Borders councillors voted unanimously on three separate occasions to set up an arms length company with 850 staff to deliver social care services including additional expenditure of more than £1.8 million in set-up and marketing costs.
But just four years after the new company was born, reports in this week's local newspapers suggest SB Cares, a limited liability partnership (LLP), could be wound up with the vital care service, its £17 million annual budget, and its workforce of over 500 full time equivalents taken back in-house.
The business has been beset by management and financial problems throughout its short life. SB Cares is one of only three social care Arms Length External Organisations [ALEOs] in Scotland, the others are based in Glasgow (Cordia) and Aberdeen (Bon Accord).
Scottish Borders Council's elected members appear to have been highly impressed after local authority managers called in consultants to draw up a business case for the transfer of the service. Not one councillor voted against the proposals when they were considered in public in June and October 2014, and finally in private in January 2015.
The business case had been produced by 'specialist' firm Care & Health Solutions, based in Wolverhampton, and was backed up by a series of highly positive reports and recommendations from the council's chief executive's department. A predicted saving of more than £5 million on the cost of delivering the service was included in the paperwork.
At the same time the June 2014 report to council proposed: "To ensure that the LLP can focus on the delivery of the benefits and shift towards a more flexible way of working offering additional services across the Borders additional running costs for staff management, property and marketing of the new services will be required of £1.827 million over 5 years.”
And in October of that year another report advocating the go-ahead for the ALEO warned: "Doing nothing is not an option".
The same report revealed: "“A recent visit to Cordia (Glasgow’s social care ALEO) by Officers and Members was helpful to discuss in practice the relationship between Glasgow City Council and Cordia, how efficiencies have been made, and business opportunities that have been developed."
The latest report to members, which was only published a few weeks ago and covered the 2018/19 financial year showed a comprehensive loss for SB Cares of £2.573 million, up from £735,000 in 2017/18. According to that report: "The major movement in the financial statements was a net increase of £3 million in the actuarial valuation of the LLP's pension liability obligation".
Over the twelve months covered by the report the company's hard-working staff supported over 12,000 clients involving 15,000 visits per week to enable 900 people to remain in their own homes.
A paragraph entitled Financial Management declared: "Cash flow management procedures are in place to ensure that resources are managed effectively". Cumulative 'savings' of £3.656 million were also recorded.
Net liabilities of £7.278 million showed a considerable increase from the 2017/18 figure of £4.705 million. In conclusion members were told: "The report and financial statements for the year demonstrate that SB Cares continues to improve and drive forward with its service and financial priorities".
However, a council statement published on the Southern Reporter's website says: "As part of our Fit for 2024 transformation programme, the council is conducting a review of all services. This includes SB Cares as a council-owned limited liability partnership and is aimed at ensuring that we provide the best possible care to the people of the Scottish Borders.
"A report is being prepared for full council at the end of September which will consider the future operating arrangements for SB Cares as part of the Fit for 2024 programme. This may include a recommendation to bring SB Cares back under the direct control of Scottish Borders Council. SB Cares staff have been briefed on this position and reassured that, should there be any changes, these will not affect their terms and conditions. Further staff briefings will be provided in due course.”
In 2018 a special report on ALEOs by public spending watchdog Audit Scotland included the following passage: "Councils should consider the risks associated with ALEOs at the outset. Oversight, accountability and good management are essential. In managing ALEOs, councils should continue to apply the principles in the Following the Public Pound Code."
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