PAPER B2
Purpose: For Decision
Committee: EXECUTIVE
Date: 23 APRIL 2002
Title: RESPITE CARE HOME FOR CHILDREN WITH
A DISABILITY
PORTFOLIO
HOLDER – SOCIAL SERVICES AND HOUSING
SUMMARY/PURPOSE
To update Members with
regard to the current position on this project, and in particular the proposed
way forward in respect of its capital funding.
BACKGROUND
A report on this matter
was presented to the Council’s Executive in January 2001. Briefly, this project concerns the building
of a new residential respite care home for children with a disability.
A current building,
Beaulieu, is located at Cowes and is owned and operated by. The Isle of Wight Healthcare NHS Trust. New legislation and standards means that the
current building will not be viable in the longer term. The children who
benefit from this facility are severely disabled and parents have continually
expressed concern about the limited respite care available due to limitations
of space in the current building.
Maintaining such provision is crucial in reducing the need to provide
longer term residential placement for children on the mainland.
A project group including
officers from Health, Education, Social Services, Property Services and Finance
as well as a parent representative worked to develop the proposed new build
option on land adjacent to Medina High School which was endorsed by the
Executive Committee in January 2001.
Detailed Planning
Permission was obtained in June 2001 and Building Regulations Approval in
October 2001. A copy of the site plan
is appended to this report.
The scheme as
originally outlined to the Executive assumed the involvement of a private
sector partner in achieving the necessary capital investment (60%/
£684,000). It was envisaged that a
developer would take a lease of the building and that there would be a lease
back arrangement between the developer and one of the funding agencies. The
lease premium would then become an annual charge to the revenue budget of the
new facility.
In
January 2002 it became clear that the Isle of Wight Healthcare NHS Trust could
not take on financial responsibility through a lease in the manner originally
envisaged. It had previously been
established that a lease to the Council would have constituted a Credit Arrangement
and so consumed substantial capital resources. Officers from Property Services,
Finance and Legal Services have been seeking to resolve this matter since this
time.
Given the importance of
this project and Member interest it was felt to be important to advise Members
now of the efforts being made to resolve matters and recommend a way forward
regarding the projects funding.
CONTENT
It has been identified
that Section 22 of The Local Authorities (Capital Finance) Regulations 1997
provides for a Local Authority entering into a Licensing contract for the
construction or enhancement of a dwelling on land in which the authority have a
freehold interest. Such a contract is
excluded from the requirements of Section 48 of the Local Government and Housing
Act 1989, which require capital resources to be set aside in respect of Credit
Arrangements.
Current Legal advice is
that Section 22 could apply to this project, but certain conditions need to be
met for this to be confirmed. These
conditions would require the following arrangements to be in place.
1. A
building contract with a Developer, which provides for the repayment of costs
over a period of say 20 years.
2. A
facilities management tenancy to a registered landlord (such as a housing association)
for a period of 21 years, to maintain the fabric and running of the building.
3. A Service
Level Agreement (SLA) with an operator to provide the necessary care and
operation of the Home.
Behind each of these
arrangements there is much detail to be put in place, but the above sets the
framework for what appears to be an achievable outcome.
An opportunity arose in
March to submit a capital finance bid under the Joint Investment Plan for
Learning Disability. Informal indications suggest that the bid meets the
criteria and is being processed for consideration by the Department of Health.
Any further capital resources that can be applied to the scheme would reduce
the amount of private sector finance required and the associated revenue cost
implications.
The Council’s anticipated
capital resources for the 2002/03 financial year have been fully allocated, and
any further resources allocated to this scheme would only be possible by making
reductions elsewhere in currently approved capital expenditure programmes.
CONCLUSIONS
The use of Section 22 of
the Local Authorities (Capital Finance) Regulations presents a way forward for
the capital financing of the project without the use of additional and
substantial capital resources of the Council.
It is likely that the
Island will obtain an unspecified capital grant from the Joint Investment Plan
and a decision is expected shortly.
This could enable the Council to reduce the necessary capital funding
required of the private sector and therefore reduce the annual contract
payments that would be a cost to the revenue budget of the new facility.
OPTIONS
To allocate additional
capital resources to the scheme, to a maximum of £684,000.
To proceed with a
Partnership Arrangement in accordance with Section 22 of the Local Authorities
(Capital Finance) Regulations.
RECOMMENDATIONS
The
Committee note the content of this report and approve a licensed building
contract and the provisions of Section 22 of the Local Authority (Capital
Finance) Regulations as the means of providing private sector funding into the
project.
That
detailed negotiations on the above proceed with potential partners, with a
further report to the Executive containing a detailed appraisal of the
necessary contract arrangements.
BACKGROUND PAPERS
Executive papers 18
January 2001
Social Services & Housing Select Committee papers 21 December 2000
The Local Authorities (Capital Finance) Regulations 1997
Contact point: Jimmy Doyle, 520600
|
C
WADDICOR Strategic
Director of Social Services and
Housing |
R
MAZILLIUS Portfolio
Holder for Social Services and Housing |
