The Kent County Council Scrutiny Committee met to discuss the Older Persons Residential and Nursing Care Service and the council's asset disposal strategy. The committee requested more frequent reporting on the Older Persons Residential and Nursing Care Service contract and raised concerns about transparency and community value in the asset disposal strategy.

Older Persons Residential and Nursing Care Service

The committee scrutinised decision 25/00042 regarding the Older Persons Residential and Nursing Care Service, focusing on financial and commercial risks associated with the £235 million contract.

Councillor Mrs. Morton, Cabinet Member for Adult Social Care and Public Health, introduced the item, highlighting the challenges in social care, including the need for extra care housing, workforce issues, and financial pressures on providers. She emphasised that the new contract aims to provide stability, clear expectations, and better consistency for those receiving care.

Key points of discussion included:

• Financial Safeguards: Members questioned the safeguards in place to control and mitigate inflation's impact on the contract. Officers explained that the contract is a framework that identifies strategic partners and providers meeting expectations around price, quality, and location.
• Contract Differences: Helen, lead commissioner, noted that the contract hadn't been re-let since 2014, so this was an opportunity to work closely with the market to ensure a sustainable price for providers and the council, while ensuring quality of care and safeguarding. Claire, an expert in commercial procurement, added that the new Procurement Act requires a fair and equitable way of procuring services, and the council wants as many providers as possible on the framework.
• Procurement Act: Claire explained that under the Procurement Act 2023, the council now has an open framework, allowing new providers to join mid-term. She emphasised that providers wanting to do business with Kent County Council (KCC) must join the framework and bid for pricing bandings.
• Local Government Reorganisation (LGR): In response to a question from Councillor Wayne Chapman, it was confirmed that break clauses would be included in the contracts for new unitary authorities that may arise from LGR.
• Impact of Government Decisions: Councillor Jeremy Eustace raised concerns about the impact of LGR and government decisions around national insurance increases and employee rights bills. Officers acknowledged the 10-12% growth in demand for adult social care and the limited growth in council tax and ring-fenced grants, leading to financial pressures.
• National Insurance: Dave, a finance officer, clarified that the council received no funding for the increase in employers' national insurance for commissioned contracts, only for staff directly employed by KCC.
• Private Sector Reliance: Councillor Alister Brady questioned the over-reliance on the private sector and the lack of a business plan to move towards a hybrid model. Helen responded that the council is exploring all options through the accommodation market position statement.
• Spot Purchasing: Councillor Alister Brady raised concerns about spot purchasing¹ outside the framework. Helen confirmed that the aim is to manage the pricing model and ensure placements are made at the agreed price.
• Care Act: It was clarified that the Care Act is a safety net, legally obligating the council to provide care if someone is assessed as being at significant risk without it.
• High Risk: The committee discussed the high risk of budget increases during the transition between the old and new contracts. Officers stated they are working with current providers to manage prices and ensure value for money.
• Delegated Authority: Concerns were raised about the delegation of power to the cabinet member and director to negotiate the contract. The committee questioned how members would be informed of key risks and decisions. It was clarified that while the scrutiny committee can call in the decision at any time, there is no requirement for decisions under £2 million to be brought back to the committee once the delegation has been agreed.

Recommendations:

The committee agreed to recommend that the Adult Social Care and Public Health Cabinet Committee:

• Report annually on the cost of market versus internal KCC-owned care homes under this contract.
• Assess the mitigation of the high risk related to the transfer from the current contract to the new contract.
• Establish a more frequent reporting schedule on the contract's progress, given its value and strategic impact.
• Include key performance indicators (KPIs) related to spot purchasing and the impact of national insurance in the dashboard.

Kent County Council's Asset Disposal Strategy

The committee then discussed Kent County Council's Asset Disposal Strategy, focusing on the disposal of surplus freehold assets to generate capital receipts.

Councillor Brian Collins, Deputy Leader, emphasised that the council is governed by the Local Government Act 1972, requiring them to obtain the best consideration for assets they no longer need. He also noted that disposals help replenish the capital budget for necessary projects.

Key points of discussion included:

• Surplus Declaration: Rebecca, a director, explained the process for declaring assets surplus, noting that the council first considers if there is another KCC use for the building.
• Lead-in Time: Councillor Antony Hook questioned how much lead-in time other parts of KCC get to know about potential disposals. Rebecca responded that it varies, but education is usually aware of their needs well in advance.
• Leasing: Councillor Antony Hook asked about leasing council properties. It was explained that leases under 20 years are delegated to the director of infrastructure.
• List of Properties: Councillor Mark Hood requested access to the full list of 77 properties in the disposal pipeline. Councillor Brian Collins expressed reluctance due to commercial sensitivity.
• Local Government Reorganisation: Councillor Mark Hood questioned the lack of consideration given to LGR in the strategy. Officers responded that until there is an announcement on how LGR will proceed, the council has a statutory duty to dispose of surplus assets and get best consideration.
• Capital Receipts: Councillor Mark Hood raised concerns about using capital receipts for transformational revenue spending. Dave Shipton clarified that there are prescribed circumstances for using capital receipts for revenue purposes, and these are set out in an appendix to the budget report.
• Communication: Councillor Alister Brady requested a comparison of assets KCC purchases versus those it sells. He also sought more transparency regarding community value and engagement processes.
• Community Value: It was explained that community groups can nominate council properties as assets of community value, giving them six months to develop a bid if the property is put up for disposal.
• Warm, Safe and Dry: Councillor Alister Brady asked about the cost analysis of the warm, safe and dry policy and its impact on asset values. It was clarified that there is no requirement for vacant properties on the disposals list to be warm, safe and dry, although safety is a priority.
• Maintenance Costs: Councillor Jeremy Eustace asked about the overall cost of maintenance and security for empty properties. Officers did not have an overall figure readily available but offered to provide it to the committee.
• Local Authority First Option: Councillor Alister Brady asked what work is done to give local authorities first option on development land.

Recommendations and Comments:

The committee discussed several proposals, including:

• Making exempt papers in P&R² more transparent.
• Comparing assets sold versus assets purchased.
• Providing more information on community value and engagement processes.
• Including business cases for alternative service delivery options.

However, there was no agreement on these recommendations. The committee agreed to note the report and comment that LGR is an influence on disposals and needs to be given greater consideration in the policies and how they are interpreted.

Work Programme

Finally, the committee noted the work programme.