CROYDON COMMENTARY: The collapse of a multi-million-pound contract to manage a children’s home in the borough has exposed the flaws in the procurement process and sunk Mayor Perry’s claims of running a ‘more efficient’ council.
Green Party councillor NATALIE VESTY, right, on why the arrangement went so seriously wrong
A £8.57million, seven-year contract for a children’s home was cancelled within six months of the home opening. So why did things go so wrong? The answer lies in the model: Croydon built a children’s home and handed someone else the keys.
Got it wrong again: a £8.7m council contract collapsed in just six months
The council-owned building is supposed to serve as a home for children with complex needs.
On March 13, Mayor Jason Perry announced its opening, a partnership between Croydon Council and St Christopher’s Fellowship, “a charity that helps create brighter futures for children and young people in care”.
The council said the agreement would provide “short- to medium-term support… helping children return to family life or move into local foster care… to avoid long-term stays in care”.
Mayor Perry called it part of becoming “a more cost-effective and efficient council”.
It appears that the council’s new children’s home has failed in every aspect of those claims.
The tender was run under the council’s “light touch regime” as an open process, so any provider could bid, and it was weighted heavily towards quality. Bids were scored 0 to 5 by seven evaluators, including two “care-experienced young ambassadors”, with a minimum score of 2 for every section.
Croydon set strict standards and “put the voice of the child in the room”. St Christopher’s, a long-established charity, scored 86.53% on quality and price combined, against the runners-up’s 63%.
Only four providers bid and only two passed the standard selection questionnaire stage. Croydon was already up against it, trying to find an adequate provider in a fragile market. A weak response to such a large, openly advertised contract might have been a red flag it could have heeded earlier.
So the flaw was not necessarily the choice of provider, but the model.
Croydon part-funded the refurbishment of the building with a Department for Education capital grant. But that covered only the bricks and mortar. Operating and managing the home fell to the council.
And here is where Mayor Perry’s “cost-effective and efficient council” statement becomes interesting, because the decision was taken not to run the home in-house but through a third-party provider. The rationale: why run it yourself when a specialist can do it more cheaply?
Therein lies the flaw, the market isn’t working that way.
It would be easy to frame this as a story of a provider ripping off a council. But St Christopher’s is a charity, so the profit angle shouldn’t apply. On the council’s account, it was ill-equipped to deliver, despite a bid weighted so heavily towards quality of care.
And it failed badly. Croydon pulled the contract after six months. They gave St Christopher’s no time to turn things around, which may suggest how serious the situation was, and the council’s official report supports this.
Two children were still staying at the home when Croydon acted. The children, the report says, had been moved from stable arrangements they had lived in for months into placements that then broke down, in some cases ending in hospital admission.
The home’s very purpose was to move children towards their families or into local foster care. It did the opposite. The impact on those children cannot be overstated, they went from stability to this in barely six months.
The council report gives further context: no permanent registered manager for the entirety of the home’s operation (something which St Christopher’s disputes), staffing shortages, inexperienced staff and managers, and, perhaps most damning, managers “unwilling to reverse decisions and work in partnership to find solutions”. Let that sink in.
Children ended up in hospital and their placements collapsed and, the report says, those running the home were unwilling to work with the council to put it right. Croydon is these children’s “corporate parent”. If you placed your own child in a home so unstable their care collapsed, could you say you’d done right by them?
The process built to safeguard children failed, and this is the real indictment: of the system and the market behind it.
St Christopher’s, in a statement issued this week, strongly disputes the council’s account.
The charity says the home did have a registered manager in place from registration, that staffing did not stop it operating effectively and that it responded constructively to concerns and tried to work collaboratively with the council.
It also says the children typically arrived following an earlier placement breakdown or a move from unregulated services. Not, as the council report frames it, from settled homes. A recent Ofsted visit raised no major concerns, with the full report still to come. St Christopher’s chief executive is now challenging the council’s version formally.
So there are two sharply conflicting accounts of what happened to children in Croydon’s care. Establishing which is right is not something to take on trust from either side. It is exactly what the council’s scrutiny sub-committee must get to the bottom of.
Then there is the money. Croydon committed £8.57million over seven years, roughly £5,850 per week per child when the home is full. Yet it never got beyond three of its four beds filled, and by the time of the report, it was half-empty: £11,666 a week on empty beds for no benefit, while two young people who could have used them were in private care elsewhere, costing Croydon again.
One would hope there was a contractual term to avoid paying for long-term empty beds, because otherwise, what incentive did the provider have to fill them? Which raises an obvious scrutiny question: what performance standards or penalties were written into the contract?
Where did it all go wrong: Mayor Jason Perry (second left) and director of children’s services, Stuart Collins (right) with St Christopher’s officials at the opening of the home in March 2026
Croydon Council’s financial problems are well documented. Croydon is also home to London’s largest child population, so demand for children’s services is high. That is not, in itself, a bad thing. The council’s children’s services’ latest Ofsted rating is “Good”, a real turnaround from the “Inadequate” rating it received in 2017.
Croydon says it is investing to secure good outcomes. What troubles me is that the investment goes into arrangements where Croydon carries all the risk, financial and reputational, while a provider it cannot control carries little. If Croydon is going to shoulder that risk anyway, why not go all the way and bring these services fully in-house?
That would not go against the grain nationally. Quite the opposite. From the DfE funding used here, to the Children’s Wellbeing and Schools Act 2026 (which caps provider profits and pushes councils to plan and build provision together), national policy is moving towards more public control of children’s care, not less.
So what now? As a councillor on the council’s children and young people scrutiny committee, my focus is on how Croydon reclaims control. I am not questioning the decision to end the contract, the situation sounds dire and beyond rescue. But Croydon entered it precisely because outsourcing is meant to place responsibility with the provider. So first, I want to see Croydon try to recover money from a provider that, on the council’s account, failed in its duty of care.
Second, I would welcome a review of the tender process, and of whether Croydon should be outsourcing this care at all. For a provider to score so well and fail so spectacularly and so quickly exposes how flawed the system is. A rigorous process and a “Good” Ofsted rating count for nothing if there is nobody able to meet the standards.
This is not small-fry stuff. These children do not get a second chance at childhood, and they have been failed.
It falls to Croydon now to retrieve what it can and review its strategy in full.
- Click here to read the statement from the St Christopher’s Fellowship
- Click here to see the council’s contract termination report
- Natalie Vesty is a professional singing coach who in May was elected as a councillor for Crystal Palace and Upper Norwood ward. She sits on the council’s children and young people scrutiny sub-committee. She is a member of the Green Party
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I think regardless of whether the children’s home was run in-house or by an outside provider, problems like these can arise.
But isn’t the point, Moira, that by outsourcing, while those risks remain, the council has ceded control?
Interesting response to a damning indictment of the failure to look after children (not to mention our money); a metaphorical shrug of the shoulders and a “shit happens” stance
Lets wait for the Ofsted Report
It is an unfortunate fact that whether it’s a private contractor or council controlled, audit is required regularly to make sure that the service is being provided properly.
You just cannot set up a scheme and expect it to run itself as you expect. If a private company, written into the contract should be the quality standards you expect and meeting review dates should be set and contract termination if things do not go right.
This council should’ve learned this from its now long history. Just to remind you that was Brick By Brick and the maintenance of council homes, remember Regina Road, both of which were inadequately monitored and audited.
But there was no audit or inspection from the council! We still haven’t seen the Ofsted inspection outcome so all these claims seem very premature and may look really bad for Croydon if Ofsted say opposite. Looking forward to this
I nearly forgot the bus stop fiasco!!!!!