Ashley Homes joins forces with private sector to pursue tender for a PFI (public private finance initiative) scheme

In 2006 three Neighbourhood Resource Centres in Greenwich received the national Public Private Finance Award for the best operational local government project. This article charts the success of the not-for-profit care company Ashley Homes in creating a consortium with the private sector to tender for the new specialist older care services. The article shows how the best elements of the private and voluntary sector were combined.

In 2006 the Greenwich Neighbourhood Resource Centres (NRCs) for older people were awarded the national Best Operational PFI Award. So ended a process which had begun seven years earlier when Ashley Homes, a not-for-profit care company, entered the world of the private finance initiative. It successfully competed against the private sector to win a 30-year tender to design, build and manage three new centres providing residential, nursing, intermediate, day care and specialist services for the ethnic minority elders of Greenwich.

The challenge for the voluntary sector was to maintain its not-for-profit values while working with the private sector to develop a new vision of older care services.

During the mid to late 1990s Greenwich Council, under the stewardship of David Behan, was awarded Department of Health funding for a pilot pathfinder social care PFI project to see whether the principles of the private sector could help to modernise outdated social care services.

Much of the national debate on PFI has focused on schools and hospitals with little coverage of social care PFIs. The big difference with the Greenwich pathfinder was the transfer of the operational services as well as the buildings, which is most common with PFI developments.

Many PFI health and education schemes have been condemned in the press due to high overspends, failure to meet deadlines and an erosion of public sector principles. We had a unique chance to combine the best of all sectors in the pathfinder social care PFI, using government money to build modern care services for older people that would also provide a secure future for the workforce.

As director of Ashley Homes my passion lay in improving the quality of delivery and making a difference to people’s lives. Greenwich wanted to close a number of outdated registered care homes for older people and see the three new NRCs built. Importantly, more than 150 staff would be transferred from the council and the NHS.

A consortium was created by Ashley Homes (which was the care division of a housing association) with construction company Kier Group, which part-funded and built the services. My starting point was to find a creative architect to share my vision of care with a design for dementia specialist services. Between us we shaped a model of service delivery which put the service user at its heart. The design provided spacious rooms with the latest technology the care came in the form of enough staff to meet the requirements of person-centred plans.

Tender pitch
To make the model work in terms of affordability, the local primary care trust agreed to fund ­continuing care beds within the project. This became one of the first examples of the NHS committing to a 30-year contract. The Labour council also ensured that buildings and services would revert back to the control of the council after 30 years.

Presenting our tender to the council, I had to talk about the daily life of a service user. Many of the standards any of us would expect from a good hotel formed the basis of my story. As a former council officer, I also underlined the principles of the public sector, including the protection and recognition of the terms and conditions of transferring staff. Put bluntly, I was prepared to lose the tender on price without compromising quality.

After being selected as the preferred provider, the next 12 months were spent sitting in lawyers’ offices. For me this is where the process of PFI is wrong. The costs of tendering and going through the stages of pre-qualification, invitation to tender, and best and final offer can run into hundreds of thousands of pounds. For losing bidders in the private sector, it is a considerable hit, but local authorities, which also have to pay legal costs and specialist consultants, must deal with the added pressure that this is public money being spent.

Then the legal negotiations are endless. Essentially PFI is about transferring risk from the public to the private sector so the lawyers and armies of consultants come into their own along with their hourly rates. The painstaking PFI process and costs are prohibitive for many prospective providers. If PFI, which I believe is a good model for achieving the best from the private and public sectors, is to continue then processes and costs must be streamlined with greater accountability for the use of public sector money.

The three NRCs took 18 months to be built with each one providing 60 registered care placements. Time Court, Ashgreen, and Meadows were all completed to budget and early. A key point was gaining registration from the Commission for Social Care Inspection on a set date to avoid financial penalties.

In late 2004, the task of transferring 167 service users from the outdated council homes and a hospital ward began, coupled with the transfer of the workforce from the council and NHS.

Considerable training and support went into the workforce to help them adapt to their new employer. Importantly, for the life of the contract the revenue funding for the older care services is ring-fenced.

Performance indicators
Within the PFI framework there was a requirement for key performance indicators (KPIs). Every part of the service is measured and failure to deliver results in financial penalties. I designed a handbook for the workforce, which pointed out all 80 or so KPIs – for example, the requirement to have tablecloths for every meal or to knock on a person’s bedroom door before entering. The handbook proved an excellent mechanism to put in place the right culture and person-centred approach.

The costs of a PFI scheme are high and the processes complex. Applying performance measures to penalise a not-for-profit provider sits uneasily with any surplus usually returned into the front-line delivery as opposed to a private company generating shareholders’ profit.

The introduction in 2003 of the “two-tier workforce” regulations has resulted in considerably fewer staff being transferred from councils to the private and voluntary sectors. Many councils are looking at extra-care PFI developments as an alternative to registered care or bidding for in-house registered care PFI developments.

I am pleased to have been part of the Greenwich PFI and to have challenged the polarised views of private versus public as PFI is sometimes interpreted in the media. By combining the best of the private and public sectors quality won the day and the people of Greenwich now have wonderful facilities for older people with a workforce secure in their employment for the long-term.

Mark Lloyd, a former local government officer, has worked for the past 10 years in the independent and voluntary sectors delivering registered care services. He is director of services for the Kent Community Housing Trust, a dementia specialist provider. Previously he was director of Ashley Homes, where he delivered an award-winning PFI older care development for Greenwich Council which redesigned the delivery of local services. He is also chair of the Inspire Community Trust in Bexley, a direct payments disability charity.

Training and learning
The author has provided questions about this article to guide discussion in teams. These can be viewed at and individuals’ learning from the discussion can be registered on a free, password-protected training log held on the site. This is a service from Community Care for all GSCC-registered professionals.

This article appeared in the 1 February issue of the magazine, under the headline “Take the initiative”



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