Hackney Council has awarded a contract to Provider B to operate two new children's homes, Blossom House and Starbright House, in a move designed to improve the quality of care for children looked after by the local authority. The decision, made by the Cabinet Procurement and Insourcing Committee on June 1, 2026, aims to keep children closer to their communities and support networks.
The two new homes will provide a total of six care arrangements for children with complex needs, accommodating a projected number of children that will be determined by the complexity of their needs and the available spaces. The contract, valued at up to £15.1 million over seven years, will see Provider B deliver residential care and support for children aged 11-17. This initiative is part of Hackney's commitment to its corporate parenting duty and aims to address the shortage of local children's homes, reducing the need for out-of-borough placements.
The procurement process involved significant input from care-experienced children and young people, whose feedback influenced the design of the service. Key messages from young people, such as the importance of personalising rooms and staying close to friends and family, were incorporated into the service design. The homes themselves have been named Blossom House and Starbright House, a choice made by the young people. The contract also embeds Hackney's STAR practice model, focusing on systemic, trauma-informed, and anti-racist care, with Key Performance Indicators (KPIs) including 'Children's voice' and 'Young People's Voice and Partnership Working' to ensure their feedback continues to shape the ongoing operation of the homes.
Provider B achieved the highest overall score of 91% in the evaluation process, which weighted quality at 70%, social value at 15%, and price at 30%. Provider B scored 52% for quality, 30% for price, and 12% for social value. The provider is also committed to reducing its environmental impact and creating job opportunities.
Alternative options considered included doing nothing, which was rejected due to its perpetuation of out-of-borough placements, and insourcing the service. Insourcing was deemed not viable at this stage due to significant financial, regulatory, and operational risks. Hackney Council also lacked the necessary internal infrastructure, workforce, and regulatory experience required to run Ofsted-registered homes. Financial modelling indicated higher overall costs for insourcing (approximately £18.8m whole-life cost), and the reputational and compliance risks of an unsatisfactory Ofsted outcome were also considered significant.
The contract will be managed by Hackney's Children's Integrated Commissioning Team. 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. Specific targets include: 90% service utilisation; 100% of children registered with a GP, attending a dentist, and having an eye test; 100% of children accessing relevant medical services and support networks; 100% of children in education, training, or apprenticeship; less than 10% safeguarding incidents (e.g., missing from home); 100% of children moving successfully and in a planned way from the service; and 100% of social value commitments met.
The estimated total value of the contract is up to £15.1 million over seven years, with an anticipated cost avoidance of approximately £2.1 million over the contract term. The average annual contract value is £2.16m. The average cost of residential placements in the period 7 2025/26 budget monitoring forecast was £7,229 per child per week. While this is less than the contract cost alone for in-house provision, some out-of-borough placements are significantly more expensive, with the average cost of the twelve most expensive placements being £9,794 per child per week.
The provider is committed to paying at least the London Living Wage to all staff. The contract embeds Hackney's STAR practice model, focusing on systemic, trauma-informed, and anti-racist practice. The provider's approach to recruitment was assessed as part of the evaluation process, and there is confidence that a robust process will be delivered. Staff will receive training in trauma-informed and anti-racist practice, and the STAR model will be embedded in service delivery.
The new homes are expected to be ready for children to move into by early 2027, following Ofsted registration by December 2026. More information can be found in the Public reports pack for the Cabinet Procurement and Insourcing Committee meeting.