Southwark Council is reviewing its approach to delivering a new nursing home on Asylum Road, following concerns raised by the Health and Social Care Scrutiny Commission. The commission is seeking to ensure that all available options to deliver the home have been thoroughly considered, and that embarking on a market-led approach was not premature.
The commission met on Wednesday 2 July 2025 to discuss a report examining the delivery of the new nursing home. The report is available as part of the Public Reports Pack.
Currently, the council is pursuing a market-led approach, inviting proposals from the market for a nil-cost solution. This involves offering a long lease on the land to attract quality providers, such as independent family-run businesses acting at sufficient scale to have capacity to deliver. However, the commission expressed concerns that sufficient consideration had not been given to alternative delivery options, such as direct delivery, a partnership with the NHS, or a partnership with a charitable association.
The report includes a table outlining the advantages and disadvantages of different delivery models. For example, under direct delivery, an advantage is that Ownership of the building offers the highest level of security. Even if a care home operator departs the home remains and a new care home operator can be re commissioned.
A disadvantage is that Capital is required, which is under pressure. The majority of the previous Capital Monitor capital allocation has been spent. The priority for capital is housing. A loan would put a liability on the council's account.
For partnership with the NHS and/or a Charitable Association, an advantage is that The NHS or third sector charitable association involvement could offset capital or revenue costs
and Third sector involvement is associated with better care.
A disadvantage is that The local NHS has indicated that recruitment is a barrier to delivering nursing care.
The commission also highlighted the precarious nature of care homes in Southwark, with the borough having lost three homes over the last decade, and the variable quality of provision. While inadequate funding because of stretched council budgets has been given as one reason, this was not substantiated by the evidence the commission heard. Rather officers and academic reports indicated the cause could often be traced to the business model used by large providers, which frequently utilizes a buy and lease back arrangement where the building asset is rented out to a care home operator. This is particularly problematic when this is associated with large levels of debt loaded onto the building, through the involvement of Private Equity, and recouped through high rents.
The commission noted that while a market-led approach would alleviate the immediate capital burden on the council, it may potentially place a higher burden on the council's revenue budget over time for places it is required to fund, and place a greater strain on resident budgets, thus exhausting them faster. This is because commercial operators in privately owned building generally charge more than operators in council owned buildings.
Cabinet approval to proceed with the land 'sale' (a Long lease) will be sought in around September 2025. The report recommended that a Gateway 0 options appraisal report be produced for the cabinet to ensure a more thorough process is followed and that all the delivery options are fully considered. This should include consideration of direct delivery, a partnership with the NHS, and a partnership with a charitable association.
The commission's work programme for 2025-26 includes a mini review of the care nursing care home model delivery, including looking at nursing home space standards. The work programme for 2025-26 includes a mini review of the Care Nursing Care Home model delivery, including looking at Nursing Home Space standards: Care Nursing Care Home model delivery ( mini review) cabinet response and tracking delivery ( including looking at Nursing Home Space standards)
The Health and Social Care Scrutiny Commission agenda and minutes can be found on the Southwark Council Website.