Decision details

1.

Title of Item/Report

Powering our Future - Transformation Review: Therapeutic Residential Care for Children Experiencing Mental Health Challenges and Behavioural Distress

2.

Record of the Decision

Consideration was given to a report on Powering our Future - Transformation Review: Therapeutic Residential Care for Children Experiencing Mental Health Challenges and Behavioural Distress.

The purpose of the report was to appraise Cabinet of the successful submission of a bid to the Department of Education’s Children’s Home Capital Programme 2025 to 2029. The bid would provide 50% capital funding to purchase two properties with a total of 3 places, for children experiencing mental health challenges and behavioural distress. The report outlined the proposal for the provision of two homes in Stockton-on-Tees following a comprehensive review, options appraisal and development of a business case. The objective was to address the need for specialist placements within Stockton-on-Tees for the most vulnerable children.

The proposal aimed to build sufficiency within the mainstream residential estate to avoid having to place children in external private provider care, which was often unregulated and costly, providing limited value for money. Providing residential care locally would support better outcomes for children in our care and help give them a better start in life.

The report was an important part of the approach to reducing inequality by prioritising support to enable more children to live within safe and inclusive communities.

The Council’s Mission Statement and wider Powering Our Future Programme, prioritised supporting more children to live in safe and inclusive communities that provide them with opportunities to thrive. This means working differently with communities, to harness the strengths that exist to build resilience and independence.  

In April 2024, Cabinet agreed to a review of Children in our Care as part of phase 1 of the Transformation Programme. This provided clarity on the scope and objectives for the review, in alignment with the Council’s Mission Statement.

The review led to a comprehensive understanding of challenges making use of research, data and intelligence. Findings and drivers for change along with options and proposals were summarised within the report.

Stockton-on-Tees Borough Council faced challenges with a high number of children in care (591 as at 24/09/25) of which there were 71 (as at 24/09/25) in external residential care. Of those children in external residential care, 16 were placed in high-cost placements (over £8,000 per week). The average cost was £11,300, with the highest being £16,000 per week. Most of these placements were unregulated. These were the most costly services and were often out of area.

Recent national, regional and local research undertaken by Newton Europe on behalf of the Association of Directors of Children’s Services (ADCS) validates the need for additional residential placements for children with complex needs. The average weekly cost for residential care had increased significantly between 2020 and 2024 from £4,000 per week to £6,000 per week. However, the cost of placements can increase significantly for those in unregulated provision to over a minimum of £9,000 with no ceiling price for children and young people with extremely high complex needs. The proportion of children in residential care had risen, and there was a notable increase in children entering care aged 10 years and older.

The costs associated with using external providers were extremely high, this was a national issue and not just an issue for Stockton-on-Tees Borough Council. Additionally, the lack of local placements meant social workers must travel long distances to visit children, increasing workloads and reducing the frequency of contact. External providers often serve short notice on placements, causing instability and escalating children's needs, which leads to a cycle of increasingly complex needs and higher costs.

Unregulated residential provision was unlawful and required additional risk management if a child was placed in this type of care. This practice had brought scrutiny from Ofsted, the Department for Education and the Children's Commissioner, highlighting the urgent need for more regulated residential options for children with complex needs. The acknowledgement that changes were required resulted in the Department for Education offering Local Authorities the opportunity to bid for funding from the Children’s Home Capital Programme 2025 to 2029.

Whilst the recently approved Fostering Cabinet paper would support the recruitment of individuals who can develop the requisite skills to care for children with complex needs. There was an acknowledgement that not all children would be suitable for a foster placement, particularly those with significant mental health needs, trauma and challenging behaviours that required a higher staff base such as one to one, or two to one.

The criteria for the capital programme were very specific and restricted and can only be used to provide a service to respond to the needs of children at risk of having their Deprivation of Liberty (DOLs) compromised or at the edge of being admitted to secure mental health units.

Options were appraised based on the grant conditions criteria as follows:-

1.       Do Nothing   

No investment - Stockton-on-Tees Borough Council will continue to rely on unregistered and unstable residential provision, that does not provide a child with complex needs the opportunity to maintain their local networks, access mental health support or have a multi-disciplinary therapeutic response to dealing with trauma all of which leads to poorer outcomes for children.

2.       Provide One Solo Home and One Dual Home (preferred option) This option is recommended due to its balanced approach to investment, support, and whilst the project is expected to be cost neutral rather than making savings, the impact for our most vulnerable children and their families will be more impactful, particularly in relation to caring for the children within their own communities, close to their support networks and with a comprehensive package of support and the right level of access to a multi-disciplinary team to deal with their ongoing traumas.

Providing children with residential services managed and controlled by the Council will offer stability of placement leading to less breakdowns of care. Give those children access to services that they are unable to access when placed outside of the borough, for example health services support, CAMHS and Educational support to improve outcomes.

3.       Provide Two Solo Homes   Develop 2 solo homes for 2 children This option would provide 2 placements for children in our care and would be managed via a cluster arrangement.

The preferred option following evaluation of each and their potential to address the key issues, financial implications, and overall impact on achieving better outcomes for children is option 2: provide one solo and one dual home.

RESOLVED that:-

1. Inclusion in the Capital Programme be approved of a scheme to deliver two Council-run children’s homes (one solo and one dual) providing three places in total, based on current estimated total capital costs of £1.467 million.

2. The Council’s match-funding requirement of £733,500 be met from the existing Council Wide Investment Fund approved by Council in February 2025, utilising prudential borrowing already authorised within that approval, with associated borrowing costs to be met from within Children’s Services budgets through reduced reliance on external placements.

3. The Director of Children’s Services, in consultation with the Cabinet Member for Children and Young People, the Director of Regeneration and Inclusive Growth, the Chief Financial Officer, and the Director of Corporate Services be authorised to:

a.       identify and acquire two suitable properties within the approved budget envelope;

b.       procure and let contracts for design, refurbishment, fit-out and equipment; and

c.        take all necessary steps to register and operationalise the homes in line with the grant conditions and regulatory requirements.

3.

Reasons for the Decision

Cabinet is asked to note the findings and agree the recommendations to ensure that the Council continues to deliver its commitment to the Powering Our Future Missions; to address the financial challenges we face whilst also improving outcomes for children, young people and their families. These include:

•         Empowering communities - increasing individual, family and community level activities.

•         Improving Outcomes: Keeping children within the local area supports their identity, community ties and educational stability. Increasing placement stability through the provision of high-quality services will provide safety and stability to support the transition to adulthood.

•         Cost Efficiency: Investing in the provision and availability of mainstream residential placements will reduce reliance on high cost unregistered external providers that, in the main, provide limited improvement in outcomes and can result in numerous moves increasing instability.

•         Enhanced Support: Enhancing care planning and reducing the impact of trauma by embedding the use of Dyadic Development Psychotherapy (DDP) training and improving access to a multidisciplinary team approach with enhanced support to manage responses to individual needs.

4.

Alternative Options Considered and Rejected

As detailed above.

5.

Declared (Cabinet Member) Conflicts of Interest

None

6.

Details of any Dispensations

None

7.

Date and Time by which Call In must be executed

Midnight, 24 October 2025