Meeting documents

Cabinet
Tuesday, 19 December 2006

CA191206-11

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Division(s): Chipping Norton

ITEM CA11

CABINET – 19 DECEMBER 2006

Chipping Norton: Care Home and Primary Care Facilities

Report by Director of Social & Community Services

Introduction

  1. This report summarises Service development proposals for a combined registered care home facility and primary care centre in Chipping Norton and a way forward for concluding the project. The report includes a description of the scheme and identifies the key issues that are preventing final agreement by Oxfordshire Primary Care Trust and the County Council.

    2. Background

  2. The County Council and Oxfordshire PCT (the PCT) have been working together on proposals which will lead to the replacement of a 43 bedded ex-local authority home, transferred to the Oxfordshire Care Partnership in December 2001, and the facilities currently provided through the War Memorial Hospital, built 1918 and no longer fit for the delivery of modern health care.

  3. The care home, Castle View, is increasingly unsuited to the provision of social care for higher dependency levels because of room sizes and access issues for mobility impaired people, is in a poor state of repair, and as part of an overall development programme is due to close. The Commission for Social Care Inspection (CSCI), the registration authority, is also indicating that from April 2007 it will not be permissible for people to be in double rooms against their wishes. This reduces capacity by 5 places.

  4. Following consultation on the development proposals for care homes the County Council took note of the clear opposition to the closure of Castle View and therefore looked hard at options for retaining as much service as possible in the Chipping Norton. The proposals outlined below are the result of this work. They were discussed in detail at a meeting of the County Council’s Executive Committee on 15 March 2005 when it was agreed that detailed development proposals should be prepared.

  5. The proposals in summary are as follows:

    • On the basis of needs assessments and market analysis the County Council’s requirement for care home places in the Chipping Norton area is 20 places. It can meet this requirement through purchase of care home places in the independent sector across the north west of Oxfordshire and close the care home but because of the desirability of securing the supply of places for on a long term basis and longer term service delivery opportunities the joint development with the PCT has been agreed as being the most desirable way forward.

    • The PCT had also been considering the future of the War Memorial Hospital. It increasingly needs more maintenance and remedial work and its design renders it fundamentally unsuited to the delivery of modern care, treatment and support for older people and others who require community hospital services. In addition to its in-patient beds it also houses a number of out-patient and other clinics as well as providing a maternity service, including maternity beds.

    • The PCT requires 14 places for use as NHS funded intermediate treatment places. These places can be provided through an appropriately registered care home facility, as is the pattern across Oxfordshire and indeed England and Wales.

    • The total requirement between Social & Community Services and the PCT is therefore 34 beds. The Oxfordshire Care Partnership are willing to take the risk on achieving private sales of 16 beds, thus giving a care home which totals 50 places, which is the minimum number necessary for an economic, efficient and effective care home.

    • The County Council and the PCT are both in agreement to purchase their required number of beds subject to each other committing to their purchase of beds.

    • In addition to the commitment of purchasing 14 beds, the PCT wishes to commit to building a primary care centre as part of the overall scheme which would ensure the re-provision of all the current functions in the War Memorial Hospital.

  1. The result of these proposals is the development of a new primary care centre and care home that will provide high quality facilities for the modern delivery of social and health care services now and well into the future.

    2. Key Issues and Solutions

    Book and Market Values

  2. It is intended that the War Memorial Hospital will close when the new care home and the primary care centre are completed. The Hospital will then become surplus to requirements and will be disposed of. The property has a book value of £3.2m. which was based on the existing use value for a hospital. However, the market value for alternative uses has been estimated at £1.1million. Under NHS accounting rules, any shortfall between the capital receipt and the book value would be treated as a deficit in the PCT revenue accounts for the year in which the transaction is completed. They will be penalised by disposing of the property at market value.

  3. This is known as "impairment" and cannot be afforded by the PCT at any value.

  4. The effect of the Impairment, should it become applicable, would be that the whole scheme would fall as the PCT could not afford any impairment, they would then be unable to commit to the purchase of 14 intermediate care places in the care home and there will not therefore be a sufficient block commitment to purchase places for the Oxfordshire Care Partnership to be able to proceed any further. The care home and the scheme as a whole would fall.

  5. The County Council and the PCT have explored a number of ways to overcome this problem, including a series of legal arrangements. These have proved not to be permissible. Following this work the South Central Strategic Health Authority suggested to the PCT that they apply for a capital grant to cover the value of the impairment. This application has been but at the time of writing the outcome is not known. Cabinet will receive an update at the meeting. There is a good level of confidence that the grant will be approved. The local MP has written to give his full support.

  6. However, if for any reason the application is not approved, it is proposed the County Council and the PCT should jointly approach Central Government for an indication as to whether in this case, under their freedoms and flexibilities, a relaxation of the accounting rules might be permitted. Unfortunately, there does not appear to be a developed process for doing this.

    7. VAT

  7. The PCT still faces significant issues over the VAT rating of the 14 Intermediate Treatment beds. It has already made significant changes to avoid VAT issues for the whole scheme, but despite this the Revenue and Excise office has determined that the 14 beds that the PCT will purchase should be seen as NHS beds. This will have the effect of altering the VAT status for care home as a whole which means that VAT will be payable on the build costs – a total of £475,000. The only way to deal with this is to increase the beds price, which would make the places poor value for money for the County Council and it could not be recommended that we continue. The care home and the scheme as a whole would fall.

  8. This determination by the Revenue and Excise office is being very strongly contested by the PCT and its advisors. At the time of writing the outcome is not known and the Cabinet will be update at the meeting.

    9. Planning

  9. An Environmental Impact Study (EIS) is now seen as being necessary and this is being prepared. It is still hoped that the application for outline planning consent will be able to be submitted for consideration by West Oxfordshire District Council during January 2007 but this will depend on the work that will be necessary to complete the EIS. Cabinet will receive an update on this at the meeting.

    10.   Conclusion and Next Steps

  10. This project has had a high level of commitment and involvement from the County Council and if it is completed will result new, forward-looking services that will be able to meet a broad range of social and health care needs in Chipping Norton and the surrounding areas.

  11. The County Council has agreed to purchase 20 places in the care home subject to the PCT committing to the purchase of 14 places. The PCT has agreed to this in principle, subject to satisfactory resolution of the issues in the business plan outlined above.

  12. The planning issues cannot be finally resolved until the impairment and VAT issues are satisfactorily settled. There is nothing more that the County Council can do to in relation to impairment and VAT and planning consents are not within its powers. The County Council is now able to finally establish its own position and the matters upon which any final agreement is subject to.

  13. This project has been in development for a considerable time and has been incurring additional expenditure because of keeping Castle View open. This is a situation that cannot continue. It is proposed that unless the PCT is able to complete its agreement to purchase the 14 intermediate treatment beds by 31 March 2007 then the County Council withdraws completely from the scheme. At the same time notice will be given to the Oxfordshire Care Partnership of the proposal to close Castle View Home for Older People and consultation on how this happen will begin.

  14. There are staff and cost implications if it is decided to follow this route: in summary there would be run down costs, costs of relocating residents and holding voids until the home closed and staff redundancy or relocation costs arsing from the TUPE (Transfer of Undertakings - Protection of Employment) requirements. An addendum is being prepared that sets out the costs of closure and this will be available for the Cabinet for the meeting on 19 December 2006.

  15. If the agreement to develop the care home is signed by March 2007 it should be open in the summer of 2008.

    16. RECOMMENDATIONS

  16. The Cabinet is RECOMMENDED to agree that:

          1. the County Council confirms its intention to purchase 20 registered care beds in the proposed care home development in Chipping Norton subject to the PCT agreeing to purchasing 14 beds in the development;

          2. a further report is brought to a Cabinet meeting in March 2007 on progress in reaching the necessary agreement;

          3. subject to any advice or information given in the report to the meeting of the cabinet in March 2007 the County Council will withdraw from the scheme if the agreements to purchase the care home beds by the County Council and the PCT cannot be finalised by 31 March 2007; and,

          4. if the application is not approved, to authorise a joint approach with the PCT to Central Government for an indication as to whether in this case a relaxation of the accounting rules would be permitted to enable the scheme to proceed.

CHARLES WADDICOR
Director of Social & Community Services

Background papers: Nil

Contact Officer: Nick Welch Head of Planning and Partnerships, Tel: 01865 815714.

December 2006

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