Care homes sold for £3.2m, but council to wait for cash
Council bosses have completed the £3.2 million sale of nine care homes to a private firm, but told the company it can wait a year before it pays the majority of the cash.
Yesterday, Leicestershire County Council agreed to transfer the homes for the elderly to Essex-based Southend Care and took a £100,000 downpayment to seal the deal.
The Tory-run council has agreed to give the company until September 2013 to pay the remaining £3.1 million.
The authority insists the transfer of the homes, which have 350 residents and 450 staff, will guarantee their future because the council cannot afford an estimated £4 million worth of required upgrades and the continuing day-to-day running costs.
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Southend Care set up a new company, Leicestershire County Care Ltd, to run the homes from yesterday. The new company has committed to providing the £4 million worth of improvements.
County Hall's opposition Liberal Democrat group said the Conservatives had taken a huge risk by allowing Southend Care to defer the payment should the firm be unable to raise the cash in 12 months.
They are also concerned about standards in Southend Care's seven homes, where only one is meeting all essential standards, according to the care home watchdog the Care Quality Commission (CQC).
Conservative cabinet member for adults and communities councillor David Sprason said: "This a very good deal which will avoid the closure of the homes as well as secure improvements that the county council simply can't afford. I am delighted it has gone through.
"Officers have done due diligence on this and are happy.
"If the company cannot pay at the end of the deferment period the homes will come back to us. But that is very unlikely.
"In 12 months the company will have had a full year's trading under its belt and it is looking to borrow from the banks."
He said Southend Care's £3.2 million offer was the highest of any of the original bidders for the care homes.
He said: "We will also get interest on the deferred sum and we have an agreement that rates will remain the same for residents so the charges cannot be whacked up. The county council will save £375,000 a year in the costs of running the homes."
Coun Sprason said he was aware of Southend Care's issues – shown in the CQCs latest inspection reports – with its existing homes, but said they were moderate or minor.
He said: "There is nothing serious there and the issues have been resolved. The CQC is out of date."
Liberal Democrat adults and communities spokesman councillor Sarah Hill said: "I certainly would not accept a deal like this with my own property so why do the Conservatives think it is fine to do it with council property.
"We would have stopped to think about this and gone back to some of the other firms that bid for the homes.
"The Tories say they cannot afford to keep the homes but last time I looked they had £110 million in reserves.
"We are also concerned about the CQC reports on some of Southend Care homes. We would have waited until inspectors had gone back in."
A CQC spokesman said there were no serious faults with the firm's existing homes but said some were still falling short of essential standards of care.
The Leicester Mercury tried to contact Southend Care's director Dr Davie Vive-Kakanda, but a member of staff said he was on three weeks' leave.