A COMPANY tasked with running children's services on behalf of Worcestershire County Council will lose its contract with the authority and move in-house when it runs out later this year.
Worcestershire Children First - 'wholly-owned' by Worcestershire County Council - launched in 2019 after the authority was forced by the Department for Education (DfE) to find a new way to provide children’s services.
It followed the council's children's services being hit with the worst possible rating of inadequate in November 2016.
Despite the firm taking over in 2019 the county council has always remained responsible for setting and approving the company's budget.
In July last year, Worcestershire Children Services was rated ‘good’ by Ofsted inspectors.
At a meeting of Worcestershire County Council's cabinet on Wednesday morning, (January 10), members approved the recommendation to not extend the contract beyond September 2024, when the contract is currently due to end.
The 2019 contract was signed for an initial term of five years with the option for the council to extend for a further five years from October 1 - but the council has decided to not move ahead with a renewal.
Last year we reported there was a financial blackhole in the budget for Worcestershire Children First, with bosses expecting the ever-growing funding gap to swell up to £23 million by the end of the year.
Councillors appealed to the government to "step up" over social care funding.
The council attributed the budget gap partly due to the number of placements for the county’s most vulnerable children and young people rising, and inflation seeing the price of home-to-school transport rocket.
The report to the cabinet said: "The company has successfully been able to deliver services 2019 – 2022 in budget with a small surplus (profit) in each of the first three years.
"Subsequently, in year 2022/23 and most significantly in the current year 2023/24 the pressures seen nationally in the market for children’s placements has had an adverse effect."
In the listed benefits of the change, the report to the cabinet said: "There would be no requirement for a Director of Resources, a Worcestershire Children First board, chair, or non-executive directors.
"The requirement for corporation tax services - currently provided by KMPG - would also cease.
"There may also be a saving relating to the External Audit Fee.
"Overall, the saving that could be released specifically from the winding down of the company would total £200,000."
Leading county councillor who sits in the cabinet, Marc Baylis, said the company was forced on the council by the government.
"A lot of people didn't think it was the answer at the time," he said.
Cllr Baylis, the prospective parliamentary candidate for the Conservative Party at the next general election, said the council's services were also improving before the company took over.
"It (the change) is a technical matter," he said, adding staff would simply switch to working for the authority after September.
"There will be a saving for the council and the taxpayer."
Councillor Tracey Onslow, cabinet member for education, added: “Bringing children’s services back to the council is the right thing to do.
"The company was set up at a time Ofsted deemed children’s services to be inadequate. Thanks to the dedication of our officers we have seen this rating rise.
"Our officers and service users will transfer back to the council and continue to work tirelessly to deliver quality services and support for the children of Worcestershire.”
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