£27m Care Home Bill Could Be Still Higher

SENIOR councillors have admitted that the cost of five new care homes could rise even further than the £27.2 million reported this week to Highland Council’s housing and social work committee.

The new figure is already nearly £6 million more than the initial projection of £21.5 million, which some councillors said privately appeared to have been plucked out of thin air.

A number of costs still have to be calculated to establish a definitive figure, but the council’s director of housing and property, Steve Barron, warned that the final figure would not be known until the authority agreed a final bid from the successful contractor.

The policy commitment to the care homes was inherited by the current administration from the Independent/SNP coalition which led Highland Council from 2007 until earlier this year.

Council leader Michael Foxley was roundly condemned several months ago for revealing that he thought the cost of the five care homes would exceed the initial estimate by at least one third.

Councillor Foxley resisted the temptation to say ‘I told you so’, but pointed out that finally the council had dependable cost estimates.

“It’s good to have robust figures, but there will be additional costs associated with land acquisition, legal costs, costs of decanting residents and installing IT services,” he said.

“It was never realistic to think that we could build five care homes for £4 million each. We have to be very careful about the building design and get the input of the NHS to ensure that the buildings are as flexible as possible.”

The homes in Muir of Ord, Inverness and Fort William will be built in phase one of the project, and are expected to be completed in the spring of 2011.

There have been delays with the homes in Tain and Grantown, which means that they will not be built until later.

The plan for Grantown is to have a hospital in the same care complex, but NHS funding will not be available until 2012, if at all.

A decision on the NHS funding is expected in the next six months, but if it is not forthcoming, the care home will be built on its own.

Housing and social work chairman, Margaret Davidson, was challenged at Thursday’s meeting in Inverness to promise that all five care homes would be built.

She said: “Read my lips. There will be five new care homes, and we will not be deflected from that.”

Badenoch and Strathspey Highland councillor Dave Fallows said that the aim in Grantown was to have a facility run jointly with the NHS. “That vision is still alive, although we accept that the project may be delayed. If the NHS is unable to deliver, the delay will only be six months, and we can deliver the care home on its own,” he said.

A number of councillors questioned the escalation in cost.

Mr Barron said: “Cost estimates are just estimates. We will get a firm cost when the tenders are received, and we are working very hard to ensure that we get the best value for money, in design, capital procurement and costs in use. We anticipate that cost inflation may change, and I am taking a close personal interest in the project.”

Councillor Davidson said: “We can never be sure that the costs won’t go up further. The costs were what we had 18 months ago, and lots of things have changed.

“In the hurry to get the figures, a lot of things weren’t taken into account, such as site conditions. We now have more realistic costs for developing the sites.

“The figures have built in an inflation figure assuming a steady increase in prices, and on the difficulty of getting tenders on the prices. That is changing, and some tenders are coming in on education projects that are under what was expected.

“Let’s keep our fingers crossed and we may be able to come back and report some of the costs have gone down.”

She added: “We will deliver five care homes. There are costs that have not yet been put in, including legal costs and cost of land acquisition in Grantown, where we are negotiating with a private landowner about a small piece of land.”