This report asks the Committee to make recommendations to Council following a review of the performance of Brighter Futures for Children Limited in delivering Children’s Services and an assessment of future options.

The Committee considered a report setting out a review of the performance of Brighter Futures for Children Limited (BFfC) in delivering Children’s Services and an assessment of future options.  Attached to the report at Appendix 1 was a report from CIPFA on the Assessment of Options for Children’s Services and at Appendix 2 a Statement of Support from the BFfC Board.

The report noted that, under the direction of the Secretary of State, the Council had established BFfC on 1 December 2018 as a company limited by guarantee to deliver Children’s Services (Social Care and Education) through a seven-year service contract which had come into effect on 30 November 2018 and would expire on 1 April 2026.  The contract stipulated that BFfC be given notice of the future for the contract by 31 March 2025 and that a review of the performance of the contract be carried out to inform the Council’s decision.

The report explained that a review of the performance of the contract had been overseen by the Contract Management Group, who managed the BFfC contract on behalf of the Council, and including officers from both the Council and BFfC.  The Chartered Institute of Public Finance and Accountancy (CIPFA) had been engaged as an independent consultant to validate the review of performance and to carry out an Assessment of Options for future delivery of Children’s Services.  The report produced by CIPFA, which was attached to the report at Appendix 1, set out four options of which two were considered to be viable: Option 1 was for renewal of the contract with BFfC for continuing delivery as a local authority-controlled company, with a review of governance arrangements, and Option 2 was to not renew the contract with BFfC and to bring delivery back in house to be managed by the Council, supported by an Improvement Board.  The report summarised the advantages and disadvantages, required transition activities and associated costs of the two options.

The report explained that CIPFA’s recommendation was that delivery of Children’s Services be brought back in house (Option 2) on the basis that it provided the Council with better direct control of Children’s Services, removed a layer of governance and so increased visibility of Service performance likely leading to ‘more agile decision making’ and removing duplication in reporting, removed the pressure on Council services of maintaining Service Level Agreements, and improved integration and synergy with other Council services, joining up decision-making, innovation and improvement.  CIPFA had noted that the current delivery model was no longer ‘the norm’ and recognised the ‘increased maturity’ of both the Council and Children’s Services in 2024, compared to 2018, which meant that Reading was in a good position to take Children’ Services back in house.

The report explained that the BFfC Board had considered CIPFA’s report at their meeting on 26 September 2024 and had provided a statement accepting and supporting the recommended option, which was attached to the report at Appendix 2.  The Statement also reflected that alternative delivery models for Children’s Services had become less popular in recent years and were now very rarely the preferred option in response to statutory intervention.  The Board had noted that the implementation of any option would need to be managed in a way that maintained and supported the continuous improvement in the full breadth of services currently delivered by Brighter Futures for Children, maintained stability of service, managed key risks, was communicated effectively, and expedited the process as quickly as possible.

The report noted that bringing the service back in house did not in itself guarantee the delivery of the Council’s aspirations for Children’s Services.  The Company currently had a significant transformation plan in place to address cost pressures and better manage demand, as well as an action plan in place to address the issues identified by the latest Ofsted inspection of Children’s Services.  It was therefore recommended to establish an independently chaired Improvement Board to provide scrutiny and informed input to ensure effective delivery of these plans.

Resolved –

That the following be recommended to Council:

a)    That the contract with Brighter Futures for Children Ltd (BFfC) to deliver Children’s Services not be extended beyond 31 March 2026 when it was due to end;

b)   That by 1 April 2026, services currently provided by BFfC, including all remaining support services, be brought in house to be delivered directly by the Council;

c)    That the Executive Director of Resources, in consultation with the Leader of the Council, the Lead Councillors for Children and Education, the relevant statutory officers and Chair of the Board, be authorised to:

                                         i.    Transfer all staff from BFfC to the Council;

                                        ii.    Remove the secure designated pension arrangements between BFfC, the Council and the Pension Fund;

                                      iii.    Novate all BFfC contracts to the Council;

                                      iv.    Take all steps legally required to close the BFfC Company;

                                        v.    Make any changes required to the Terms of References for Committees to reflect the change of delivery model and remove reference to the Company and contract within the Lead Councillor portfolios;

                                      vi.    Make any other necessary amendments to the Council’s Constitution and Scheme of Officer Delegation to reflect the changes of the delivery model;

d)   That the Executive Director of Economic Growth and Neighbourhood Services, in consultation with the Leader of the Council, the Lead Councillor for Children, the Lead Councillor for Education and Public Health and the Chair of the BFfC Board, be authorised to transfer all property held by BFfC under lease arrangements back to the Council and arrange for the leases to be surrendered;

e)    That the Executive Director of Children's Services, in consultation with the Leader of the Council, the Lead Councillor for Children and the Lead Councillor for Education and Public Health, be authorised to:

                                         i.    Close the Independent Fostering Agency and transition this to a Local Authority Fostering Service

                                        ii.    Make all relevant changes to all Ofsted registrations

f)     That the Chief Executive, in conjunction with the Chair of the BFfC Board and in consultation with the Leader of the Council, Assistant Director of Legal and Democratic Services and Executive Director of Children’s Services, set up an independently chaired Improvement Board including developing its Terms of Reference for noting at Council;

g)   That the Assistant Director of Legal and Democratic Services be authorised to execute all legal documents that were necessary to give effect to the above resolutions;

h)   That the cost of transition be funded from earmarked reserves.