Option 1 Continue As Now

Appendix 1 Option 1 Continue As Now Deliverability How Much Will It Cost: Over the 10 year period the conditions surveys indicate capital investment of 1.8m will be required to maintain the homes to their existing standard. Just over 1m is required in the first 5 years. Over the past 2 years, the combined capital and revenue spending on repairs and maintenance, has been in the region of 1,000 per week in each of the care homes. Some savings in the annual repairs budget may arise from a planned investment programme. In terms of revenue, and assuming 2012/13 costs, over the 10 year period the total spend will be 20m. There is limited scope for revenue savings without significant changes in staff terms and conditions. Allowing for the possibility of some reductions in capital spending, the total cost of this option will be in the region of 21m. What Other Investment Will Be Needed? Assuming there are no significant changes in the use of the buildings, no other start up or project resources will be needed. Is It Realistic? This will need to be considered alongside other pressures upon capital and revenue budgets in the medium term. The revenue position for the Council is extremely challenging for the foreseeable future. In 12/13, Adult Social Care was required to achieve savings of c 4.5m. The requirement for 13/14 is 3.8m and up to a further 5m maybe required in 14/15. Any long term commitment to the current care homes increases the requirement to make revenue savings elsewhere and reduces the opportunity to make a capital investment in other parts of the Council In respect of the Capital budget, an application would need to be made to the Capital Board for emergency repairs of 250,000 in 13/14 and 14/15 and the Councils overall capital programme would need to be adjusted for the spend required in years 3 to 5. 1

. How Quickly/Long Will It Take? A commitment to maintain the existing homes for a further 10 years will require an immediate capital investment of 250,000 (mainly Priory House) and further capital investment of 750,000 in the next 5 years. These amounts will need to be built in to the Capital programme in the respective years. The balance of the capital required, c 800k, will need to be built into the capital programme between years 5 and 10. Is It Sustainable for a 10 Year Period? It is difficult to forecast ahead but it would be possible to sustain the service for a further 10 years provided the Council were prepared to effectively ring fence or protect the budget for the care homes. At this stage, it is difficult to predict what impact this may have upon other parts of the Council. A further consideration is the possibility of a challenge on Value For Money (VF M) grounds from external agencies, including independent care homes that are effectively in competition with the Council. Acceptability How Much Disruption Will There Be For Residents, Relatives and Staff? This is the least disruptive option for the residents, their relatives and our staff. Some disruption may occur during major building works (boilers and re-wiring) but initial indications are the works can be scheduled to avoid full closure. Replacing the boilers at Priory House will possibly require the closure of half of the care home and this may result in some residents being moved within the home or moving to another home during the works phase (depends upon occupancy levels at the time). Can this Be Achieved Safely? Yes this option carries the lowest level of risk to existing residents. However, the partial closure of the home does carry some risk and this would be managed in the same way as if a full home closure was required. What Are The Legal Considerations? There are no particular legal considerations within this option. What Are The Views Of Other Partners? 2

We have not formally sought the views of partners at this time. Our NHS colleagues would wish to see cost reductions particularly at Delaware House, as residents there can tip into NHS funding for a part of their residency. The Care Quality Commission (CQC), the regulator of care homes, would expect the Council to make a long term commitment to the homes or to manage their decommissioning in a professional, safe and compassionate way. External care home providers have for many years expressed their dissatisfaction at what they regard as the unfair playing field between Council services and independent providers. Value For Money Does This Approach Save Money In The Short, Medium and Long Term? There are no savings in the short term; in fact an investment of 1m is required in the first 5 years. In the medium to long term some marginal savings maybe possible but these are unlikely to make a significant contribution to the Council s overall savings requirement. Does This Approach Improve Standards Of Care? This approach will maintain current standards of care as the capital investment is focused upon maintaining the existing infrastructure rather than providing new and additional facilities. However, this approach may not meet the expectations of some future residents. Can This Approach Demonstrate Value For Money? In financial terms, this option does not demonstrate value for money as compared to the independent sector this option costs nearly twice as much. In qualitative terms it is difficult to form any objective judgements about our care homes compared to other care homes in the town. Intuitively, from safeguarding alerts, complaints, anecdotal information and other sources, we believe our homes offer better care than most other independent care homes. However, when comparing the outcomes of CQC inspections, (an independent assessment of standards), many independent care homes could challenge our judgement. Strategic Fit Delivers An Excellent Service This option would continue to deliver an excellent service, particularly the continued development of dementia specialist support at Delaware House. Promotes Independence and Social Inclusion 3

Both care homes have established excellent links with the local community and some of the facilities within the homes (laundry and meals) have been used by frail older people living locally. Both care homes have an ethos of social inclusion and promoting independence within the context of the nature of a residential care home offering support to very frail and vulnerable people. Attracts Inward Investment This approach will not attract any inward capital investment. However the nature of the service at Delaware House does mean that some residents during their stay may be fully funded by the NHS. It is difficult to quantify this investment as it varies from resident to resident and from month to month. The Clinical Commissioning Group s financial plan anticipates reduced spending by them on continuing healthcare and they intend to achieve this through developing an accredited provider framework. The Council care homes would not form part of their framework because of our relatively high cost. 4

Option 2 Alternative Ownership Deliverability How Much Will It Cost: On the basis of feedback from the Provider Partnership event, a sale of the homes with current residents, staff and liabilities does not appear to be an attractive commercial opportunity. If TUPE applies providers talked about a negative premium (we give them money to take on the risk) and a cushion period on bed price to enable them to reduce their operating costs. Assuming the cushion period ends by year 5, total revenue spend over the 10 years will be in the region of 15.5m. What Other Investment Will Be Needed? A trade sale would have to be undertaken through the Council s standard procurement procedures. Some project management resources may be needed to take further soundings from the market and to draft the necessary specifications and to oversee the actual transfer of the service. At various stages in the process additional legal and accountancy support may be required. Is It Realistic? On the basis of the feedback from providers this option does not appear to be commercially realistic unless the Council were to make commitments about future risk and bed prices. Giving away a valuable asset, or indeed paying a negative premium, would be unlikely to meet VFM considerations. How Quickly/Long Will It Take? Assuming a relatively straightforward procurement exercise it is anticipated the process would take up to 18 months, allowing 6 months for development and 12 months for procurement and commercial close. Is It Sustainable for a 10 Year Period? At some point in the process the Council will have an exit strategy in respect of any financial commitment to the future purchasing of beds in the homes. This is likely to be 3-5 years after the transfer, on a tapering basis. The winding down mechanism will form part of the detailed work undertaken during the development stage of the process. 5

Acceptability How Much Disruption Will There Be For Residents, Relatives and Staff? This approach will cause anxiety for residents, relatives and staff as they will have concerns about who the new provider may be. The procurement specification will contain safeguards to prevent a transfer to an unfit organisation. As with Option 1, some disruption may occur during major building works (boilers and re-wiring). The procurement specification will require these works to be undertaken with the minimum disruption but the additional costs of phased works will be a factor in any negative premium or cash payment received. TUPE will apply and therefore current staff working in the service will transfer, on their existing terms and conditions, to the new provider. However, the new provider may wish to negotiate changes in terms and conditions, at some point after transfer, for economic or operational reasons. Can this Be Achieved Safely? Yes this option carries a low level of risk to existing residents. However, any partial closure of the home will carry some risk and this will need to managed carefully by the new owner(s). What Are The Legal Considerations? There are considerations in respect of procurement rules and land disposals, particularly if those disposals are below market value. The transfer of the service and staff will need to be managed within the relevant employment legislation. A transfer of ownership will be a significant change and statutory consultation will be required before any decision could be made about adopting this particular option. What Are The Views Of Other Partners? We have not formally sought the views of partners at this time. Our NHS colleagues would wish to see cost reductions particularly at Delaware House, as residents there can tip into NHS funding for a part of their residency. CQC would expect the Council to adopt appropriate safeguards to ensure the new owners could maintain and improve standards in the homes. The new owners will have to meet the CQC fit and proper requirements. 6

Value For Money Does This Approach Save Money In The Short, Medium and Long Term? There are unlikely to be savings in the short term and if the procurement resulted in a negative premium, the risks are either the premium is unaffordable or that the outcome is a failed procurement exercise. Assuming a successful outcome, and a 100% wind down over 5 years, the savings over a 10 year period would be in the region of 4.5m based on all placements in the last 5 years being purchased at the current declared rate ( 430pw). Does This Approach Improve Standards Of Care? Subject to a robust procurement process, this approach will maintain standards of care and possibly lead to improvements if the new owner(s) are able to invest additional capital to extend or improve the facilities on site. Can This Approach Demonstrate Value For Money? In financial terms this option is unlikely to demonstrate value for money during the early years of the contract. The procurement process will require the new owners to demonstrate a sustainable track record of providing high quality long term care. Strategic Fit Delivers An Excellent Service If managed properly this option would continue to deliver an excellent service, particularly the continued development of dementia specialist support at Delaware House. Promotes Independence and Social Inclusion Both care homes have established excellent links with the local community and some of the facilities within the homes (laundry and meals) have been used by frail older people living locally and the procurement specification would require this to be maintained. Both care homes have an ethos of social inclusion and promoting independence within the context of the nature of a residential care home offering support to very frail and vulnerable people and the procurement specification would require this to be maintained. 7

Attracts Inward Investment This approach will attract inward capital investment as the new owners will be required to improve and upgrade the buildings. However, if a negative premium were to apply, the value of any inward investment would be reduced accordingly. 8

Option 3 Re- Provision and Modernisation Deliverability How Much Will It Cost: Based upon the experience of other local authorities, the construction costs of modern 60 bed care home are in the region of 8m. Due to operating costs, most new care homes are larger homes with 60 or more rooms. As Southend has an over-supply of long term care beds there was little appetite at the Provider Partnership event for a like for like modernisation programme simply replacing the existing care homes. However, there was interest in exploring further the potential for a scheme offering mixed use including dedicated care facilities for older people. Unless another Council owned site(s) can be identified, any new facilities would have to be developed on the existing sites. This may require the closure of the home(s) during any demolition and re-build phase. TUPE would not apply as the existing residents will not be transferring to the new service and therefore existing staff would be at risk of redundancy. Redundancy costs are broadly estimated at 1m, ( 500k per home). It is difficult to quantify the actual/total costs of this option as this would largely depend upon what facilities the Council would wish to develop on either site; how the Council would approach the question of sale and/or leases; and the mix the Council would wish to develop on any of the sites. What Other Investment Will Be Needed? Project management resources will be needed to take further soundings from the market and to draft the necessary specifications and to oversee the actual transfer of the service. At various stages in the process additional legal and accountancy support may be required. As this approach would potentially require the closure of one or both homes additional assessment, social work and advocacy capacity would be required to ensure the safe, compassionate and appropriate transfer of the current residents to their new home. Any transfer will be managed in accordance with the current best practice guidance issued by the Association of the Directors of Adult Social Services. Is It Realistic? Further work is required to assess the feasibility of the potential for the development of one or both sites. Informal indications are that the sites do offer potential for a mix of care and other use, particularly on the Delaware site. 9

How Quickly/Long Will It Take? The guidance on care home closures cautions against having firm timelines as the process needs to be managed at a pace which is appropriate for residents and their relatives. As with option 2, the Council s procurement procedures will apply and similar lead in and procurement periods will apply. Is It Sustainable for a 10 Year Period? Yes, assuming a successful procurement outcome the Council will have new facilities/services that could offer extra care housing and short term bedded services. These facilities would be sustainable well beyond a 10 year period. Acceptability How Much Disruption Will There Be For Residents, Relatives and Staff? This approach will cause considerable anxiety for residents and relatives as they will have genuine concerns about how the closure of the home(s) will be managed and the process for safely transferring the residents to a trusted provider. Staff will also have concerns about job losses and their prospects of obtaining alternative work with comparable pay and conditions. Can this Be Achieved Safely? Yes, as experience in other parts of the country has demonstrated that care homes can be closed safely and compassionately. However the process will need to be managed carefully and professionally. What Are The Legal Considerations? There may be Human Rights Act considerations that would need to be taken into account during the process of transferring residents to their new home, particularly if there are any existing long standing friendship groups. There are considerations in respect of procurement rules and land disposals, particularly if those disposals are below market value. Employment legislation will apply to staff who may be at risk of redundancy. The re-build and modernisation option is a significant change and statutory consultation will be required before any decision could be made about adopting this particular option. 10

What Are The Views Of Other Partners? We have not formally sought the views of partners at this time. Our NHS colleagues would wish to see cost reductions particularly at Delaware House, as residents there can tip into NHS funding for a part of their residency. CQC would expect the Council to adopt appropriate safeguards and processes to safely manage the closure of the home(s) and the compassionate transfer of the residents to their new home. Value For Money Does This Approach Save Money In The Short, Medium and Long Term? This approach will save money in the medium and long term as all new long term residential placements will be made in the independent sector. Does This Approach Improve Standards Of Care? This approach will lead to a change in the model of care as it is anticipated any new development would consist of a mix of extra care housing with some short term intermediate care beds. The Corporate Director of Adult and Community Services has a statutory duty to improve standards across all adult social care services, including improving standards in care homes operated in the independent sector. Can This Approach Demonstrate Value For Money? This approach means the Council will no longer directly provide long term care homes and therefore the Council would no longer be paying twice the market rate for this service. Strategic Fit Delivers An Excellent Service If managed properly this option would continue to deliver excellent services in Southend and allow older people more choices about the care they receive as they become increasingly frail. Promotes Independence and Social Inclusion This option does promote independence and social inclusion as both the extra care housing and short term bedded services are intended to enable people to live independently for as long as it is safe for them to do so. Attracts Inward Investment This approach will attract inward capital investment as the modernisation of the site(s) will be based upon a combination of any capital receipts and 3rd party funding. 11

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Option 4 Close One or Both Homes Deliverability How Much Will It Cost: Over a 10 year period the costs of this option equate to the costs of redundancy plus the costs of replacing the beds in the independent sector less the value of any capital receipts received for the sale of one or both sites. The Council purchases 50 beds at the declared rate of 430pw for the entire 10 years, the total cost will be in the region of 11m, including provision for redundancy payments.. What Other Investment Will Be Needed? As this approach would require the closure of one or both homes additional assessment, social work and advocacy capacity will be required to ensure the safe, compassionate and appropriate transfer of the current residents to their new home. Any transfer will be managed in accordance with the best practice guidance issued by the Association of the Directors of Adult Social Services. Additional Human Resources capacity might be required to offer 1:1 support and guidance to the staff affected. Is It Realistic? Yes. There is sufficient capacity in other care homes in Southend for residents and their families to be offered a choice of other care homes in the town. How Quickly/Long Will It Take? The guidance on care home closures cautions against having firm timelines as the process needs to be managed at a pace which is appropriate for residents and their relatives. Is It Sustainable for a 10 Year Period? Yes, as our population forecasts do not predict a significant increase in admissions to long term care homes over the next 10 years and therefore the Council can safely manage a reduction in the total number of long term residential care beds in the town. Furthermore, Council funded residents are coming into care homes at an older age and are living in the homes for shorter periods. 13

Acceptability How Much Disruption Will There Be For Residents, Relatives and Staff? This option will cause considerable anxiety and concern to the residents and their relatives as they will have genuine concerns about how the closure of the home(s) will be managed and the process for safely transferring the residents to a trusted provider. Staff will also have concerns about job losses and their prospects of obtaining alternative work with comparable pay and conditions. Can this Be Achieved Safely? Yes, as experience in other parts of the country has demonstrated that care homes can be closed safely and compassionately. However the process will need to be managed carefully and professionally. What Are The Legal Considerations? There may be Human Rights Act considerations that would need to be taken into account during the process of transferring residents to their new home, particularly if there are any existing long standing friendship groups. There are employment considerations that will also need to be fully taken into account. There are no procurement considerations if the Council sells the sites at market value. This would constitute a significant change and therefore formal statutory consultation will be required. What Are The Views Of Other Partners? We have not formally sought the views of partners at this time. CQC would expect the Council to adopt appropriate safeguards and processes to safely manage the closure of the home(s) and the transfer of the residents to their new home. Value For Money Does This Approach Save Money In The Short, Medium and Long Term? This approach will save money in the medium and long term as all new long term residential placements will be made in the independent sector. 14

Does This Approach Improve Standards Of Care? The Corporate Director of Adult and Community Services has a statutory duty to improve standards across all adult social care services, including improving standards in care homes operated by the independent sector. However, without direct experience of managing and delivering long term care there is a risk the Council would lose the knowledge and expertise to objectively assess standards in independent long term care homes. However, this risk can be managed in a number of different ways. Can This Approach Demonstrate Value For Money? This approach means the Council will no longer directly provide long term care homes and therefore the Council would no longer be paying twice the market rate for this service. Strategic Fit Delivers An Excellent Service The Council would no longer be a direct provider of residential care. Therefore, the emphasis would shift to ensuring we have the skills and expertise to commission excellent long term residential care. Promotes Independence and Social Inclusion This option neither strengthens nor reduces the ethos of promoting independence or social inclusion. Attracts Inward Investment This approach will attract inward capital investment as the sites would be sold at market value and the proceeds used for other Council capital schemes. 15