The original decision to invest, made in 2023, was based on not exceeding a sum of £173 million which would be raised primarily though external borrowing. It was also based on assumptions that it would be cheaper to provide this type of care in the Local Authority’s own homes, rather than purchase it in the private market.
Since that time, a number of key considerations have changed. These include:
• the associated predicted building costs increasing by at least £45 million
• the cost of borrowing continues to rise
• the positive consequences arising from a change to the way the Local Authority purchases care*, resulting in its ability to buy nursing and specialist care more cost effectively and easily in the private sector
Taken together, the original business case for this investment no longer makes good financial sense.
Commenting, Councillor Liz Fairhurst, Hampshire County Council’s Cabinet Lead Member for Adult Social Care and Public Health, said: “The original decision in 2023 to invest a significant amount in specialist in-house nursing and dementia care, was taken in response to the growing demands of caring for an ageing population, and specific concerns around the availability and cost of buying this type of care in the private sector.
“While the demographic picture remains unchanged, we were not able to predict the inflation-busting price increases being seen across the building industry, which mean the predicted upgrades and building costs are at least £45 million higher than originally estimated. This, coupled with the higher cost of borrowing, and the success of recently introduced new ways of buying care - which is resulting in the ability to buy less expensive, good quality beds in the private sector, alongside more consistent supply, requires us to reconsider the original decision.
“Should the decision be taken to halt this investment, we will carefully explore the impacts and consider how best to support our existing County Council care homes to continue to deliver good quality care and support in the future.
“The important thing to emphasise is our ongoing commitment to continuing to expand the care choices Hampshire residents have available to them, such as Extra Care housing and supporting people at home, exploring how technology can help people to remain independent and safe, as well as helping those who need higher levels of support to find the care that is right for them.”
Anyone seeking advice about the care choices available to either support independent living at home or in a supported setting, can find comprehensive information on Connect to Support Hampshire.
Background: In July 2023 the County Council approved investment of £173 million to upgrade and expand some of the Local Authority’s existing care homes for older people, build three new homes, while closing some homes unable to provide the care for people with more complex needs, to the standards expected in future, due to constraints within the buildings themselves.
*
In summer 2024 the County Council introduced a new ‘Care Home Framework’. A system whereby private care providers are contracted to provided care services within a pre-agreed price band. There are currently 236 homes signed up to this of which 208 homes are able to provide the type of care required by those with complex needs.