Two councils, two very different approaches to retirement housing

It is interesting to compare the Millbrook development in Exeter with PegasusLife’s at the Knowle, Sidmouth.

At Millbrook [the retirement complex in Exeter, Exeter City Council being the planning authority] the development was considered to be C3 (dwelling houses) and therefore attracted affordable housing provision which consisted of a payment to the Council of £5.65 million plus the transfer of land at no cost to enable the Council to construct a public extra care facility on the site. In addition the developer contributed almost £300,000 towards sports facilities and £35,000 towards archeological recording.

And what are PegasusLife, who are backed by Oaktree, a billion-dollar equity giant with offshore tax-haven connnections, contributing?

Answer: nothing, whether the development is adjudged to be C2 (residential institution) or C3. Unless of course, you include an information board to tell you where the elegant lawn terraces in the public gardens used to be.

So how many “affordable” houses (or other provision) is East Devon losing out on?

Casino Capitalism comes to Sidmouth?

The recently-leaked ‘Paradise Papers’ on tax havens seem to have revealed an interesting side to the activities of the billion-dollar US equity giant behind Pegasus Life the developer currently appealing EDDC’s refusal to give it planning permission to build 113 luxury flats for old people at Knowle in Sidmouth.

As the Pegasus Life website proudly proclaims, Oaktree Capital Management founded the company in 2012:

The Paradise Papers suggest that, at about the same time, Oaktree was setting up a joint venture with Australian and Chinese billionaires to fund a 3.2 billion dollar casino in Macau through the offices of legal firm Appleby in the the British Virgin Islands tax haven:

Appleby became alarmed about the refusal of Oaktree and its partners to allow identity checks on its shareholders – the cornerstone of global efforts to stop money laundering and the financing of terrorism.

Oaktree and the others allegedly threatened to take their business elsewhere if Appleby insisted on the checks. Appleby didn’t, and the joint venture was duly incorporated in the British Virgin Isles with the shareholders remaining secret! The Casino opened in 2015.

All this is literally thousands of miles from the fond hope expressed by Philip Hammond in this week’s budget speech that local homes should be provided by small local companies with a real stake in their community.

Howard Phillips, current CEO of PegasusLife, was, until 31/08/2012, CEO of McCarthy & Stone. He led the restructuring of McCarthy & Stone’s £900M debt and under his watch the company is alleged to have engaged in the dubious practices exposed by Ch 4 Dispatches that year.

On 24 September 2012 a Channel 4 Dispatches programme on retirement leasehold was a brilliant example of television journalism that was extremely damaging to both McCarthy and Stone, and to Peverel, including their effect on this site:

“Councils forced to use emergency cash to pay for social care as funding shortfall grows”

“Councils are being forced to spend billions of pounds of their emergency cash reserves on social care amid a significant funding shortfall, official documents reveal.

Analysis produced by the Office for Budget Responsibility (OBR) to accompany the Autumn Budget shows that English councils withdrew £1.4bn from emergency reserves last year.

They are forecast to have to draw down a further £1.7bn by 2020 – significantly more than the £0.9bn the OBR estimated in March.

Experts said relying on reserves to fund social care was “unsustainable” and “a crisis in the making”.

Because they have a legal duty to provide care to those who need it, councils have little choice but to find the cash to fund increasingly in-demand services or else risk breaking the law.

Many are therefore going significantly over their allocated budgets. More than half (53 per cent) of councils expect to overspend on adult social care this year, by an average of £21m.

Two-thirds of authorities that are currently overspending on social care plug the gap by utilising council reserves.

These funds are designed to safeguard councils from an event such as a recession and ensure they have enough resources to maintain services if circumstances change.

However, the funding gap in social care means many are being forced to use the funds to cover day-to-day spending, raising the prospect that they could be plunged into crisis in the face of an economic downturn or financial crisis.

In 2014, Eric Pickles, then the Communities Secretary, accused town halls of “pleading poverty” and told them to start spending the money set aside for a rainy day.

English councils currently have total reserves of around £23bn – down from £25bn two years ago.

However, MPs and local government leaders said the practice of using emergency funds to pay for regular spending was dangerous and “unsustainable”, as councils will eventually run out of cash.

Labour’s Clive Betts, chair of the Communities and Local Government Select Committee, told The Independent: “This is a matter of real concern.

“There was nothing in the Budget on social care. There is a crisis of funding for social care and drawing on reserves simply postpones the day the money runs out.

“This is not how councils should be funding social care. At some point the Government has to recognise this and put a proper funding regime in place.

“This is a crisis in the making. There’s a funding crisis in the here and now and this is just postponing the consequences.”

Mr Betts said the reliance on reserves also creates a postcode lottery because some councils have reserves they can draw on whereas others do not.

The OBR said councils are having to go over budget by more and more each year and rely increasingly on reserves.

Town halls have been overspending on children’s social services since 2010-11 and on adult social care since 2014-15.

Last year, councils in England overspent on their entire non-education budgets for the first time since the financial crisis, largely as a result of the cost of providing social care. Previously, under-spending elsewhere, such as on transport, made up for overspending on care services.

Amid growing concern over the funding shortfall, in March the Government announced a £2bn cash boost for social care. Town halls welcomed the increase but said it was not enough to meet demand.”

DCC Health Scrutiny Committee – not fit for purpose

The DCC Health Scrutiny Committee lurches from poor practice to bad practice to utter chaos under the continued Chairmanship of Sarah Randall-Johnson

Can you imagine saying you will vote against questioning NHS Property Services about their intentions on the future of community hospitals which they now own “because they might not come”! And Randall-Johnson saying she is “not aware of any threat to any community hospital!!!

[CCGs have been offered match funding from the government for any properties sold in their areas]

Claire Wright’s Blog:

NHS Property Services will be invited to attend the next Health and Adult Care Scrutiny Committee in January.

But my simple request prompted a debate lasting over half an hour, at Tuesday’s meeting (21 November).

The lengthy and baffling discussion gave a poor impression of the committee in my view, with some Conservative councillors claiming confusion and dismissing the proposal several times as “premature.”

It all started off with a presentation to the committee by Independent councillor, Martin Shaw, under the final work plan agenda item.

Cllr Shaw rightly pointed out how many people were concerned about the potential loss of the hospital buildings, that they had put their own money into them and still there was no clarity over their future, yet NEW Devon CCG were (or at least would very soon be) paying large sums of money in rent each year when previously they owned the buildings outright.

NHS Property Services, a private company wholly owned by the Secretary of State for Health, set up under the Health and Social Care Act 2012, acquired the ownership of 12 community hospitals in Eastern Devon at the beginning of this year.

Given that the NEW Devon CCG is one of three most financially challenged health trusts in the country and must make huge cuts to try and stem a deficit of over £400m by 2020, people’s concerns about the future of the hospitals are very valid.

Following my proposal to invite NHS Property Services to the January meeting, chair, Sara Randall Johnson said there was a full agenda for the next meeting so it may not be possible to include it. She said that she was not aware that there was a threat to any community hospital.

Liberal Democrat, Brian Greenslade said NHS PS had been invited previously but questions had been remained unanswered and so should be invited again.

Conservative, Phil Twiss, who represents Honiton which has lost its own hospital beds, claimed in a number of long statements that it was “premature” to invite the company because the future of the buildings had not yet been decided.

He later added that they wouldn’t come anyway.

I replied that waiting until the March meeting was far too long and could mean that decisions were already made. Surely we need to talk to NHS PS and the CCG before their decisions?

I attempted to explain again why it was important we invited the company to the January meeting.

But apparently confusion reigned.

Conservative members became very fixated with the legacy issue, even though I had made it clear that it was about questioning NHS PS and the CCG about their plans on the future of community hospitals and the legacy issue was only part of that.

Chair, Sara Randall Johnson, suggested holding a meeting first to agree some questions to ask NHS PS. I have not seen this approach in my four and a half years as a member of the committee.

I had to make my proposal numerous times, while one or two persistent Conservative members continued to challenge it.

There was an amendment by Liberal Democrat, Nick Way, who wanted a spotlight review into the issue as well.

Phil Twiss then changed his tack and claimed there was no point in asking the company to attend as they wouldn’t come. He was in favour of a spotlight review instead (spotlight reviews are held in private).

But when the vote finally was taken, it was on the spotlight review amendment and not my original proposal to invite NHS PS to the next meeting …

I tried to intervene. Fortunately, the officers corrected matters… and then the majority of the committee voted in favour of my proposal. Finally.

My proposal couldn’t have been more straightforward or uncomplicated. It was entirely within the committee’s remit.

It was also within a couple of hours of hearing the county solicitor’s presentation about how scrutiny should do its job properly. Or be culpable. See this blogpost here –

Here’s the webcast. It is the final item on the agenda –

Pic: Me exasperated!”