Decision details

To consider the report of the Cabinet Member for Adults and Health seeking approval for residential respite provision.

(i)  To approve the expansion of beds available at Kentish Road to fully utilise this asset and deliver the majority of overnight respite from two sites, Kentish Road and Weston Court, noting that this revised model is more cost effective than the current model.

(ii)  Given the feedback from the consultation, to maintain a mixed economy of provision, as per Option 1b, whereby the Council provides Kentish Road and an external provider provides Weston Court.

(iii)  To delegate authority to the Executive Director of Community Wellbeing, Children & Learning (DASS & DCS) following consultation with the Cabinet Member for Adults and Health to take any action necessary to give effect to the recommendations, which will include authority to initiate the procurement and award of a contract to an external provider for the delivery of the service at Weston Court.

(iv)  To undertake a review after 24 months of implementation to ensure that all services, whether internal or external, are operating effectively and key principles (in terms of quality, cost effectiveness and equity of offer) are being met, which, if they are not, will trigger a reconsideration of the options.

1.  The Council currently spends £1.57M on overnight residential respite for adults with learning disabilities in Southampton.  This includes its own in-house provision at Kentish Road (with current capacity to deliver 1,800 nights a year which includes an emergency bed.) as well as two external contracts: one with Way Ahead Leisure Pursuits who provide a 3-bedded service in the Council’s property Weston Court (commissioned to deliver 810 nights a year) and the other with the Rose Road Association (commissioned to deliver 781 nights a year for adults and 930 nights a year for children). Spend on Kentish Road is £916.4k per annum (includes building costs); spend across the Rose Road and Way Ahead contracts is £634.1k.  Utilisation varies across contracts with Weston Court being high (circa 96% across the year) and Rose Road being around 65%.  Utilisation at Kentish Road is around 95% for the core respite beds and 30% for the emergency bed.

2.  Like many councils across the country, Southampton is facing significant financial challenges and needs to make efficiencies to ensure that it is able to continue to provide high quality services within the resources available.  Demand for respite is also increasing.  Over the next 4 years to 2028/29 officers have modelled that respite capacity will need to increase by around 6% to 3592 nights a year. This is based on general growth in the population as well as children with residential respite packages transitioning to adult services. 

3.  In addition to the increased demand, the Council is also seeing costs rise within the market as a result of increases in employers’ national insurance, the national minimum or living wage increases and general cost of living.  Over the last few years we have seen increasing volatility in the market.

4.  Therefore, in summary, with the current contracts with Way Ahead and Rose Road coming to an end, the Council needs to review its current residential respite provision and identify the most cost-effective way of delivering these services in future.  Regardless of whether services are provided internally, externally or through a mixture of both, the current model of provision is not the most cost-effective.  Kentish Road is operating below the capacity that it could be operating – originally a 9-bed unit, it is only operating 4 beds (plus one emergency bed). With contracts expiring, the Council has two choices:

-  In accordance with the Public Contracts Regulations, to test the market to achieve value for money.

-  Alternatively, in line with the SCC First policy 2017, to consider and where appropriate, appoint in-house services to deliver its requirements.

1.  Do Nothing option – not recommended on following grounds:

•  Contracts are due to come to an end in 2025. Given that contracts were last tendered in 2019, the Council would be looking to reprocure these services with a view to achieving the best value, whilst taking advantage of the greater flexibilities for dialogue and negotiation offered by the new Procurement Act 2023

•  Demand for respite is increasing and the current model will not continue to deliver the capacity required without additional investment. The Council needs to find a way of delivering services most cost-effectively whilst maintaining high quality.

•  Like many councils across the country, Southampton City Council is facing significant financial challenges, and needs to deliver cost efficiencies to operate within the resources available. 

2.  Single site option (Option 2 in the consultation) – not recommended on following grounds:

•  It does not offer a choice of location – there would not be a provision on both the East and West side of the city

•  It does not provide the flexibility to meet a variety of needs (i.e. there would only be one provision to accommodate everyone)

•  Capacity would be challenged particularly at peak times of the week

•  Service users who responded to the consultation raised significant concerns about this option for the above reasons

3.  Two site option with both Kentish Road and Weston Court outsourced to external Provider (Option 1a) – this is a variation of the two-site model (Option 1) of having a single service delivered across two sites.  It would have all the benefits in terms of economies of scale and consistency and potentially could deliver greater savings (dependent on the outcome of the procurement); however, this option is not recommended on the following grounds:

•  The Council would have less control over costs.  As already stated in paragraph 3, market rates have increased over the last 3 years and remain unpredictable and volatile. 

•  Staff terms and conditions could potentially be less favourable

•  It would delay delivery of the efficiencies and savings associated with Option 1 due to the additional time required to undertake a tender of this scale (potentially extending the timeline by 3-6 months, dependent on the outcome of the procurement)

•  This option would create significant upheaval as it would mean a potential change of provider for both Weston Court and Kentish Road

4.  Two site option with both Kentish Road and Weston Court delivered by the Council (Option 1) – whilst this was originally the preferred option and would have all the benefits in terms of economies of scale and consistency associated with having a single provider for both sites, feedback from the consultation has demonstrated that people would prefer a mixed economy of in-house and external provision.  People were also concerned about the ability of the Council to realise the savings that can be achieved through this new model, given the Council’s high use of agency staff over the years, highlighting a need for the Council to demonstrate sustained improvement in cost effectiveness and rebuild confidence in the cost effectiveness of its services, before this option can be reconsidered.  It is therefore proposed that alongside implementation of the recommendations in this report, the Council implements and monitors progress against a cost improvement plan.