Croydon has ended the £8.6m Precious House contract. Children moved there had breakdowns or hospital admissions, and two empty beds cost £11,666 a week.

Croydon Council has torn up a seven-year, £8.57m contract to run a children’s home, less than four months after the first child moved in. Every child placed there had come from a stable arrangement, and every one of those moves ended in a placement breakdown, a hospital admission, or both.

The decision was taken on 7 August by Stuart Collins, the council’s corporate director of children, young people and education. It was published on the council’s decision register on 15 September, five and a half weeks later.

The contract, dated 17 July 2025, was with the charity St Christopher’s Fellowship, and covered a four-bed home the council calls Precious House. It is being ended on three months’ notice, which the contract allows.

What the council’s own report says went wrong

The reasons are set out in the Part A report published with the decision. The council says concerns appeared “soon after commencement of the service” and then got worse.

Four findings do most of the work in that report:

  • All the children placed at the home had moved there from stable arrangements where they had lived for several months. Those moves “subsequently resulted in placement breakdowns and/or hospital admissions”
  • The home “has not had a permanent Registered Manager since registration and service commencement”
  • The service specification was not always followed. The report gives two examples: notice should not have been served on any young person inside a three-month window, and no same-day exits should have happened without the council’s express consent
  • Managers “were unwilling to reverse decisions and work in partnership to find solutions”

The provider did eventually produce an improvement plan. The council’s verdict on it is blunt: it “was devised in isolation and would not have resulted in an improved service at pace”.

On that basis, the report concludes that “reasonable steps to address the concerns are no longer considered viable or effective and confidence in the ability of the provider to deliver the service is lost”.

Eight months to open, and half empty by August

The timeline in the report is unusually tight.

Timeline of Precious House. Contract signed 17 July 2025, mobilisation begins July 2025, Ofsted registration March 2026, first child moves in 21 April 2026, two more children June 2026, termination decision 7 August 2026, decision published 15 September 2026
Precious House, from contract to termination. Graphic by Croydon Today, from the council's Part A report of 7 August 2026.

Mobilisation began in July 2025. Ofsted registration did not arrive until March 2026. The first child moved in on 21 April 2026 and two more followed in June. The council’s own summary of how that went is one word: “mixed”.

One of the four beds was meant to be an emergency resource, holding a child until something more permanent could be found. The report says use of that bed “has not been successful”.

Two empty beds, £11,666 a week

The money matters here, because the home was supposed to save money as well as improve care.

The contract ran for seven years from 2025 at a total cost of £8,572,000, which is £1,216,615 a year. The building itself is a council asset, and the capital cost of creating the home was matched through the Department for Education’s phase one capital funding programme.

The savings were meant to come from placing Croydon children in Croydon rather than buying places from private residential providers. Because Ofsted registration slipped to March 2026, those savings targets slipped with it, into 2026/27 and 2027/28. The report warns that closing Precious House “would result in the savings targets being unachieved, which would create additional pressure on the Children’s Social Care placements budget”.

Meanwhile the home is half full. The report puts the running cost of that plainly: Precious House “is only at 50% occupancy, therefore every week the 2 beds remain empty is costing Croydon £11,666 per week on top of the cost of the fees for 2 young people remaining in private residential care”.

What happens to the children now

Referrals to the home have been suspended. Two children were living there when the decision was taken, and the council says care planning is under way to find both of them somewhere else “at the earliest opportunity”.

The council chose not to shut the home immediately. It considered closing the facility while it re-ran the procurement, and rejected that, because it would delay improvements under its Helping Families Thrive programme and push back the savings. Instead the contract runs on through the three-month notice period so that care continues while children move and a replacement provider is lined up.

Monitoring will be “intensified” in that period, the report says, and unannounced visits by the council’s homefinding consultant social worker have already taken place “to ensure the children are safe”.

The council also acknowledges a risk to itself: that the provider objects and challenges the decision.

What St Christopher’s has said

Nothing, so far. The charity’s news page carries no statement about Precious House or the termination. Its most recent Croydon item is from 13 March, and it is the announcement that the home was opening.

That announcement is worth reading next to the August report. In it, the council’s Children in Care Youth Ambassadors describe choosing the home’s name, the colours of the walls and the affirmations on the walls. Councillor Gatland, then cabinet member for children and young people, said that with St Christopher’s “we have created something that will provide real value and impact for young people in Croydon”.

How the contract was awarded is not in dispute. It went out under the light touch regime of the Public Contracts Regulations 2015 using an open process, St Christopher’s scored highest on both quality and price, and the report records that full due diligence was done.

What it means for you

Croydon still has a legal duty, under section 22G of the Children Act 1989, to secure enough accommodation inside the borough for the children it looks after. Precious House was how it planned to meet part of that duty.

  • For children in care and their families. The council’s own equality assessment warns that where suitable local residential provision is unavailable, children with complex needs face placement at a distance from home, disruption to family relationships, education and local health services, and repeated placement instability.
  • For council tax payers. The savings this home was meant to deliver are now at risk in two budget years, 2026/27 and 2027/28, and the placements budget carries that pressure.
  • If you want to check this yourself. Officer decisions like this one are published on the council’s delegated decisions register, usually with the report attached. This one was recorded as a non-key decision and was not open to call-in by councillors.

A Part B report on Precious House exists but is not public. The council withheld it under paragraph 3 of schedule 12A of the Local Government Act 1972, on the ground that it concerns the financial or business affairs of a particular person. That is where the rest of the financial detail, the additional options considered and the further legal implications sit.

Sources