Report to the Cabinet Member for Children’s
Services
Date:
7 October 2010
Subject: Three year extension of the contract with
Chelsea Children’s Hospital School to
manage the St Mary’s Hospital Education
Unit and Variations to the contract for
increased service levels and for the
inclusion of Home Tuition for Children with
Medical Needs
1.
Executive Summary and Recommendation
1.1
The contract with Chelsea Children’s Hospital School to manage the St Mary’s
Hospital Education Unit was let in 2007 for three years until 31st October 2010
with the facility to extend the contract for another three years until 31 st October
2013 at a total contract cost of £541,200 for three years and £1,082,400 for
six years. The estimated total cost of the three year contract plus the three
year extension and variations as set out below will be £1,411,388.
1.2
This report seeks Cabinet Member approval of revised commissioning levels
to allow for an increase of 20% in Service Levels and the addition of the
provision of a Home Tuition Service for children with medical needs to the
contract with Chelsea Children’s Hospital School.
2.
Recommendations
2.1
That this report be exempt from disclosure by virtue of paragraph 3 of the
Local Government Act 1972, Schedule 12A, Part 1, (as amended), in that it
contains information relating to the financial or business affairs of any
particular person (including the authority holding that information).
2.2
That approval be given for :
2.2.1 An extension of three years to the contract with Chelsea Children’s
Hospital School (CCHS) and Royal Borough of Kensington and Chelsea
(RBKC) for the management of St Mary’s Hospital School from 1
November 2010 to 31 October 2013 in the total estimated sum of
£870,188;
2.2.2 A 20% increase in service levels and;
2.2.3 A variation to include the provision of tuition for pupils who are not
attending school due to medical needs at a total estimated cost of
£123,000 (£41,000 per annum).
Cabinet Member:
Date:
Classification:
Title of Report:
Report of:
Wards involved:
Policy context:
Financial summary:
Cabinet Member for Children & Young People
7 October 2010
Not For Publication
Three year extension of the contract with Chelsea
Children’s Hospital School to manage the St
Mary’s Hospital Education Unit and Variations to
the contract for increased service levels and for
the inclusion of Home Tuition for Children with
Medical Needs
The Strategic Director of Children and Young
People
All
Provision of Efficient Services
The total estimated cost of the three year contract
extension is £870.188 to include the 20% increase
in service levels and the Home Tuition Service for
children with medical needs.
Report Author:
Ruth Young, Supplier Relationship Manager
Contact details
Ruth Young, Supplier Relationship Manager,
People’s Services,
Telephone 020 7641 1894
ryoung1@westminster.gov.uk
1.
Gate Review Panel Recommendations:
1.1
At Gate 4 Peer Review on 14 July 2010, the recommendation to forward this
report to the Cabinet Member for Children and Young People for the approval
of a three year extension to the contract with Chelsea Children’s Hospital
School and RBKC was approved.
1.2
At Gate 4 Gate Review on 23 July 2010 the recommendation to forward this
report to the Cabinet Member for Children and Young People for the approval
of a three year extension to the contract with Chelsea Children’s Hospital
School and RBKC was approved.
1.3
The recommendation to vary the contract to include the additional funding of
£60,000 per annum for three years (£180,000) to reflect a 20% increase in
service levels was approved.
1.4
The recommendation to include the provision of tuition for pupils who are not
attending school due to medical needs was approved for the annual sum of
£41,000 (£123,000 for three years)
1.5
Gate 4 Peer Review on 14 July also recommended that the relevant break
clauses be included in the Deed of Variation to ensure that budgetary
variances can be accommodated.
2.
Reasons for the Extension
2.1
Under the Education Act 1996, the City Council has a duty to provide full time
education for all children of statutory school age which is suitable for their age,
aptitude and any special educational needs they may have. “All pupils should
continue to have access to as much education as their medical condition
allows so that they are able to maintain the momentum of their education and
keep up with their studies.”
2.2
St Mary’s Hospital Education Unit provides a service for Westminster
residents and other patients whom the City Council has a responsibility to
educate while they are being treated in St Mary’s Hospital. The costs for non
Westminster resident patients are recouped from the relevant home -local
authorities. The Unit was formerly part of a larger service with the Middlesex
Hospital until the Middlesex Hospital merged with Great Ormond Street
Hospital School. Since that time the Unit has existed alone with the support of
an outreach service from the CCHS.
2.3
The Children and Community Services Education Departmental Contracts
Monitoring Board on 16 November 2006, Contracts Review Board on 28
November 2006 and the Cabinet Member for Children’s Services on 19
January 2007 agreed a waiver to the competitive tendering requirements of
the Procurement and Contracts Code to allow negotiations to be held with
Chelsea Children’s Hospital School and the Royal Borough of Kensington
and Chelsea with a view to letting a three year contract (with an option to
extend for a further three years) from 1 November 2007. The Cabinet
Member also approved the general service levels for the proposed contract.
The negotiated contract was awarded to Chelsea Children’s Hospital School
the Royal Borough of Kensington and Chelsea on 3 October 2007.
2.4
The tuition of pupils unable to attend school because of medical needs was
previously provided in house by the Key Stage 3 Pupil Referral Unit (PRU)
based at Beachcroft House. This was due to the fact that a decision had been
made that all tuition in Westminster would be provided by one service. As the
Key Stage 3 PRU provided tuition for some excluded pupils they therefore
were also charged with the responsibility to provide tuition for pupils with
medical needs. However, over time this has changed as it is now appreciated
that the Key Stage 3 PRU is not best placed to provide this service as they
have little or no expertise in providing tuition to pupils with complex medical
needs. In addition, as the service which could be delivered from Beachcroft
House is under-developed and is currently being reviewed, this would require
additional funding to enable the City Council to meet its statutory obligations
for this group of children.
2.5
Accordingly since September 2009 the service has been provided by CCHS
as many of the pupils who receive home tuition are in many cases the same
pupils as those who receive an education in the Hospital School as a number
of them are in and out of hospital for treatment and are not well enough to
return to mainstream education. Also, if a pupil needs medical tuition CCHS
may provide this at home or they may offer tuition in the school room at St
Mary's which is considerably more cost effective and affords economies of
scale. Provision of the service in this way could not be provided by any other
provider.
2.5.1 The extension for a further three year period is recommended as the provision
of this service meets the City Council’s statutory duty to provide an education
service for Westminster residents and other patients while they are in St
Mary’s Hospital. The costs of non Westminster resident patients are fully
recouped from the relevant home local authorities.
2.5.2 The costs associated with the proposed extension are set out in below. There
are no comparable costs for any alternative options as, at the time the
contract was first let in 2007, there was no interest from any of the other
children’s hospitals in London in tendering for the provision of this service.
2.5.3 The costs for this service are paid for by schools in Westminster from the DSG
and, where the children who are receiving the service are non-Westminster
resident, the cost is recouped from the appropriate local authority.
2.5.4 The costs for the core hospital school provision will rise by £60,000 each year
to cover the additional costs of a 20% increase in admissions and an 11% rise
in the number of individual pupils being taught. Within the cohort of pupils, the
number of children with special educational needs (SEN) and profound and
multiple learning difficulties has increased resulting in the need for increased
staffing levels. There has also been an increase in the number of isolation
wards which puts additional pressure on staffing levels.
2.5.5 The number of sessions taught in the hospital school has risen from 3430 in
2007/8 from 3430 to 4263 in 2009/10
2.5.6 The contract with the CCHS demonstrates good value for money as staff can
be shared between both settings and this allows a greater mixture of
professional skills and knowledge to be deployed across both settings. Some
of the pupils are or have been admitted to both hospitals for treatment and this
allows greater continuity for the pupils. In addition CCHS provide a similar
service to RBKC which enables them to provide a flexible service to
Westminster residents.
2.5.7 The service is provided to a very high standard and was recently rated for the
second time as outstanding by Ofsted. The contractor has exceeded the
agreed service levels to provide a service to up to 20% extra pupils and an
increased number of isolation wards.
2.5.8 The original contract was let for three years with the option of extending the
contract for a further three years. Westminster Schools and the Schools
Forum are very satisfied with the service and the quality of the provision and
wish to extend the contract for the maximum possible period and include the
provision of home tuition within the contract.
2.5.9 The contract was awarded following a negotiated process with the CCHS and
RBKC.
2.5.10 There are no deficiencies in the way the requirements of the existing contract
are being met.
2.5.11 The City Council has a contract with Kids for the provision of a home learning
(Portage) service. This service which works with pre-school age children
provides a planned approach to home-based pre-school education for children
with developmental delay, disabilities or other special educational needs. This
five year contract has been let until 31 March 2012. Kids is a charity which
provides a” wide range of direct support services for disabled children, young
people and their families.” They do not however offer educational tuition for
children with medical needs.
2.5.12 Officers have considered if the contracts for Home Tuition (portage) and the
tuition of pupils with medical needs could be combined but there is no
rationale for doing this.
2.5.13 A survey of five central London Hospital Schools has shown that the majority
of the hospital schools provide home tuition for pupils with medical needs who
are resident in their boroughs using the same staff teams. The reasons given
for this are:




Ensures continuity of education;
Staff are used to working with students with medical needs;
Staff are experienced in providing the 1:1 individual work required;
Staff are used to liaising with local schools and hospitals on an individual pupil
basis.
3.
Customer Services Initiative Implications:
3.1
There are no implications for the Customer Services initiative agreement,
corporate contract and/or framework agreements.
4.
Policy Implications:
4.1
The City Council’s external solicitors will be asked to ensure that policy
changes relating to equalities are reflected in the Deed of Variation.
5.
Staffing Implications and Consultation for Clientside:
5.1
There are no staffing implications for the staff at the KS3 PRU.
5.2
There will be no changes to existing in-house contract monitoring
arrangements.
6.
Legal Implications:
6.1
The proposed three-year extension of the existing services is envisaged by
the terms of the existing contract. Whilst there is some increase in the price,
this is to cover increased service levels and therefore the change is not
material (as it does not tilt the economic balance of the contract in favour of
the Contractor). The extension would also therefore be a permissible variation
according to the case of Pressetext. The City Council is entitled to extend the
existing contract for a further 3 years from the contractual expiry date.
6.2
The second part of the variation – i.e. to introduce the home tutoring services
– does mark an expansion of the scope of the existing services. Under
Pressetext principles this could therefore – although would not necessarily constitute a material variation and be the award of a new contract.
6.3
Nevertheless, this does not mean that even if this is the case, such a
variation, if agreed by the Contractor, would be unlawful. The further services
are Part B services (as are the current services) which means that the City
Council is not obliged to comply with the full advertising and tendering
requirements of the Public Contracts Regulations 2006 when appointing a
contractor to do this work.
6.4
In addition, the minimal advertising requirements which stem from the general
EU Treaty principles of transparency, fairness and non-discrimination would
only apply where there is a cross-border interest in the services, i.e. if
economic operators in other member states would be interested in them. The
City Council believes this is very unlikely given the nature of the services and
their value over the three years of the extension.
6.5
Officers believe that there is unlikely to be such interest EU-wide because the
domestic market is so limited given its very local and highly specialised
nature.
6.6
The current Commissioning Manager is of the view that there are no other
known providers to provide the service.
6.7
The City Council therefore does not have an EU or domestic law requirement
to advertise or tender these further services. The City Council is therefore
entitled to vary the existing contract to include these further services. Officers
therefore consider that although there is a risk of a challenge it is very low and
the risk of successful challenge is small.
6.8
Sharpe Pritchard the City Council’s external solicitors will be instructed to draft
deeds of variation to the contract for the extension period.
7.
Business Plan Implications:
7.1
There are no known business plan savings to be made from this contract
extension.
8.
Financial Implications:
8.1
The contract was originally let in 2007 at a total contract cost of £541,200 for
three years and an estimated cost then of £1,082,400 for six years. The
estimated total cost of the three year contract plus the three year extension
will be £1,411,388.
8.2
The increase in the contract price compared to the original bid in 2007 reflects
increases in demand and also the need to cover home tuition. There is a
£60,000 per annum increase in service levels which will be recouped by
income of £40,000 from non-Westminster resident patients plus an increase in
DSG of £20,000. The latter increase in DSG was approved by the Schools
Forum on 14th September 2009. The £40,000 per annum increase in home
tuition for those not attending school for medical needs was also covered by
the Schools Forum approving a top-up to the existing budget of £27,000. Both
these increases in DSG funding can be contained within the final DSG
recently notified by the DfE.
8.3
The costs of the extension and the variations to service levels are set out in
Table 1 below.
Table 1
2009/10
Current
Contract
Costs
Value of
extension
Value of
additional
service levels
Value of
home tuition
service
Revised
Contract
Value
2010/11
2011/12
2012/13
2013/14
April to Oct
£189,063 £110,287
£78,776
£189,063
£189,063
£110,287
£25,000
£60,000
£60,000
£35,000
£17,083
£41,000
£41,000
£23,917
£120,859
£290,063
£290,063
£169,203
8.4
9.
The budget approver is the Head of Schools and Learning and the invoice
approver is the Head of Commissioning - Special Needs and Inclusion.
.
Risk analysis:
9.1
There are no risks arising from this contract extension. Risks were assessed
and addressed in the original contract documentation.
10.
Outstanding Issues:
10.1
There are no outstanding issues arising from this contract extension.
11.
Reason for Decision:
11.1
This contract meets the statutory requirement on the City Council to provide
fulltime education for all children of statutory school age which is suitable for
their age, aptitude and any special educational needs they may have. “All
pupils should continue to have access to as much education as their medical
condition allows so that they are able to maintain the momentum of their
education and keep up with their studies.”
11.2
The current contractor has been performing to a very high standard.
BACKGROUND PAPERS;
Report on Outcome of Negotiations with the Chelsea Children’s Hospital School and
Royal Borough of Kensington and Chelsea for the Contract to Manage the St Mary’s
Hospital Education Unit October 2007
Children’s Services Peer Group Review 14 July 2010
Gate 4 Gate Review Panel 23 July 2010
IF YOU HAVE ANY QUERIES ABOUT THIS REPORT OR WISH TO INSPECT ANY
OF THE BACKGROUND PAPERS, PLEASE CONTACT RUTH YOUNG ON x1894
For completion by Cabinet Member for Children & Young People
Declaration of Interest

I have no interest to declare in respect of this report
Signed ……………………………. Date ………………………………
NAME:

I have to declare an interest
State nature of interest …..……………………………………………......
…………………………………………………………………………..........
Signed ……………………………. Date …………………………………
NAME:
(N.B: If you have an interest you should seek advice as to whether it is
appropriate to make a decision in relation to this matter.)
For the reasons set out above, I agree the recommendation(s) in the report entitled
Three year extension of the contract with Chelsea Children’s Hospital School
to manage the St Mary’s Hospital Education Unit and Variations to the contract
for increased service levels and for the inclusion of Home Tuition for Children
with Medical Needs and reject any alternative options which are referred to but not
recommended.
Signed ………………………………………………
Cabinet Member for ………………………..
Date …………………………………………………
For Ward Specific Reports Only
In reaching this decision I have given due regard to any representations made
by relevant Ward Members.
Signed ………………………………………………
Cabinet Member for Children & Young People
Date …………………………………………………
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Additional comment: …………………………………………………………………
………………………………………………………………………………………….
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Legal & Democratic Services, the Strategic Director of Finance & Performance
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