Councillor Dan Levy, Cabinet Member for Finance, Property and Transformation, made a decision to approve the leasehold acquisition of a warehouse in Bicester for use by Adult Social Services and their contractor for the Integrated Community Equipment Service (ICES). The meeting also covered declarations of interest from councillors.

Leasehold Acquisition of Warehouse

Councillor Dan Levy approved option 1 in Appendix 1 of the Public Reports Pack for the leasehold acquisition of a warehouse in Bicester for use by Adult Social Services and their contractor for the Integrated Community Equipment Service (ICES).

The report by the Director of Property and Assets explained that Oxfordshire's previous ICES provider, NRS Healthcare, went into liquidation in August 2025. An emergency 3-year contract was then awarded to Millbrook Healthcare Limited. The warehouse is required for storage, decontamination, recycling and refurbishment of equipment, and to support county-wide transportation of equipment to and from hospitals, peripheral stores and people's homes.

Following the collapse of NRS Healthcare, Oxfordshire County Council (OCC) was unable to access NRS Healthcare's previous warehouse in Bicester for several weeks. The council sourced five temporary storage solutions around the county to maintain an emergency level of service for residents.

The property team negotiated a new three-year lease, but the new landlord exercised their right to terminate the lease early by giving three months' notice. The OCC Property team worked with Millbrook to identify suitable replacement warehouses. It was decided that the service should remain in Bicester to reduce the risk of losing NRS staff now working for Millbrook and consequently impact service delivery.

The property team identified an alternative property in Bicester and agreed heads of terms to enter into a six-year lease, which included a break clause exercisable after 1 August 2028, subject to three months' prior written notice, to align with the end date of the contract with Millbrook.

On 12 November 2025, the new landlord for the existing building offered OCC the opportunity to renegotiate terms for a new lease. Property, Commissioning and Millbrook had several meetings to discuss the available options.

It was decided at Adult Social Care DLT on Monday 1 December to proceed with Option 1. Due to the level of rent over the length of the term, this acquisition requires a key decision.

The key differential between the options was the risk to service delivery, with the recommended option posing the least amount of risk.

The report stated that in normal circumstances, it would be the provider's responsibility to source warehousing to deliver the service. However, given the cost of the emergency stand up and additional 6+6% margin OCC is paying to Millbrook, OCC explored opportunities to mitigate. It was suggested that, to save on the 6+6%, OCC could take on the lease of the warehouse directly. This would avoid the 6+6% payment, remove the risk of access issues in the event of another provider failure and is in alignment with OCC's ambition to become a corporate landlord in line with the approved Property Strategy.

The Community Equipment service with Millbrook was estimated to cost £9.8 million per annum. These costs are split between OCC and the ICB as part of the S75 pooled budgeting arrangements¹. This projection included estimated warehousing costs at c.£500,000 per annum which, as with all other costs in the contract, would be subject to a 6+6% additional fee – equating to a 13.6% additional charge - totalling £568,000 per annum. Option 1 costs £448,000 per annum (rent, service charge and an estimated sum for utilities etc) and is therefore £120,000 per annum cheaper compared to Millbrook's forecast.

Option 1 has higher revenue costs with the overall difference between the two proposed warehousing options being £91,000 per annum. However, option 1 avoids the need to move the equipment service, causing significant disruption over winter, the cost of which would likely exceed the cost differential between the options in bed days, bed occupancy, and deconditioning leading to larger care packages because of increased length of stay in hospital. Option 1 also avoids a £639,000 upfront fit out cost in year 1, when the budget for community equipment is already forecasting an £800,000 overspend this year across OCC and ICB.

The council is acquiring this lease, instead of Millbrook, where they would have to pay an additional 6+6% which is projected to reduce spend by £295,000 over the duration of the contract.

The unit will be occupied by way of a lease. The lease will not be protected by the Landlord and Tenant Act 1954. The lease is for ten years with a five year break clause which only OCC can activate. It can be activated on providing six months written notice to the landlord. The terms proposed for the draft lease are in line with normal commercial leases and will include a provision allowing OCC to share occupation with Millbrook. The rent is £278,928 + VAT per annum (after a 3 month rent free period) and will be reviewed upwards in line with RPI² after 5 years. There will also be a service charge to pay (amount TBC). Stamp Duty Land Tax will come to around £25,500.

Declarations of Interest

Councillors were asked to declare any disclosable pecuniary interests relating to items on the agenda, according to the guidance provided. The recommendations were approved. Jack Nicholson declared an interest.