Business Clinic
Calling time on local authority homes?

The end of 2014 saw a number of local authorities consulting on the future of council-run care homes. Is time finally being called on in-house care home provision?

Council-run care homes were once the main provision of care within individual counties. As time, legislation and successive Governments have passed, provision has been outsourced or closed.

Now council-run care homes are a minority.

Local authorities face further budgetary cuts, having to make vast savings over recent years; A proportion of existing in-house provision is ageing and will cost to bring up to standard. As a result, 2014 saw more local authorities consulting on their care homes. Although individual councils are taking different approaches from outsourcing to closures.

More specifically, consultations are happening in Devon, Doncaster, Leeds, Leicester, Nottinghamshire and Surrey.


In Devon, plans were revealed to close 20 homes over 18 months. The council only provides places to 10 per cent of the county’s residents, with 90 per cent of places outsourced to the independent sector. However, the costs involved meant that it was spending nearly 30 per cent of its residential care budget on these 10 per cent of people. With a need to make financial savings, it proposed to close 20 of its 22 care homes. Two dementia care homes were to remain open. However, the decision was met with legal action which put it on hold until November when the challenge was withdrawn.

The Council said in a statement to CMM, ‘Devon County Council is now continuing to implement its phased closure programme. The number of residents has already been reduced from 260 to fewer than 150 and several homes are now empty. Throughout the process, all concerned are being reassured that there has been no change to the existing eligibility criteria for access to County Council care services and that the authority is fully committed to supporting residents and their families to identify and secure the best possible alternative care in the independent sector.’


Doncaster Metropolitan Borough Council had agreed in late 2013 to close the last of its seven care homes from June 2014. This was mainly due to ageing stock and the costs involved in bringing them up to standard. However, a decision was then taken to find alternative providers. In a Statement Ros Jones, Mayor of Doncaster said, ‘In June Cabinet requested that officers seek to identify potential alternative providers for the council’s seven care homes. I am pleased that this process has identified enough interest to commence a formal procurement process which, if successful, would mean the care homes will not close.

‘The procurement process to transfer the care homes has started and is being designed to ensure high quality of care for our residents. Staff would continue to be protected not just in legislative terms, through such things as TUPE, but also through our expectations on an incumbent provider to maintain a skilled and effective workforce. Staff will be fully consulted on the proposals and the implications for them and the service, in light of these planned changes.’


In Leeds, the City Council has taken the decision to ‘move away from directly owned and operated long-stay care homes to support the development of Extra Care housing…in those areas where there is currently an undersupply.’

The Council is also looking to work closely with the independent sector to ensure future provision of nursing and end of life care facilities across the city is modern, up-to-date and fits the needs of local residents. The Council is discussing whether to consult on the closure of three of its 15 remaining homes, stop admissions to two more and look at the possibility of community transfers for another two. The council has closed seven homes since 2010 due to budgetary pressures.


Leicester City Council has sold two of its former care home properties. In a statement it said it had, ‘put the former elderly people’s homes of Nuffield House and Elizabeth House up for sale following their closure earlier this year [2014]. Both buildings have now been purchased by two nationally-established private care home providers, with a view to running them as care homes’.

The council has also agreed the sale of two homes as going concerns. Abbey House and Cooper House are due to transfer to Leicestershire County Care Ltd on 2nd February 2015.


Nottinghamshire County Council is consulting on the future of its six remaining care homes in its Budget consultation. These homes according to the consultation document, ‘are not modern and do not have the benefit of en-suite facilities for long-term care residents.’ The Council is investing £12.65million in more extra care schemes across the county as one alternative to the care homes, which are proposed to close. Residents in the care homes proposed to close will be given priority for a place in a new build extra care scheme where appropriate.


Finally, Surrey County Council is consulting on the future of six of its residential care homes. In its consultation document the council said, ‘We want to make sure Surrey residents have access to high quality care and support… These six homes – built between 1970 and 1990 – are not designed to meet changing needs and new standards of accommodation. The homes are all currently under-utilised.’

The consultation ran until the 19th December with recommendations expected in 2015.

Over to the experts…

Local authorities across the country are consulting on the future of some or all of their care provision. With a need to make financial savings, ageing stock and rising costs of delivering care, is time being called, once and for all, on in-house residential care? Do these consultations pose opportunities for private providers? Will we see a completely independent care market within the next five years?


Andrew Sidwell Senior Director, GVA


We live in an age of ever-increasing care home standards, driven by expectations of users and relentless regulation. I seriously question local authorities’ (LA) ability to compete, and even their future provider role. Over the longer term will the available care and accommodation across any given district improve or deteriorate by keeping care homes in the hands of LAs? Or might overall sector standards improve by allowing the homes to pass into private or charitable sector ownership, or close?

Key to this is the ability to invest in redeveloping and improving ageing stock, for hugely less-dependent clients than today. We cannot be confident that LAs have the resources to re-provide stock to create appropriate, fit-for-purpose environments.

Successive governments have given social care funding a low priority. Combine with the LA budget squeeze and the continuing austerity agenda and divestment is not only advisable, it is inevitable.

The undisputed need for state-funded residential care beds is largely taken up elsewhere by charities, housing associations and the many excellent not-for-profit trusts founded to takeover LA homes. Much of this supply is of high quality, higher than many surviving LA homes.

Development of sheltered/extra-care housing continues, sometimes in ambitious and attractive care villages. Homecare services expand. So there’s little room for struggling, inefficient and increasingly obsolete LA homes. Many stand on sites with viable alternative uses, even in low value areas. The best use of scarce resources no longer lies in persevering with LA care homes.

Will LAs still provide residential care facilities? Probably, but substantially fewer and more aligned to wider choices of accommodation and care.


Des Kelly OBE Executive Director, National Care Forum


The transfer of care home services from the public sector which began in the 1980s is almost complete in that there is estimated to be only about 6 per cent of care provision now operated by local authorities. As the summary of consultations currently taking place highlights very well, the phased closure of care homes appears to be intensifying as councils deal with rising demands and a continuing squeeze on their budgets. Local authorities are different, supply and demand characteristics vary as does the availability of alternative support services and, as a consequence, the ‘market’ for care also differs.

Whether or not a council decides to continue to operate some care home services on an in-house basis will need to be informed by these, and other relevant, local factors. I don’t believe that public sector provision will disappear altogether but I do think it will continue to shrink as it seeks to specialise in such areas as dementia care or forms of integrated service such as intermediate care or rehabilitation. Of course, this is mirroring developments that are occurring amongst for-profit and not-for-profit care home providers.

The biggest difficulty that council-run care homes face is the disproportionately high cost of staffing. Herein is a significant dilemma as reducing costs has primarily been achieved through cuts to staff wages and conditions. Given the current calls for commissioning arrangements to recognise the professional role of care workers and cover the cost of paying the Living Wage it is ironic that the same financial pressures experienced by all providers has resulted in this situation.

I believe that any opportunities will simply result from the continued sector consolidation but worry that the cost of improved quality will ultimately mean less choice.


Erica Lockhart Co-Chair, Care Association Alliance


Anyone who reads the consultation document on the potential closure of Surrey County Council’s last remaining care homes would ask, ‘why has it taken this long to address this issue?’ It highlights low occupancy, poor building infrastructure and probably the worst element, poor environment – with no en-suite facilities, corridor and toilets not suitable for today’s frailer residents. That is before you consider the overhead costs at a time when LA budgets are under such pressure, how can such low occupancy levels be sustained? No private or voluntary sector provider could have stayed in business. Nor would the Care Quality Commission have been so tolerant of the lack of modern facilities.

Although there will no doubt be local concern at these homes closing, not least for the current residents but as a community resource the residents, when moved to alternative more suitable premises, will flourish.

The key question for the LA will be, can they buy alternative beds in the independent market for the current low fees they pay. Surrey has been sheltered from some of the market forces by its long-term block contracts from over 20 years ago when it outsourced homes to two large providers.

There will be capacity in the market for these residents but I’m concerned about the high numbers of respite beds that will be lost. It’s a problem for independent providers to make available advance respite bookings for carers. If there are vacancies virtually all providers will assist but to keep beds open ‘in case’ doesn’t make financial sense. The council will need to consider some block contract beds to meet this need.

It’s time to take stock, for providers to respond with innovative solutions and continue to build public confidence in the quality of care the private sector can offer.

Do you agree with the panel? What are your thoughts on local authority in-house care homes? Add to the debate in the comments below. Subscription required.

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