Slough: Care homes plan in Chalvey shelved

SLOUGH Council is having to bail out of a project to build specialist care homes in order to reduce its gargantuan borrowing debt.

Plans to build 60 extra care home facilities on a plot of land just north of the Scottish and Southern Electricity Depot and between Chalvey High Street and Alexandra Road were cancelled last year. Plans to build a GP surgery are still going ahead.

This also involved leasing the land for 40 years with income from residents to cover the construction and lease rental costs.

The council took it off its five-year capital programme, which outlines projects and highway works the council is funding and undertaking, to reduce its borrowing.

But schemes had to be axed off the programme in order to shave off £90m of borrowing. Finance officers have unearthed that the local authority is £760m in borrowing debt and is having to sell off up to £600m-worth of its assets to reduce this.

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The council effectively declared bankruptcy in July 2021. Over time, it has been uncovered that it is facing a £479m black hole in its budget and is needing to save £20m every year until 2029.

It has now withdrawn from its partnership agreement to develop the site but is facing costs to back out of its deal.

In 2020, 30 companies were engaging with Slough Borough Council bidding for the extra care contract.

According to council finance papers, £600,000 of development costs of the cancelled project will now have to be written off and be covered by funds from the selling of its assets.

The council is receiving no financial benefit from the 40-year lease and the contract is now recognised as an ‘onerous contract,’ which means the £4.5m unavoidable costs of meeting its obligations exceed the benefits from it.

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Finance officers also found £2m had been ‘incorrectly capitalised’ even though ownership of the land did not transfer to the council.

Council leader James Swindlehurst said at a full council meeting on the budget in March said they refused to continue with development as they “can’t guarantee” they need the extra care beds.

He said: “Because we’re not pursuing the extra care, we have a liability if things remain the same, but we have very good relations with the doctor and as overtime, we’re in a position to address all these issues, we’ll be revisiting that to get out of that liability.”

An update report states negotiations are ongoing with the landlord regarding the future of the lease.

Despite the extra homes being scrapped, works to build a new GP surgery are still going ahead as it is funded by the NHS and the GP practice.

A council spokesperson said clearance work on half of the site for the surgery’s construction has just started.

Slough Observer | News