County council plans 600 extra care homes

Surrey County Council will earmark sites it owns to make available for developers to design, build and manage the extra care flats for older and disabled people, which will be completed by 2025. The developer would be given a long lease and the council will rent a share of the properties.

It is unusual for a county council to build or commission homes because housing falls under district councils’ remit and county councils do not have Housing Revenue Accounts – the legal and financial structure town halls use to manage housing stock and development.

A report to the council’s cabinet last week said it is facing a “very serious financial situation” where it is forecasting an overspend this year and does not expect to deliver a stable budget in the next few years.

A spokesperson for the council said adult social care is costing an extra £24m this year. The council has estimated it could save £2.8m per year if the scheme goes ahead.

Social care is increasingly placing a financial burden on councils and last week the government revealed plans to cut the New Homes Bonus to make more funding available for social care.

The council wants to move 10% of its residents living in care homes into extra care homes.

Developers have told the council if it can commit to making land available and commit to extra care in the long term by guaranteeing a certain number of hours it will purchase, then they may be able to deliver a fully affordable scheme. However, the tenure mix has not yet been decided.

The council rejected the option to build and operate its own extra care homes because of concerns around the “high level of capital investment required and the limited professional and technical resources available within the council”.

Instead, it is considering either procuring a joint venture partner or a fully commissioned model through a competitive tender.

The council has identified the government’s plan to cap housing benefit to Local Housing Allowance rates as a risk to the development. The report said the uncertainty may “deter or limit” the number of developers interested in partnering with the council.

Mel Few, cabinet member for adult social care at Surrey County Council, said: “Not only are these plans good for older and disabled people who want to stay in their own homes and familiar surroundings, they’re good for the council because we can stretch our budget further at a time when our finances are under severe strain from rising demand for services, including adult social care.”