Lewisham Council has secured an £800,000 grant from the Department for Education to help fund the refurbishment and operation of a new children's home, aiming to improve local residential provision and reduce reliance on external placements.
The proposed 5-6 bed facility, located at 200 Kirkdale in Sydenham, is part of a revised strategy that replaces a previously agreed three-home model. This earlier plan was deemed not viable due to significant weaknesses in the previously approved approach. Running three small, dispersed homes would have created duplicated staffing overheads, weaker operational resilience, viability concerns, safeguarding and registration risks linked to the school-adjacent locations.
The project, discussed at a Children and Young People Select Committee meeting on Tuesday, September 15, 2026, will see an existing council building transformed into a home. The total capital cost for the refurbishment is estimated at £1.68 million. This will be funded by the £800,000 DfE grant, a £400,000 capital receipt from a council asset sale, and an additional £479,000 in council capital funding.
Currently, 51 children in Lewisham's care live in residential homes, with 76% of them placed outside the borough. The new home is intended to keep more children closer to their friends, schools, and support networks, while also reducing travel time for social workers. The council is currently spending almost £30 million on residential care annually, with average residential placement costs exceeding £7,300 per week, and a considerable number exceeding £10,000 per week. The projected annual running cost for the new children's home is approximately £1.915 million in its first full year of operation (Year 2), with an initial estimated cost of £824,000 in Year 1. This compares to the current average cost of external placements for the cohort of children intended for this home, which is approximately £2.4 million per year.
The single, council-run home is expected to offer greater operational resilience and direct oversight of care quality. Measures to ensure the quality of care and meet Ofsted registration requirements include stronger control over the quality, culture and consistency of care,
robust performance monitoring and continuous feedback arrangements,
and a formal continuous improvement approach.
Ofsted registration requirements will be met by aligning property works, staffing, policies and registration preparation through a mobilisation plan
and maintaining early engagement on regulatory readiness.
The staffing model will require early recruitment of a suitably experienced Registered Manager and responsible operational leadership, followed by phased recruitment of residential workers, seniors and waking night staff.
The workforce plan will include induction, supervision, training, agency contingency, safer recruitment, retention planning and arrangements for maintaining staffing ratios during sickness, vacancy or delayed mobilisation.
There is also a desire to recruit staff who are fully committed
and 100% committed to providing the best levels of support within that home,
with an emphasis on recruiting staff with experience of being in care.
The home is anticipated to open in April 2028, subject to successful refurbishment and Ofsted registration. Key milestones for the refurbishment process include contractor appointment by January 2027, works commencing on site by March 2027, practical completion by November 2027, and Ofsted registration by January 2028.
Financial modelling suggests that the cost of operating the in-house home will be less than the current expenditure on external placements, with any savings initially used to repay the capital investment and fund future maintenance.
The committee noted the report, acknowledging the importance of the project in strengthening the council's corporate parenting responsibilities and sufficiency strategy. Further details can be found in the Public reports pack for the meeting.
