EXCEPTION TO COMPETITIVE TENDERING REPORT
RE: PURCHASE OF RESIDENTIAL AND INDEPENDENT FOSTER
AGENCY (IFA) PLACEMENTS FOR CHILDREN LOOKED AFTER
1.
BACKGROUND
There are an average of 120 children and young people looked
after by the Borough of Poole. The majority of children looked after
are placed with in-house foster carers. The Borough has no inhouse residential facility.
For a small number of children, their circumstances require the
Borough to purchase specialist residential placement, or IFA
placements. The details and reasons for seeking exception to
competitive tendering are set out below.
2.
RESIDENTIAL PLACEMENTS
i)
Children and Families Units ‘spot purchases’ specialist
residential care placements from voluntary and independent
sector providers for a small number of children and young
people with very complex and specialist needs. Placements are
usually made to address medium/long term needs that cannot
be met through local community based service provision, or in
house foster placements.
ii)
On average there are 4 – 5 young people in such
placements at any one time. Placements cost on average
£3,500 per week. The resulting annual financial commitment per
placement can be in the region of £150,000, far in excess of the
current limits beyond which competitive tenders would normally
be sought. The total cost of residential placements in 2005/6
was £1.122m
iii)
Potential residential placement providers for the Borough of
Poole are identified through

A detailed national Purchaser Directory published by
Community Care
 The South West Authorities Provider (SWAP) database.
Poole C & F pay an annual subscription towards
management of the database
 Provider information held within C & F Unit from previously
used residential providers
iv)
The process for agreeing and commissioning a residential
placement is as follows:
v)

Multi-agency assessment identifies the need for
external residential provision

Referral to and case discussion at Multi-agency
complex needs panel. Panels role is to ensure
that local community based provision has been
fully explored, ensure that effective joint
commissioning of placements is undertaken and
provide quality assurance to residential
placements

Approval to seek external residential placement
given by Service Unit Head.

Placement search undertaken by placement
service dedicated officer. Shortlist drawn up,
matching process quality assurance checks on
placement and value for money considerations
undertaken.

Final approval for placement given by Service
Unit Head.

Where joint funding criteria are met referral
made to Joint Commissioning Panel for funding.

Formal contract, service specification and
individual placement agreement signed. The
Standard SW Regional Commissioning Forum
contract is used for all placements.
Reasons for requesting exception to competitive tendering:
The circumstances and nature of each placement are unique to
the assessed needs of the individual child and consequently it is
inappropriate to publicly invite tenders for the provision of their
individual care. In addition the timescales involved in requiring
to purchase a residential placement can be very short – typically
as a consequence of the breakdown of a previous placement.
The small volume and specialist nature of placements required
mean that a block contract, if not financially viable and would not
represent value for money.
The low level requirement for residential placements means that
there would be no interest, or market advantage for the provider,
in an individual preferred provider arrangement specifically with
the Borough of Poole. C & F Unit have worked collectively,
therefore, as part of the SW Regional Commissioning Forum to
develop a provider database. In the next phase of development
of the database, providers will be ‘allocated’ to participating SW
local authorities who will lead on annual contract monitoring.
This will include negotiation on annual fee increase in order to
avoid excessive price increases.
3.
INDEPENDENT FOSTERING AGENCY (IFA) PLACEMENTS
i)
Children and Families Unit spot purchase IFA placements
normally for one of two reasons:
 Temporary lack of general capacity in the Borough’s inhouse fostering service, or
 In response to a specialist fostering need (eg., care of a child
with a complex disability) where the specialist skills required are
not available in-house.
ii)
IFA placement typically cost between £800 - £1,200 per
child, per week. On average Poole has between 6 and 12 IFA
placements at any given time with a steady turnover of short
term placements during the course of a year. The majority of
placements less than 3 months in duration, however, a small
number are commissioned specifically for children looked after
on a long term basis in order to meet a specific need eg
(disability, or appropriate ethnic match).
iii)
Currently providers are identified through a National
Purchasing Directory and through information held by the Unit
on previous IFA placements.
The process for commissioning and approval of IFA placements
is as follows:-
iv)

Assessment and matching report identifies the
need for IFA placement

Search of known provider undertaken by
Placement
Service
designated
officer.
Matching considerations and quality assurance
checks undertaken.

Approval for placement given by SUH

Contract
negotiation
and
agreement
undertaken by Contracts Officer. Standard SW
Regional Commissioning Forum Contract,
Service
Specification
and
Placement
Agreement completed.
Reasons for seeking exception to tender.
Exception to tendering is sought for the same reasons as
residential care providers ie.,
i) The circumstances and assessed needs of the individual child
make it inappropriate to tender publicly for provision of individual
case placement .
ii) The requirement to purchase IFA within a very short timescale
due to emergency situations and placement breakdowns
4.
IFA PROVISION – BLOCK PURCHASING AND PREFERRED
PROVIDER STATUS
For generic IFA placements (i.e., to address capacity issues within
our in-house service) there are cost advantages to be gained over
the spot purchased rates by either seeking a competitive tender
from one, or more IFA’s for the supply of a specified number of
foster care placements, or by offering a preferred provider status to
one, or more IFA’s for an unspecified number of placements.
The disadvantage of a block contract tender is the risk of
committing fundings to IFA beds that may be vacant as the
requirement for placements fluctuates over the course of a year.
This can be mitigated by seeking a low minimum placement number
– but this in turn will reduce the attractiveness of the contract with a
neighbouring authority – which would provide an opportunity to
offset vacancies between each other as and when they occur, but
also greatly increases the complexity of the contract management
task and associated costs.
A potentially attractive alternative to a block contract would be the
offering (via tender) of preferred provider status (PPS) to one, ore
more IFA’s. Although the discount rates that this would attract will
be below those attached to a block contract, PPS offers much
greater flexibility in respect of placement matching and eliminates
the vacancy issue by not committing us to a specified number of
placements.
The proposed course of action, therefore in order to ensure both a
fair and robust access to IFA provider services and value for money
is a two stage one.
i)
Invite any interested IFA provider to become part of an
approved provider list for the Borough of Poole.
ii)
Invited interested IFA providers to apply for preferred
provider status with the Borough of Poole.
The unit Contract officer will lead on the above process within order
to establish both an approved provider list and preferred provider
status for IFA’s during 2007.
Gerry Moore
Head of Children and Families Service