Suffolk County Council is set to put its 16 care homes for the elderly up for sale at time when private care businesses are facing huge problems.
Southern Cross which has 750 homes, eight of them in Suffolk, is demanding rent cuts from landlords of 30 per cent to meet its financial difficulties. It recently said it was on the verge of breaking banking covenants resulting in a 65 per cent drop in its share value (Daily Telegraph).
Other care homes are facing problems too with Anchor, a leading not-for-profit provider with 100 homes (three in Suffolk), telling the Guardian that the average fee for non-nursing care was £550 a week. It was difficult for them to do anything, anywhere for less that £480 but councils were offering £400 take it or leave it.
A Suffolk CC report late last year offered three possibilities: sell all care homes, close all the council’s homes and buy services from others, or sell off 10 homes and close six.
A report to the next cabinet meeting on May 25 recommends recommends inviting “expressions of interest from providers wishing to acquire any or all of the council’s homes for older people and who are able to outline approaches to ensure the availability of required places at reduced costs….”
There would be a further report in February next year outlining proposes terms for sales.
The consultation by the council resulted in 53 per cent of those responding preferring the sale of homes as going concerns.
The report to cabinet says a “flexible approach to property issues will be needed, with regard to both timing and value of any disposals.”
It will also cost £495,000 for a business agenda and there will be transitional costs of about £3.6m over two years. Part of this will be to pay for redundancies. There is reference to cost savings of £49.9m over 22 years.
Local authority care workers have better terms and conditions than those in private sector homes and this is an area where savings can be made.
The decision to sell all the homes is said to have been taken after the consultation and “a detailed market analysis and assessment by the council’s current business agent KPMG”.
KPMG is also working on the restructuring of Southern Cross.
A report in the East Anglian Daily Times yesterday said the six homes threatened with closure were “now likely to remain within the county council.” That raises another question: Who at the county council is spinning confusion at the moment?
The report to the cabinet is here.