The Cabinet gave consideration to a report of the Executive Director, Health and Wellbeing which sought an exemption to the Contract Procedure Rules to extend three contracts providing supported housing for homeless people with additional support needs.
The Government had proposed significant changes to the funding received for short term supported and to proceed to a tender process at this time, could subject the Council to significant financial risk.
Option 1 - To allow the existing contracts to end on 31 March 2018 and do not commission replacement provision. This was not the recommended option. With this option:
· Homelessness was increasing both nationally and locally. The provision of supported housing makes a significant contribution to the prevention and relief of homelessness: these services were also less costly than other options such as Temporary Accommodation/B+B or out of borough placements. Whilst Oldham had seen an increase in homelessness presentations and associated costs, it had not experienced the 400% increases seen by some (non-City) neighboring Local Authorities who have less supported housing provision.
· The provision of supported housing reduced from 146 units to 104 in 2016/17 to meet savings targets from these contracts: to cease provision would severely compromise the council’s ability to meet its statutory homelessness obligations.
· In Oldham from 2015/16 to 2016/17 there was a 90% increase in the number of households at risk of homelessness, and the number of households owed a statutory duty increased from 47 in 2015/16 to 71 in 2016/17. From April - November 2017, 334 statutory homelessness decisions were taken, with 90 households owed the statutory duty. The number of households in Temporary Accommodation (TA) also increased: on 30 September 2015, there were 20 households in TA, increasing to 28 on 30 September 2016 and to 66 on 31 March 2017, including 30 households in B + B many households accessing the services have a high degree of vulnerability/complexity and there would be negative impacts for them and potentially on the wider community if their housing and support needs are not met.
Option 2 - To allow the existing contracts to end on 31 March 2018 and competitively tender for new services to be in place by 1st April 2018. This this is not the recommended option. With this option:
· There was now not sufficient time to undertake a procurement process and have in place a new contract by 1st April 2018. It was the preferred option when Government was due to release its Green Paper in spring 2017, with details of each local authorities funding distribution expected in autumn 2017. However the delay to the Governments timetable (with the eventual release of revised proposals on 31st October 2017) created a ’limbo period’ for local authorities, landlords and support providers, where risks couldn’t be adequately scoped / costed by any party.
· The revised Government proposals were subject to further consultation, and entail a more comprehensive change to the funding arrangements for short-term services.
· The Homelessness Reduction Act 2017 would be enacted in April 2018. This change to Homelessness legislation impacts on pathways and processes which needed to be tested before incorporating into a new tender.
Option 3 - To allow extension of existing contracts from 01/04/18 to 30/06/19 at the current contract charges. This is the recommended option, with this option:
· The extension could be accommodated within the councils Contract Procedure Rules as the proposed Modification is for an increase in value of not more than 50% of the initial contract value.
· The contracts contain a ‘no fault’ termination clause and the Council may tender the services sooner if Government release details / make changes sooner than expected.
· The opportunities potentially afforded by a funding transfer to the Local Authority were less likely to be compromised.
· This option carried the risk of needing to have arrangements that cut across two different funding regimes: if funding transferred was less than the actual costs of provision, such that cannot be resolved by negotiated service reconfiguration, there may be the need for another competitive tendering exercise within a short period.
Option 4 - To allow extension of existing contracts from 01/04/18 to 31/03/20 at the current contract charges. This is not the recommended option.
· This would be the preferred option, however as the proposed extension cannot be accommodated within the council CPRs - as the proposed Modification would be for an increase in value of more than 50% of the initial contract value - there are greater legal risks with this option.
· This would maximize opportunities potentially afforded by a funding transfer to the Local Authority, and avoid the need to have arrangements that cut across two different funding regimes - which carries a risk of incurring costly use of Council resources for a contract that could potentially be relevant for a very short period, if funding transferred is less than the actual costs of provision.
· There would be less risk to the council of taking decisions on service redesign and pricing, as the policy and funding landscape was likely to be clearer and its implications for the Council and for service provision better scoped.
· The council had a ‘no fault’ termination clause which could be utilized if Government make changes sooner than expected.
RESOLVED – That the Cabinet would consider the commercially sensitive information at Item 19 of the agenda before making a decision.