Nottinghamshire County Council is planning to spend at least £11.5 million a year on outsourcing residential care services for children because of an ongoing shortage of local foster families.
The Conservative-run authority is looking for a company to deliver more care beds for young people in need across the county.
The rising demand comes as the council struggles with a shortage of foster placements because not enough people are coming forward to offer spaces.
The council’s lead member for children and families, Cllr Tracey Taylor, has signed off the planned spending following a report on the issue.
The council expects a new provider to care for 11 children in homes owned by the council. It also wants a company to offer at least 12 more beds, and as many as 39, in their own care homes.
If the number of beds needed goes over 39, the council plans to increase the rollout to a maximum of 80 new beds, extending its spending with the provider to a maximum of £32.5 million a year.
The council plans to enter into a 10-year deal with the company by October 2025 to give them time to develop the number of homes required.
The council says it is “aware of providers opening new children’s homes in the Nottinghamshire area” who may be interested in bidding for the contract, documents say.
A report on the issue reads: “The maximum annual contract value on 1 October 2025 will be dependent on the number of beds available at the start of the contract but will not exceed £11,550,000 (for up to 39 beds).
“The contract allows for growth (depending on the needs of the council); correspondingly, the annual contract value also needs flexibility to grow.
“As such, the maximum contract value per annum will be capped at £32,500,000.”
Figures from March 2024 showed that the combined areas of Derby City, Derbyshire, Nottingham City, and Nottinghamshire had 3,314 children in care.
Of these, only 1,732 children were placed into 592 foster homes, meaning around half of all children in care were without foster placements and were instead in other forms of care, such as children’s homes.
A fostering placement is a temporary arrangement where a child or young person lives with a foster carer or family in their home. Foster carers receive allowances in return of between £170 and £274 per child.
On top of the general shortage, there is also a lack of foster carers available to take siblings, resulting in these children being more likely to go into residential care.
The council is also seeking to enter contracts with smaller providers to house children and young people with the “most complex needs.”
These young people are identified as having the “most barriers” to finding a suitable placement.
The council has a current £6.4 million contract with Homes2Inspire – which owns children’s care homes and delivers fostering services – but this will end on 31 March 2025.
The provider currently supports 30 children across 13 homes, with plans to renovate a further three two-bed homes set to launch in 2025.
The majority of the homes were rated ‘Good’ or ‘Outstanding’ under Ofsted.
In an effort to attract more foster families, last June the council increased its basic foster care allowances by between £10 and £16 a week, depending on the age of a child.
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