Northamptonshire CC is to bring adult social care services provided by a company it created back in house due to concerns over the firm’s financial viability.
Proposals from director of adult services Anna Earnshaw, agreed by Northampton’s cabinet on Tuesday, include the creation of a new directorate for adults, communities and wellbeing in order to establish a “simplified” structure.
This will involve placing Olympus Care Services, which was established in 2013 and provides services including dementia care and residential homes to 2,000 people, within the new directorate.
Olympus was a key part of Northamptonshire’s “next generation council” model under which the county was reorganised into a small retained organisation, NCC Group, which ”‘right-sourced’ safeguarding and wellbeing outcomes through a federation of bespoke, publically owned social enterprises, companies limited by guarantee, trusts and strategic alliance partnerships”.
Ms Earnshaw said auditors had raised concerns about the company’s financial health and its reserves were low.
She added the company, which is wholly owned by the council, had remained heavily reliant on Northampton’s block contract, which has reduced year on year due to the council’s “financial challenges”, to fund its core services.
Ms Earnshaw said: “While Olympus has provided savings and grown income it can no longer match delivery of its contract within the amount provided and threatens the ability to invest in the innovation and growth of services moving forward, therefore in some cases, making services unviable.
“By aligning resources and plans within a new directorate… our ability to do this more effectively and to ensure the maximum use and utilisation of our own frontline services is considerably strengthened.”
A peer review of Northamptonshire by the Local Government Association found there were “clear advantages in ways of working, management efficient, shared resources and financially” from placing all adult social care services under a single management structure.
Ms Earnshaw added: “The financial advantages include reduced support costs, buildings and infrastructure, VAT and reduced governance structures.”
Earlier this month communities secretary Sajid Javid appointed an inspector to examine concerns regarding Northamptonshire CC’s financial management and governance.
A report by the council’s director of finance Mark McLaughlin, also considered by cabinet on Tuesday, said Northamptonshire is facing a £10.3m overspend in 2017-18 largely due to pressures on adult social care services, while £27m in-year savings are in doubt.