The Rochdale child abuse case and a failure of procurement

Sometimes stories are just so awful it’s hard to know where to start, or even whether to try . The recent news about the convictions of groups of men for abusing young girls was just one such case. Yet it raises some procurement issues that seem worth airing further.

The Times discovered (behind their paywall) that one of the teenage girls involved had been the only resident of a home – I had no idea these “solo care” homes existed. She was from Essex originally, but was placed in the Green Corns home in Rochdale in 2009, aged 14. Rochdale Council contracted for this home, with an annual contract value of £252,000. That paid for 6 staff who supposedly provided around the clock care for the girl - expect of course it wasn’t “care”, as we would expect it, or around the clock, because they seemed unable to stop her wandering off and getting involved in drugs, sex, prostitution and abuse.

So apart from all the other horrendous aspects of this case, was this a procurement failure? It certainly looks that way. It’s very hard to see that the service as purchased / commissioned was fit for purpose, offered good value for money, or delivered the outcomes required. The Times had other interesting facts, including that this and other similar solo care homes had been bought and sold several times. For instance,

“In 2004 Green Corns, by now operating 30 homes in northwest England, was sold for £26 million to a group headed by 3i, the private equity company”.

Now £26M is way over the underlying property value, and suggests that the market valued each of these 30 homes at around £900K. That in turn suggests that the buyer saw a reliable profit stream of approaching £100,000 after tax per home I suspect, looking at the returns a private equity buyer might expect. That would fit with a business model that says, for a single home, we charge £250K, pay perhaps £120K in salaries, perhaps £30K for food and other running costs – and there’s still enough left for a nice profit.

Reports into this home talked about staff without the right skills and training, so one assumes that these weren’t people paid particularly high wages. From the Times again:

“Ofsted has responsibility for inspecting children’s homes. Records of its twice-yearly visits to the Rochdale home — one of 18 Green Corns solo homes in the town — reveal that staff did not even meet the very basic minimum qualification required for residential childcare. They also show that care workers had no training in the needs of a child at risk of sexual exploitation”.

So, we can question a number of aspects with our procurement hats on.

• Did the commissioners understand the full cost model of the provider, how much was spent on staff, profit levels? And did they feel these were appropriate?
• How was the requirement and the service defined ?
• Were there any performance metrics for the provider, any links between performance and payment or any attempt to link payment to outcomes?
• How was contract management executed – after those Ofsted reports, why didn’t the Council take action?

We’re not having a go at Rochdale here. This was a desperate case, with what sounds like virtually uncontrollable young people, who presumably couldn’t be put in a fostering situation. So we should have sympathy with the commissioners, as well as the kids in question and indeed the staff, carrying out an impossible job.

But this can’t be right. Spending £250,000 plus a year of taxpayers’ money – in a pretty depressed area – to look after one girl, and to fail so comprehensively to deliver even the most basic level of care. £250,000, and the child was drugged and raped by gangs of middle aged men.

And this is where I could get quite annoyed about the attitude of Ministers. There’s a strong argument that commissioning / procurement (we’ll have the argument another day about the difference, if there is one) of social care is the most important procurement issue in the UK public sector today. That’s at several levels, from the growing billions that are being spent, to the wider social effects, potential issues and benefits.

Yet where is the drive from the top to put some effort into this area? Where is the analysis of what works / doesn’t work around the country from a procurement perspective? The promulgation of best practice? Development of innovative solutions, service providers and contracting mechanisms? Training of commissioners and social care procurement staff? The development of contract management standards and reporting?

Meanwhile, Francis Maude and some of the very best brains in public sector procurement are getting stuck in - harmonising the prices of toner cartridges, to keep Sir Philip Green happy, and making sure all Whitehall civil servants book their hotels through the same firm.

Perhaps it’s time there was a discussion about priorities here?

Voices (6)

  1. Dr Gordy:

    Great analysis Pete, thanks.

  2. Rob:

    Good spot Peter, and comments. Will they ever learn? Apparently not..

    For Four Seasons, the outlook isn’t looking good for them either. When it rains, it pours…

    http://www.independent.co.uk/news/business/analysis-and-features/guy-hands-grabs-care-home-group-in-825m-deal-7697768.html

  3. Final Furlong:

    Large areas of commercial activity in social care have, for decades, been out-of-scope for the corporate procurement function (despite ‘social care’ representing circa 40% of a local authority’s total external spend, and climbing…). I know you’re shocked at the notion of £250k for a single care package, but that’s fairly common. Most, if not all, of these care packages are specified and selected by social workers. Much has changed but there is still much to do.

    Historically, the only team focused on national ‘best practice’ initiatives in social care was based in the Department of Health (CSED). On 31 March 2011, it was closed down. Not surprisingly, it was led by an external consultant who managed a large team (120+?) of fellow consultants and contractors. It reported into a couple of civil servants. Sounds familiar?

    Southern Cross went ‘belly-up’ because of being pillaged by short-term venture capitalists (your comment above re 3i?) to be bailed out by the tax-payer. No-one saw this coming.

    There is a massive role for procurement. But, as you say, it’s currently obsessed with getting better prices for toner cartridges, paper and hotel rooms. Focused on the low hanging fruit – while users at the front-line are left hanging by a thread, and, for some unfortunate souls, from their own belts…

  4. Epoch:

    Having been a Rochdale resident for many years this also doesn’t surprise me. My general feeling from when I lived in the borough is of an Authority that is failing on many, many fronts – Rochdale town centre is in terminal decline with many pound shops and charity shops opening up where the likes of BHS, Monsoon, Next etc. used to be, even the McDonalds has closed down amongst rumours of the Council wanting to charge them massive business rates for the whole building they were in rather than as they had before for the space they occupied.

    Back in 2007 I was offered a job (by the Council’s strategic partner which I ultimately turned down) and challenged to ‘drive a coach and horses’ through their procurement department as it was such a poor function- it’s always made me wonder whether that happened but I got the distinct impression that change wasn’t easy or welcomed there, it looks to me like the coach is still being cleaned and the horses are still in the stables.

  5. Dan:

    I was raised in Rochdale, and frankly nothing I hear about that place surprises me.

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