meetings anticipated for the first six months. All properties, policies and documentation relevant to the running of the service will be subject to regular audit and inspection.
Following the approval of the contract award, officers will proceed with implementation to commence by 15th June 2026. Pending Ofsted registration by December 2026, the homes should be ready for children to move into by early 2027.
The committee also noted the minutes of previous Hackney Procurement Board meetings. See Decisions