Croydon Tendered Children's Home Before Ending Contract

Croydon put its four-bed children’s home out to tender on 24 July, a fortnight before it decided to terminate the contract of the provider then running it. The replacement has now been handed to a new operator without any competition, in a decision signed on 21 September and published two days later.

It follows the council’s decision on 7 August to terminate the seven-year, £8.57m contract with St Christopher’s Fellowship, which we reported on 21 September. Every child placed at the home had moved there from a stable arrangement, and every one of those moves ended in a placement breakdown, a hospital admission, or both.

The tender went out before the termination decision

The procurement timetable is printed in the council’s own report, and it does not read in the order you would expect.

The tender to replace the provider was published on 24 July, a fortnight before the decision to terminate that provider’s contract was taken on 7 August (Part A report, section 5.2.2).

The report does not comment on the sequence, and nothing in it explains why the replacement was advertised before the termination was signed off. Croydon has not published anything on the point.

Who got it, and for how much, is not being published

The name of the new provider and the value of the contract are in Part B of the report, withheld under paragraph 3 of Schedule 12A of the Local Government Act 1972, which covers a person’s financial or business affairs. The council says both will be published after the contract is awarded, “in accordance with usual practice”.

What is on the public record:

• the contract runs for 12 months with an option to extend by six, so up to 18 months
• it is an interim measure while a full tender is run for a longer-term operator
• it is a key decision because the total value is over £1m
• three providers were approached, and the council says only the chosen one “has the capacity and capability to mobilise at pace”
• the chosen provider’s costs are “slightly higher than those of the incumbent provider”

The legal basis given for skipping competition is “extreme and unavoidable urgency”. The council’s stated reason is that waiting for a full procurement would mean failing its sufficiency duty and missing the savings the home was supposed to deliver.

The home is not due to open until December

The published timetable puts mobilisation across October, November and December 2026, with the home opening on 1 December 2026 and that date marked “Ofsted dependent”. The report also allows for a mobilisation period of three to six months “to ensure the home is operational at the point of contract commencement”.

That matters because Ofsted registration is what held the home up the first time. The original contract was awarded in July 2025 at £1,216,615 a year for seven years, a total of £8,516,305. Mobilisation cost a further £56,000. The home did not achieve Ofsted registration until March 2026, which the report calls “much later than anticipated”. The first child moved in on 21 April 2026 and two more followed in June.

The council lists the risk of a repeat plainly: “There is a risk that delays in Ofsted registration of the home will further delay the re-opening.” Its mitigation is regular contact with Ofsted and the fact that the new provider has already identified a registered manager, which the report calls “the most challenging position to fill”. The previous operator never had a permanent one.

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Why the council will not just run it itself

The report considers and rejects two alternatives, and the reasons are worth reading.

Running the home in-house was rejected because the council “does not currently have the necessary capacity and capability”, would have to recruit a registered manager and residential staff from scratch, and would keep the home closed for longer. It also notes that an in-house team “would be difficult to reverse if performance was not as expected”.

Doing nothing and buying placements on the open market was rejected partly on cost and partly on a detail that has not been reported elsewhere: the refurbishment of the property was match-funded by a Department for Education capital grant, and that grant would have to be repaid if the home did not operate.

The sufficiency problem behind all of this

The report sets out why the council wanted its own home in the first place, quoting Ofsted’s October 2024 inspection:

• Croydon has the largest under-18 population in London
• it has the highest number of children in care in London
• around 1,200 children in care are placed in Croydon by other local authorities, which the report says exacerbates the shortage of provision in the borough

The council says that without its own provision it is “disproportionately beholden to market forces”, which pushes children out of the borough at higher cost. That pressure shows up in Wednesday’s Cabinet finance report as a £1.7m placements overspend against a £49.7m budget, and a single most expensive placement costing £14,004 a week. We cover those figures in our report on Croydon’s SEND and budget position.

What it means for you

If you have no connection to children’s social care, the relevant fact is the money. A home built with Department for Education capital funding and designed to cut Croydon’s placement costs took from July 2025 to April 2026 to admit its first child, lost its operator in August, and is not scheduled to open under the new one until 1 December.

If you work in the sector or are a foster carer in Croydon, the practical point is the timetable. The council intends to run a full, competitive tender for a long-term operator during this interim contract, so the opportunity is expected back on the market inside 12 to 18 months.

The decision comes into force on 2 October unless it is called in, with a call-in deadline of 1 October (decision 2795). Croydon publishes every officer decision of this kind on its decisions register, which is free to search.

Sources

• London Borough of Croydon, Decision 2795: Children’s Home Service Provider Direct Award, 21 September 2026, published 23 September 2026
• London Borough of Croydon, Part A Procurement Direct Award Children’s Home Service (the timetable, the original contract value, the Ofsted dates, the options appraisal and the sufficiency figures)
• London Borough of Croydon, 2026-27 Period 3 Financial Performance Report, Cabinet, 23 September 2026 (the placements overspend and the weekly placement cost)