Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

EXECUTIVE SUMMARY

1) Summary of Decision Area:

1.1. Swanwick Secure unit is a 16 place unit offering secure accommodation to young people aged 10 -17 sentenced for crime and being placed by the Youth Justice Board and those secured by the Courts on `welfare' grounds. 10 places are currently made available under contract to the Youth Justice Board for 6 months of the year and 13 places between 1^st June and 31^st October. One place is provided to Portsmouth City Council. The remaining places are either used by Hampshire for young people at risk or made available on a spot purchase basis to other local authorities or the YJB

1.2. The contract with the YJB has been in place now since 1996 when the unit was rebuilt and the arrangements for service providers to submit tenders for new contracts by the end of October 2008 have been published. It is anticipated contracts will be awarded to take effect from 1^st July 2009 with a short extension to existing contracts from April 2009.

1.3. At the same time the Department for Children, Schools and Families is seeking capital bids to support service developments and the two processes will run simultaneously to allow for the YJB to evaluate if over time additional services could be made available on a more cost effective basis to meet placement needs.

1.4. A capital bid and the necessary business case is being developed and this report seeks the authority of the Executive Member to enable a response to tender to the YJB and also to submit a capital bid to the DCSF to develop the service.

1.5. The YJB and the DCSF will evaluate tenders and capital proposals between November 2008 and January 2009 and it is anticipated contracts will be awarded in March / April 2009.

1.6. The decisions sought from the Executive Member to submit a capital development proposal is, at this stage, agreement in principle and it is intended to further report in December 2008 with a detailed business case. There is, at this stage, no commitment to proceed with a capital development and further detailed discussion with the DCSF are anticipated should the proposal be of interest. Hampshire has a long history of working with Government to develop the secure service and has recently received over £1.5m to upgrade facilities and improve security.

1.7. The tender for a price to provide services to the YJB will be constructed to show a price based on the current level of service and a price should the proposed development proceed.

1.8. Should capital be offered it will be necessary to commence consultation and seek planning approval before a commitment could be given to proceed. The likely development timescale is in the order of 2 to 2.5 years from the point at which capital is committed by the DCSF.

2) Issues Covered in Report:

2.1. The current service of 16 places and has secure income from the YJB and Portsmouth City Council.

2.2. The price charged to the YJB and Portsmouth Council is £575 per night and £605 per night to other local authorities. The national range is £490 to £700 per night.

2.3. The Youth Justice Board has indicted it is seeking to purchase 52 places in South East England from 2009 and it is known there are currently 38 places available including those at Swanwick.

2.4. Indications from the YJB are that if additional places can be made available at a more cost effective price a joint decision by the DCSF and the YJB could be made to award a contract that recognised phased developments and anticipated lower costs as additional places became available. It is understood contracts could be for between 2 and 7 years depending upon circumstances and price.

2.5. A site feasibility study has been undertaken and the Property, Business and Regulatory Service will be in a position to assist in putting forward a capital proposal to the DCSF by the end of October 2008.

3) Recommendations:

3.1. That the Executive Member approves that a response should be made to an invitation to tender for the provision of places to the Youth Justice Board based upon the existing level of service

3.2. That The Executive Member approves in principle that a capital bid should be made to the department of Children, Schools and Families to develop the service

3.3. That the Executive Member approves that a response should be made to an invitation to tender for the provision of additional places to the Youth Justice Board should the capital bid be successful

3.4. That the Executive Member shall receive further reports should the proposed bid for capital to develop the service be agreed by the DCSF

MAIN REPORT

1) Purpose of the Report

1.1. This report seeks the authority of the Executive Member to respond to a tender opportunity to provide secure accommodation to the Youth Justice Board.

1.2. The report also seeks authority to make a bid for capital to the Department for Children, Schools and Families to develop the service.

2) Contextual Information

2.1. The current building which provides secure accommodation was opened in 1996 and development costs were supported by a grant from Government. Subsequently additional capital has been made available to upgrade and improve the facilities and some of these funds would be recoverable if Hampshire were to cease offering secure accommodation.

2.2. Of the 16 places available 10 are made available to the YJB for 6 months of the year and 13 for the period 1^st June to 31^st October. One place is made available under contract to Portsmouth City Council. Hampshire uses on average between 2-3 places over the year and the remainder are used by other local authorities and by the YJB on a spot purchase basis.

2.3. The existing contract with the YJB comes to an end in June 2009 and all service providers nationally are invited to respond to tender for new contracts.

2.4. The YJB has indicated it requires in the order of 52 places in South East England and in order to stimulate additional services the Department of Children, Schools and Families have also invited bids to support capital developments. It is anticipated the decision to award service contract will be taken alongside a decision regarding capital and would recognise a phased expansion of services at a lower unit cost.

3) Key Issues

3.1. Hampshire has no need for the available number of secure places available at Swanwick and the service exists in a national and regional context to provide services to the YJB. Whilst Hampshire does make use of the places and other local authorities do seek placements from time to time it would be too great a risk to continue to operate the service without an underpinning contract with the YJB.

3.2. Since the current service opened in 1996 Hampshire has typically used between 2 and 3 places at any one time and the unit has operated at occupancy in the order of 90%.

3.3. As Swanwick is a relatively small unit (16 places) here is a risk that the unit cost are higher that some other providers. The price charged per night in 2008/9 is £575 and the national range is between £490 and £700. There is only one other service provider in South East England and their service costs in the order of £700 per night.

3.4. If the capital bid were to be successful it would be possible to reduce the unit costs and the indication from the YJB is that they would consider an extended contract period, potentially up to 7 years to allow for the development to be undertaken and for lower costs to be appreciated over time

4) Development proposals

4.1. A brief has been developed to guide an initial site review which includes the following features which respond to the YJB purchasing requirements briefing.

· additional places for secure transition-these places would be within the secure boundary and offer facilities to support transition to less secure provision and support to discharge plans

· high dependency places, which could include facilities for young mothers and their babies or those with very challenging behaviour.

· further secure places

4.2. The site feasibility work undertaken by the Property, Business and Regulatory Service indicates that development of the service is feasible. Consultation and planning consents would be required in due course should the DCSF make capital available and should the County Council wish to proceed.

4.3. It is not thought likely that any contribution can be made to the development costs from the capital programme and the proposed bid to the DCSF will be for 1005 of all development costs.

5) Financial analysis

5.1. The advice of the County Treasurer is currently being sought in considering a tender price to the YJB for both the existing number of places available and for any additional beds that could be offered following a capital development.

5.2. The YJB accept that secure accommodation meets both a justice sentencing option and a need for `welfare' places for those young people considered to be at risk to them selves or others who are ordered to be `secured' following application to the Courts.

5.3. Historically Hampshire has used 2-3 `welfare' places on average each year and Portsmouth City has contracted for one place. Portsmouth City Council has indicated it wishes to continue to purchase one place.

5.4. Subject to further work with the County Treasurer a response to tender to provide 12 places to the YJB will be completed by the tender deadline at the end of October 2008. It is anticipated that price reductions could be offered if the capital developments were agreed and this will be included in the response to the YJB.

5.5. The YJB has indicated that from September 2010 they will anticipate that local authorities should fund the cost of education based and service providers should recover the cost of education from other responsible authorities within existing recharge arrangements. The YJB have indicated that they will at that stage reduce the contract price in anticipation local authorities will make a contribution to the cost of education.

5.6. As further advice is made available the implications for Hampshire both in funding the education element of the secure service budget and in seeking cost recovery from other authorities will be assessed.

6) Outline of Options

6.1. Option 1:

Not to respond to tender to provide secure places to the YJB and to seek purchases from other local authorities and the YJB on an ad hoc basis

6.2. Option 2:

Not to respond to tender to provide services to the YJB and to close the secure unit and to consider alternative residential uses or to dispose of the site

6.3. Option 3:

Respond to the YJB tender by offering a similar number of places as currently. (10 for 6 months of the year and 13 for the period 1^st June to 30^th November)

6.4. Option 4:

To make a capital development bid and to seek a contract with the YJB for a higher number of places once the development is completed in 2011, assuming capital approval is gained from the DCSF in April 2009

7) Option Analysis / Comparison

7.1. Option 1, not to respond to tender and seek to operate the service with income from ad hoc income from the YJB or other local authorities, would expose Hampshire to significant risk in relation to maintaining income to offset the operating budget and it is thought this is too great a risk.

7.2. Option 2, not respond to tender and to cease operating the service and potentially consider alternatives uses of the building. This option would expose Hampshire to purchase costs for any need for secure accommodation, estimated to be between £600,000 - £700,000 per year, for 2-3 places on average. Within this option it would also be necessary to explore alternative uses for the existing buildings and whilst it is modern and in good repair it is likely that additional capital costs would be incurred to make the building suitable for alternative use. It may be an option to dispose of the building to an alternative operator although it is likely some part of previous development capital might be repayable. There would be a need to consult with local neighbours if any change of use were proposed. In particular neighbours have been very supportive of the operation of the secure unit, on the basis it is secure and local disruption is rare.

7.3. Option 3, to offer the current number of places to the YJB within a renewed contract, may be possible as it is known the YJB are seeking more places in the SE than are available. However unit costs would remain relatively high due to diseconomies of scale and Hampshire would be at future risk of a short contract period and potentially other providers making more places available to the YJB over time

7.4. Option 4, to seek capital support from the DCSF to expand the service and seek a longer contract with the YJB, offers an opportunity to reduce unit costs and achieve security of income.

7.5. The risk to Hampshire of a change in the way tender costs and prices are calculated and in changes to the way education services are funded presents similar risk in each option other than closure.

8) Conclusions

8.1. The Swanwick secure service is a successful and well regarded unit and given YJB purchasing intentions Hampshire is in a good position to bid for capital investment, which if gained will assist in reducing unit costs and potentially in securing a longer term contract with the YJB.

8.2. The only other secure unit in SE England is privately run and not eligible to bid for capital from the DCSF.

8.3. It is an option to tender to provide the existing level of service to the YJB although it is likely that, if successful, the contract period will be short, perhaps 2 years initially and subject to renewal consideration regularly as supply and demand vary.

8.4. If the DCSF will consider a capital proposal based on 100% of the costs of development an opportunity exists to develop services, including to meet a gap in provision for young women with very young children in secure accommodation, for those with very challenging behaviour and to support transition and discharge plans.

8.5. The response to tender for a price to make places available to the YJB will be binding and the advice of the County Treasurer is being sought as the detailed work is undertaken.

8.6. Any bid for capital developments would not at this stage be binding and will be subject to detailed discussions with the DCSF, local consultation and obtaining the necessary planning consents.

9) Summary Recommendations

9.1. The approval of the Executive Member is sought to make a response to tender based on two positions.

· The current configuration of services - potentially offering 12 places to the YJB and one place to Portsmouth City council

· A price based on offering a greater number of places should the capital development be supported

9.2. The approval of the Executive Member is also sought to make a proposal for a capital development to increase places on the basis of no capital requirement from Hampshire County Council.

9.3. It is proposed to report further to the Executive Member in December 2008 to include a business case for the capital development anticipating that at that stage further discussions will be underway with the DCSF as they evaluate the outline proposal in preparation for making a decision by February 2009.

CORPORATE OR LEGAL INFORMATION: