The Director of Children’s Services briefly introduced the report which set out the recommendations for the commissioning out of two local authority day nurseries in Tilbury, Little Pirates and Neptune Nursery.

The Interim Strategic Leader for School Improvement further added that this would continue to provide high quality service provision.

Members were advised that staff and parents had been consulted and that the main concerns raised included the quality of provision, staffing futures and that the location and number of places remained the same. The Committee were assured that the TUPE scheme would apply for all staff.

Members were concerned how a private enterprise could save £62,000 in the operation of the nurseries whilst generating a profit, and questioned whether a business plan was in place. Members also questioned how realistic the plans were that a provider could be found in light of the budget shortfall, and why the Council could not make the service more profitable.

The Director of Children’s Services advised the Committee that:

·         It was expected that an external provider could make a capital investment without increasing fees or staff reductions so as to ensure the nurseries profitability and that money could be saved in back office functions. It was reported this was more difficult for the Local Authority which was only responsible for two nurseries, and that a larger provider would be able to make greater savings in relation to back office or administrative functions.

·         In both nurseries the numbers were very good; there was high demand and waiting lists and a demand for funded places.

·         A safety net was also in place so that if a suitable provider could not be found the local authority could keep the nurseries “in-house” until an alternative could be identified.

·         The nurseries were not losing money and that there had been a considerable amount of interest from external providers to bid for the operation of the day nurseries.

·         The Council did not have the capital money required to reinvest into the service to increase profitability.

A Member asked whether by commissioning out the two day nurseries if there was a danger that the Council could become deskilled, to which officers explained that the Local Authority had minimal oversight as this was driven by statutory partners.

Members were particularly concerned that an external provider would be inclined to increase prices. The Interim Strategic Leader for School Improvement explained that there was considerable scope for expansion at both nurseries as there was not enough provision for 2 year olds to meet demand.  It was explained that with greater capital investment a greater profit could be achieved but Members were assured that an affordability factor would be written into the tender. It was further reported that there was not a great amount of variance in the cost of nursery places, as they had to remain competitive, and that a review of prices would be undertaken each year.

Members recognised that the proposal was a sensible idea but were keen that guarantees would be put in place in order to maintain the number of nursery places and guarantee the quality of service provision, to which it was explained that quality would be managed by OFSTED inspections.

RESOLVED

1.         That the committee note the contents of the report, including the recommendations set out below to be agreed by Cabinet on 11 February 2015.

·         That it be agreed to commission out the two local authority run day nurseries in Tilbury as one unit, subject to the service specification, in order to maintain the number of places and service quality.

·         That a full range of early years and childcare services continues to be offered in Tilbury including provision for funded early education for two, three and four year olds.

·         That it be agreed to proceed to tender, as outlined in the commissioning report included at appendix 1.

·         That authority be delegated to the Director of Children’s Services in consultation with the relevant Portfolio Holder to proceed to tender and award the Contract to the successful provider.