Northamptonshire County Council talks to buy out costly care contract fail

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Northamptonshire County Council's hope of saving £1.5m this financial year by buying out a costly elderly care contract will not be realised.

Despite recent talks with the Department of Health and the Treasury the authority has not been able to buy itself out of the expensive PFI contract it signed up to with Shaw Healthcare 15 years ago.

It was revealed in the council’s stabilisation plan published last month (October) that several dozen beds are lying empty each week at the four Northamptonshire care homes built as part of the contract, because the terms agreed mean that many patients the council wants to put into the beds do not qualify.

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The authority is paying £8.8m each year for the 204 beds and has to spend a further £600 to £700 per week for each alternative care bed for those who do not meet the criteria.

The hoped-for buy-out had been part of the total £35.2m budget savings the council had agreed earlier this spring.

A spokesman for Northamptonshire County Council said: “£1.5m of the budget savings for 2018/2019 related to making savings by managing the Shaw PFI contract more effectively and potentially buying out the contract to improve the current occupancy and use of the four specialist care centres.

“While we have been in discussion with the Department of Health and Treasury we have not been able to progress a buy-out due to the technical treatment of PFIs.

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“Instead we are now working with Shaw and the departments to improve occupancy through improved contract compliance while we look at longer-term options to implement next year.”

The council has tried a number of times over recent years to get itself out of the agreement, which was signed before the Treasury standardised PFI contract terms.

In its stabilisation plan the council outlined other ways in which the council is trying to make the contract operate more efficiently.

It says: “Strengthened contract management is being put in place and the adults commissioning team has offered training in relation to complex care, lifting and hoisting to allow Shaw to support clients with higher levels of needs.

“The council has also funded pharmacy and clinical support to help Shaw’s ability to accept more referrals.”