Lime Legal

Bidding up the risk

Published 28 August 2023

An Edinburgh council bid to cut costs has brought chaos to its homelessness services and put children in danger, reports Tony Marshall.

Services for homeless people in Edinburgh are in disarray after a botched attempt to cut costs led to the collapse of a deal with one of Scotland’s biggest mental health charities – and the closure of a Shelter project for families with children on the ‘at risk’ register.

The Scottish Association for Mental Health (SAMH) was due to take on services from the Edinburgh Homelink Partnership in April after it was awarded the contract as part of a bidding process aimed at multi–million pound efficiency savings. But the deal fell through amid a bitter row over costs that has raised doubts about the way Edinburgh dealt with bodies tendering for homelessness services.

SAMH is now suing the council for breach of contract after it cancelled the deal a week before the charity was due to start work. And other charities – including Shelter Scotland, which lost its contract to provide services for homeless families – have joined the protest about Edinburgh’s management of the reorganisation.

‘The failure of the bidding process has put vulnerable children at risk,’ said Graeme Brown, director of Shelter Scotland. ‘Fifty per cent of the children we dealt with were on the ‘at risk’ register, but those kids are still there – they haven’t gone away.

‘That should be sending alarm signals right across the city council. They should be thinking of it in terms of issues like the baby P case in England. We’ve had the equivalent in Scotland with high profile cases of child abuse and neglect.’

The Shelter families project helped 415 families during the 10 years it operated in Edinburgh. The charity has been forced to close its facility in Newhaven Road and experienced staff with years of expertise in dealing with homeless families have had to be laid off.

‘The project’s clients were by any stretch of the imagination children and families in need,’ Graeme Brown said. ‘They had multiple needs, people who’ve experienced intergenerational homelessness – who had difficulties with debt, issues about domestic violence and kids having difficulties at school along with housing problems.

‘We were having a 96 per cent success rate – according an independent review which found that a year after families’ involvement with the project a lot of their issues had been resolved.’ In January, Edinburgh council set the reorganisation in motion with a £14 million retendering of all homelessness services. The aim was to cut costs by £3.5 million.

Alison Watson, Shelter Scotland’s head of services, said that in the run up to the charity putting in a bid, the council indicated that it was satisfied with the families project and that it expected the project to continue. But when the budgetary constraints imposed by the council for carrying out the work were finally revealed, it became clear that the allocations would not cover the cost of continuing even a highly pared down family service.

The bidding process was also compressed into weeks, rather than months, which gave bidders little time to prepare a full assessment of the costs of meeting Edinburgh’s rewritten demands. The subsequent breakdown has been partly blamed on the haste required to comply with the deadline for tailoring bids to the specifications for the number of hours the work was expected to involve and the maximum hourly payments.

SAMH led a consortium that successfully bid for a number of contracts, which also included projects for rough sleepers. The council’s dispute with SAMH arose over the transfer of staff from decommissioned providers – including staff from Shelter. In the fallout from this dispute, the council cancelled the agreement – and the charity is now suing for breach of contract.

‘Fifty per cent of the children we dealt with were on the ‘at risk’ register. Those kids are still there and that should be sending out alarm signals.’

‘Once everyone knew projects were threatened, we all started haemorrhaging staff,’ said Alison Watson. ‘Staff who had chosen to leave found other jobs and when we knew the contract had been cancelled, we had to start making people redundant.

‘But the legal battle has held up retendering the service, and that is what it needs to do because there’s now a substantial gap in service provision.

‘Until that happens, the council is having to take desperate measures. It has employed some of the people made redundant by decommissioned organisations on six-month contracts to plug the gaps. But obviously there’s not the same overall provision for homeless people in the city. It’s a mess.’

Billy Watson, SAMH chief executive, confirmed that the charity was going ahead with legal action over Edinburgh’s decision to withdraw the contract to provide homelessness services. ‘But as the matter is now in the hands of the court it would be inappropriate to comment further,’ he added.

Graeme Brown said the failure of the bidding process was a tragedy for homeless people in Edinburgh. ‘It’s quite reasonable for the council to use the bidding process to drive efficiencies – we don’t have a problem with that,’ he said.

‘Whether we like it or not we’re in semicompetitive marketplace. But what’s not reasonable is to be claiming to be driving up efficiency, when the sole purpose was to force through a cut of something like £2.5 million. At the heart of this was Edinburgh cutting its homelessness budget, and the council should just say that rather than trying to use the bidding process as cover.’

Mr Brown said the dispute – the first time a council had been sued by a charity over this type of contract – had wide implications for the provision of services in Scotland. It threatened the compact with the Scottish parliament and over local authority procurement, and the way to achieve best value for taxpayers. ‘It completely undermines the relationship between national and local government and the charity sector,’ he said.

Some services run by the charity Streetwork, which welcomed Edinburgh’s reorganisation plans, were given a lease of life. The council pledged further support for two cafes run by the charity which will offer homeless people a step into the world of work.

But the dispute forced the council to take some services inhouse, with social services picking up part of the burden.  ‘The social services department is already under pressure from a rising case load – and however hard they try, the quality and level of service is bound to suffer,’ Graeme Brown said.

An Edinburgh spokesman defended the council’s action, saying: ‘We have successfully tendered seven contracts as part of a major overhaul of services with a new focus on prevention.  We withdrew two contract offers to the preferred bidder following legal advice. These services will be re-tendered soon and in the mean time we will ensure that our customers receive a full service.’

However, the six-month contracts introduced as a stopgap come to an end in September. But until the council’s row with SAMH is resolved, order is unlikely to return to the embattled council’s provision of homelessness services – and homeless people in Edinburgh will continue to face an uncertain future.