Croydon will pay consultancy Newton £7.9m to redesign children's services, on top of £1m already spent, and expects £16m a year in savings. Fees are at risk.
Croydon Council will pay the consultancy Newton £7.9 million to help redesign its children’s services over the next two years. The Executive Mayor and Cabinet approved the deal on Wednesday 14 October.
It is the second phase of a contract that began in February. The first phase, a review of how the service works, cost £982,000. That brings Newton’s fees to £8.9 million, before VAT and expenses (Cabinet report: CYPE Strategic Transformation Partner Phase 2).
The council expects the work to save £16 million a year once it is fully running. Newton’s fees are tied to that: if the savings do not arrive, it must keep working for free or hand money back.
What the money buys
The council says Newton will not just give advice. Its staff will work alongside council social workers and managers to test new ways of working, then roll out the ones that work. The report lists the aims as:
- helping families earlier, before problems become a crisis
- bringing schools, early help and social care closer together
- fewer handovers between teams, so families do not repeat their story
- more children staying safely with their families or returning to them
- less use of residential care and more family-based placements
- better use of data, digital tools and artificial intelligence by staff
- home-to-school and SEND transport, if that is added to the contract
Whether transport is included has not been decided. Cabinet handed that choice to two council directors and the lead councillor, Cllr Andy Stranack (Cabinet decisions, 14 October).
What the first phase found
Newton and council staff reviewed 36 children’s cases in detail with 25 social workers. They looked at more than 100 more children in eight “deep dives” and analysed over a million lines of child-level data.
The report says the reviews found:
- 87% of the children reviewed would have benefited from earlier help
- 25% of entries into care may have been preventable
- the number of children in residential care could potentially fall by 14%
In the report’s introduction, Executive Mayor Jason Perry writes: “Our first duty is to protect Croydon’s most vulnerable children.” He says the programme will help “more children remain safely with their families” and reduce “avoidable entries into care”.
Where the savings would come from
The council’s midpoint forecast is £16.0 million a year by 2030/31, or £13.2 million if transport is left out. Over five years it adds up to £52.2 million. The lower “target” figure, the level the work is designed to reach at minimum, is £11.3 million a year.
The biggest lines in the midpoint forecast, each a year at full rate, are:
| Saving | £m a year |
|---|---|
| Fewer children starting in residential care | 3.0 |
| Fewer children entering care | 2.9 |
| Moving children from residential care to family settings | 1.8 |
| Staffing review (the “establishment review”) | 1.8 |
| Transport routes | 1.7 |
| Controlling residential care fees | 1.2 |
| Buying transport vehicles | 1.1 |
The report says the forecasts come from Croydon’s own case reviews, comparisons with similar councils and results from Newton’s work elsewhere.
The full cost
On top of Newton’s fees, the council will spend £2.4 million on its own staff to support the work. Expenses are estimated at 2% to 5% of the contract value; the report’s own estimate is about £196,000 across both phases.
All in, the council puts the cost at £11.5 million, or £11.1 million without transport. It says that gives a return of 4.5 times the outlay over five years.
This year’s costs come from a council reserve for business risks. Next year’s would be included in the 2027/28 budget as a one-off “invest to save” item (Cabinet report, paragraph 9.5). That budget is out for comment from 19 October: see our report on the 2027/28 draft budget.
The fee guarantee
The council says Newton’s whole fee is “at risk”. In practice:
- the fee is fixed once agreed
- if the agreed savings level is not reached, Newton either keeps working at no extra charge or cuts its fee in proportion
- if it reaches 60% of the agreed level, for example, it would refund 40% of the fee
- the council, not Newton, signs off when a saving is real and lasting
The guaranteed savings level has not been set yet. The report says it will be negotiated as the phase two contract is finalised.
Newton was appointed without a competition, through a direct award under a public sector buying framework run by ESPO. The same firm already works with Croydon’s adult social care department. The report says that programme is on target to save £15 million.
What it means for you
If your family has contact with Croydon’s children’s services, the council says you should see quicker help, fewer people to deal with and less need to repeat your story. New ways of working will be piloted before they spread across the service. The report says the council “will remain responsible for ensuring decisions prioritise children’s safety and wellbeing”.
For council taxpayers, the deal is a bet that spending £11.5 million now will save more than that in the cost of children’s care within five years. Croydon still needs government permission to borrow to balance its books, as our budget report sets out.
Sources
- Croydon Council: Cabinet report, CYPE Strategic Transformation Partner Phase 2, decision date 14 October 2026 (costs, findings, savings tables, commercial model)
- Croydon Council: Cabinet agenda and decisions, 14 October 2026, item 11
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