MD1417 GLA-commissioned rough sleeping services 2015-16

Type of decision: 
Mayoral decision
Code: 
MD1417
Date signed: 
30 January 2015
Decision by: 
Boris Johnson MP (past staff), Mayor of London

Executive summary

The GLA currently commissions and grant funds a range of pan-London rough sleeping services and projects, with funding devolved from the Department for Communities and Local Government for the period 2011 to 2015. As the next funding round is for one year only (2015/16), approval is sought to extend six of the GLA’s contracts for these services for one year, and to enter into one year grant agreements in respect of the Severe Weather Emergency Provision and Streetlink projects. Doing this, rather than undertaking a competitive procurement, will ensure continuity of service and value for money during 2015/16, to assist with the achievement of the Mayor’s rough sleeping policy aims. The cost of the extended provision of services and grant funding in 2015/16 will amount to £8.37 million - £8.16 million for the contracted services and £155,000 for those funded under grant agreements.

Decision

That the Mayor approves:

a) 12 month extensions and corresponding expenditure (until 31 March 2016) of the GLA’s contracts with:

(a)   St Mungos Broadway - No Second Night Out/No Living on the Streets              £3,680,000

(b)   St John of God - Non UK Nationals Service                                                       £432,173

(c)   Thames Reach - London Street Rescue                                                             £609,173

(d)   Thames Reach - London Reconnections Team                                                   £362,353

(e)   St Mungos Broadway - CHAIN and Clearing House                                             £397,693

(f)    One Housing/Look Ahead - Tenancy Sustainment Teams                                 £2,734,709

 

b) The award of grant funding for one year (until 31 March 2016) to:

(g)   St Mungos Broadway - Severe Weather Emergency Provision                                  £95,000

(h)   St Mungos Broadway - Streetlink                                                                            £60,000

Part 1: Non-confidential facts and advice

Introduction and background

1.1    Among the Mayor’s key aims in his London Housing Strategy are to ensure that no one will live on the streets of London and no individual arriving on the streets will sleep out for a second night. Since early 2009, the Mayor has convened a board that brings together key partners to identify timely, appropriate and sustainable solutions to rough sleeping in the capital (initially the London Delivery Board and now the Mayor’s Rough Sleeping Group). 

1.2    In recognition of the Mayor’s commitments and the then London Delivery Board’s achievements, and as part of the localism agenda, the responsibility for commissioning pan-London rough sleeper services was devolved to the GLA from central government in April 2011.These are services for rough sleepers, or initiatives to tackle rough sleeping, that cannot or would not be provided at a London borough level, as they are pan-London or multi-borough in their remit. The Mayor has invested a budget of £33.8 million for these services over 2011-15. 

1.3    Following several procurement exercises, a range of services are under contract, with some being piloted under a grant agreement, mainly to test new approaches to working with rough sleepers. Details of all services currently under contract or grant agreement are set out in Appendix 1. All current contracts and grant agreements are due to expire on 31 March 2015.  

1.4    The pan-London services have been successful in achieving the Mayor’s strategic aims. For example:
•    No Second Night Out (NSNO) has seen more than 5,890 people between April 2011 and 30 June  2014. Only 20% of this cohort spent a second night out, which has meant that the service has had a positive impact on 80% of clients. 
•    No Living on the Streets (NLOS): Between December 2012 and 30 June 2014, 76% of the 419 clients seen by NLOS did not return to rough sleeping.   
•    During 2013/14 
•    the Tenancy Sustainment Teams successfully sustained the tenancies of over 1,860 former rough sleepers
•    the London Reconnection Team reconnected around 550 people to the country with which they had a connection.  
•    the accommodation-based service for non-UK nationals reconnected over 350 people  
•    London Street Rescue, the pan-London outreach service, found 26% of those who were seen rough sleeping.

1.5    Over 6,500 people were seen sleeping rough by outreach workers in 2013/14, around two thirds of whom were new to the streets - around the same proportion as in 2012/13.  

1.6    There is indicative funding of £8.45 million earmarked in the GLA’s 2015/16 budget for rough sleeping services. This funding will be covered by DCLG’s revenue funding to the Authority, with formal confirmation of the total settlement currently awaited. In a draft settlement letter to the GLA, DCLG sets out its expectation that £8.45 million of the 2015/16 grant will be used for the continuation of pan-London rough sleeping services.  

1.7    DCLG’s revenue settlement is for one year only. For this reason, a 12 month extension of current contracts and making of two one year grant awards (listed below) are proposed. The intention is that a full competitive tender process for services will be conducted for 2016/17 onwards.

(a)    St Mungos Broadway - No Second Night Out/No Living on the Streets     £ 3,680,000
(b)    St John of God - Non UK Nationals Service                                              £ 432,173
(c)    Thames Reach - London Street Rescue                                                    £ 609,173
(d)    Thames Reach - London Reconnections Team                                          £ 362,353
(e)    St Mungos Broadway - CHAIN and Clearing House                                    £ 397,693
(f)    One Support/Look Ahead - Tenancy Sustainment Teams                         £ 2,734,709
(g)    St Mungos Broadway - Streetlink (grant funding)                                          £ 60,000
(h)    St Mungos Broadway - SWEP (grant funding)                                              £ 95,000

1.8    Contracts (a) to (f) above all have an option exercisable at the discretion of the GLA to extend for at least a year after 31 March 2015. There are grant agreements in place for 2014/15 for both Streetlink and SWEP and it is proposed that new ones will be issued for 2015/16. All contracted services were procured competitively in accordance with the GLA’s Contracts and Funding Code.

1.9    Extending the contracts and awarding new grant funding would be far better value for money than re-procuring for one year only. This is because procuring services competitively for such a short contract period is unlikely to attract bids from organisations other than those currently providing the service, given the high start-up costs and the requirement for buildings for services such as these. If any bids were to be submitted by other organisations, they are highly unlikely to represent good value for money. The reason for this is that services such as these require a great deal of upfront investment by the providers to secure buildings (as some are building-based services) and to mobilise (they are also extremely staff-intensive, so would require major recruitment and induction exercises). 

1.10    In addition, it is becoming increasingly difficult to secure buildings for homelessness services, both because of a lack of suitable available premises and also because of some boroughs’ reluctance to accommodate additional services of this type in their localities. Providers are unlikely to invest the time, effort and potentially money in building searches and negotiations with local authorities for a very short contract period. 

1.11    The inability to spread start-up costs across a number of years inevitably leads to higher costs. A competitively priced bid would almost certainly mean an unacceptably low level of service and, as a consequence, poorer outcomes for clients and a negative impact on the achievement of the Mayor’s rough sleeping targets.

1.12    Another option would be to re-procure services on a single source basis. However, there is a risk that this could result in higher costs, as the incumbent providers would not be in competition with other organisations.

1.13    It is necessary to obtain approval to extend contracts in advance of the GLA’s budget setting process for 2015/16 in order to ensure that there is service continuity. It is essential that providers have certainty about the GLA’s future funding programme within the next couple of months, to prevent staff from seeking other jobs, providers from issuing redundancy notices and winding down services and clients transitioning into other services prematurely or drafting back onto the streets. 

Objectives and expected outcomes

2.1    These services contribute to key performance indicators to ensure:

•    80% of individuals exit rough sleeping as a result of GLA funded services (excluding the SIB)    
    
•    90% of new rough sleepers do not spend a second night out as a result of the GLA funded NSNO service

Equality comments

3.1    Of those seen rough sleeping in 2013/14:
•    54% were non-UK nationals
•    46% had a mental health need
•    13% were women
•    most of those seen rough sleeping (57%) are in the 26-45 age group
•    12% were under 26 years old
•    10% were over 55
•    11 people were under 18.

3.2    As rough sleepers are over-represented among those with the protected characteristics of race and disability, the proposals in this paper are likely to have positive impacts on these groups.

Other considerations

4.1    Key risks and issues 

Risk description

 

Rating

Mitigating action

 

Uncertainty amongst providers will damage service provision

Green

It is proposed that contract extensions and grant agreements will be signed in early 2015, before providers would be starting to demobilise services. However, any delay to this could be detrimental to service provision. 

Other organisations providing rough sleeping services may argue that a competitive process should be undertaken.

Green

The GLA will clearly communicate reasons for the one year contract extensions and grant agreements to partners.    

4.2    Links to Mayoral strategies and priorities 
The objectives of the proposals are in line with the Mayor’s Rough Sleeping Commissioning Framework 2011-15, as well as the Mayor’s draft revised London Housing Strategy which includes the following priorities: to ensure that no one will live on the streets of London and no individual arriving on the streets will sleep out for a second night. 

4.3    Impact assessments and consultations 
The Mayor’s Rough Sleeping Commissioning Framework 2011-15 was made available for public consultation. The statutory London Housing Strategy has been subject to a full-integrated impact assessment and undergone statutory consultation with the London Assembly and functional bodies and with the public.

 

Financial comments

5.1    There is £8,450,000 earmarked for rough sleeping in the current 2015/16 draft budget to fund this expenditure within 2015-16.

5.2    The confirmation of this funding is subject to the finalisation and sign-off of the 2015-16 budget.

5.3    All requisite budget adjustments will be made.

5.4    As part of this decision relates to contracts, officers have to ensure that the requirements of the Authority’s Contracts and Funding Code are adhered to.

5.5    Any changes to this proposal must be subject to further approval via the Authority’s decision-making process.

5.6    The Programme, Policy and Service Unit within the Housing and Land Directorate will be responsible for managing this project.

Investment and Performance Board

This item was discussed and agreed at the Housing Investment Group on 10 October 2014. All members were supportive of the approach and expressed an interest in being involved in a more detailed conversation on the future of services (and interaction with borough responsibilities and services). Rough sleeping services will be discussed at the January 2015 Homes for London Board meeting. 

Planned delivery approach and next steps

Activity

Timeline

Mayoral decision

Mid-January 2015

Contract extensions/grant agreements executed

January 2015

Contract/grant agreement commencement dates

1 April 2015

Delivery start date

1 April 2015

Delivery end date

31 March 2016

Appendices and supporting papers

See attached