Councillors and committees

Agenda item

Older People's Accommodation: Dementia Nursing Home Programme

To report progress on the development of a specialist dementia nursing home for older people to be built, subject to planning approval, by the Council in Brown’s Road, Surbiton, KT5 8SP and authorise further work to develop the options for a Council Owned trading company to operate the home.

Decision:

Resolved that -

1.            the Director of Adult Social Services is authorised to progress the project as described in paragraphs 8-29 of this report; and

2.            the Finance and Contracts Committee is RECOMMENDED to approve additional capital funding of £5.26m (ref paras. G & H of the report) to support the project.

Minutes:

There is a pressing need in the borough, and across London, for affordable nursing beds in modern buildings that can be used to deliver high quality services safely and efficiently for those with dementia.  There are estimated to be around 1,500 residents in Kingston living with dementia.  It is predicted this figure will rise to over 2,100 people with dementia by the year 2027.  To meet some of this future need, and to avoid strategic failure of supply, the Council proposes, subject to planning approval, to build an 80 bed, dementia nursing home in Brown’s Road, Surbiton KT5 8SP, on the site of the old Newent House Care Home.

The Committee considered a report which set out progress (since the last report to the Committee in September 2017) on the development of this specialist dementia nursing home.  The report outlined the consultation timetable for planning and construction phases of the project, and sought the Committee’s approval for further work to develop the options for a Council-owned trading company to operate the home.

The home will be owned by the Council and run by a Council-owned, independent operating company which will deliver high quality nursing and care services.  By investing in this way the Council can ensure that Kingston residents will have priority access to the very best in dementia care.  As well as providing care for the increasing number of older people with dementia in the borough, the nursing home will also generate income from residents who are able to fund their own care to support the capital cost of the project.

Based on estimates for build, fit-out and project costs made in summer 2017, the Dementia Nursing Home project was allocated £10.29m capital funding for implementation, subject to procurement and gateway reviews at Concept Design (costed design meeting the Council's criteria), and Construction Stages.

The project is now at the end of the Concept Design stage.   A concept design for the new home on the Brown’s Road site that meets the Council’s design criteria has been developed and costed (target cost subject to planning and procurement of subcontracted services).  The target whole-project cost for design and build of the new home is £15.55m.

The increase in capital cost has arisen mainly from the increase in the cost of the building (bedroom size; increase in labour costs); additional project costs (some sunk costs arising from work with the previous design and build partner); and a 5% whole-project contingency (an additional 5% construction only contingency is built into the Design and Build cost):

Design & Build +£3.95m

Project costs +£0.570m

Contingency (5%) +£0.740m

Total Additional +£5.26m

The report recommended that the additional costs be approved as necessary for the delivery of a home that meets the highest design specification for delivery of higher acuity dementia care for residents.

In January 2019 the project, costs, and the financial business case for the home underwent a gateway review by the Corporate Resources Panel of the Council.  The financial position for the Council as landlord remains positive.  The lease income for the home, at £880k per year with an increase of 3% per year thereafter, adequately covers interest and repayment of the £15.5m capital sum over the 40 year life of the building, including landlord responsibilities for the tenant-serviced lease.  Actively managed lease arrangements will be put in place to safeguard the Council’s financial position over the life of the building.

The Committee were asked to approve completion of the design for the new home, with submission for planning approval in February 2019, followed by formal public consultation and, subject to planning approval being granted, a review of the Guaranteed Maximum Price for construction in May 2019.

The Committee were also asked to approve further work, led by the Director of Adult Social Care with the Director of Corporate and Commercial, and the Assistant Director of Law and Governance, to define options for development of a Council-owned operating company to run the home.  The Director of Adult Social Care proposes to set up a reference group of interested members to ensure that the new company has appropriate Member oversight and is properly aligned with the aims and values of the Council.   A report and recommendation on options for the new company will be made to a future meeting of this Committee, prior to submission to full Council for approval.

Resolved that -

1.            the Director of Adult Social Services is authorised to progress the project as described in paragraphs 8-29 of this report; and

2.            the Finance and Contracts Committee is RECOMMENDED to approve additional capital funding of £5.26m (ref paras. G & H of the report) to support the project.

 

Voting - unanimous

Supporting documents: