Do nothing. As there will be no framework arrangements, Herefordshire will spot purchase residential children’s home placements as and when required. Spot purchase arrangements are likely to be more expensive than pre-agreed framework rates, as has been demonstrated in the regional framework. There is likely to always be a need to spot purchase some placements in order to meet the specific needs of a child. From January 2015 up to March 2017, 45% of residential placements have been secured via the West Midlands framework agreement, although this currently stands at 29%. To convert all of these to spot purchase arrangements could create significant additional cost pressures.

Commission a Herefordshire only framework agreement. This is not recommended as Herefordshire has relatively low purchasing powers in the residential children’s market. It is more likely that lower costs can be achieved by working collaboratively with regional partners.

Participate in a sub-regional residential children’s home framework. All other West Midlands councils have agreed to renew the framework for 12 months; it would be difficult to identify potential partners to support this process.

To commission residential beds on a block contract arrangement. This option is not recommended as it could result in funding places which are not required. It is unlikely one provider would be able to meet the needs of all our looked after children (LAC) who require residential placements, so alternative provision would have to be sourced on a spot purchase arrangement.

For Herefordshire to operate an in-house residential children’s home service. As there is a small cohort of young people who, due to their needs, require a residential placement, matching needs would be a considering factor. Some of the young people could not be placed together, so operating a small number of homes would not alleviate the need for agency residential placements. This operation would require significant investment in terms of time, resources and funding. Further work would be required to identify costings and ascertain whether this would be a viable option.

There is no negative financial impact. However, the framework agreement enables the council to manage ongoing placement costs.

No financial commitment is made to purchase placements from providers on the framework.

The framework operates on a tiered system based on quality of service and value for money. Placements are purchased from preferred providers following assessment of their ability to meet an individual child’s assessed needs.

The total combined budget for LAC residential and complex needs solution (CNS) is £4.5m for 2017/18, compared to a £4.7m spend in 2016/17. This is against an increase in LAC population from 238 on 1 January 2014 to 301 on 31 March 2017. Whilst spend has been managed, joining the framework in January 2015 has improved service delivery and value for money and achieved savings of £102,000 up to March 2017. It is estimated that a further saving of £60,000 could be achieved during the period April 2017 to December 2018.