PLANS to build a specialist care home could still go ahead but without the involvement of a cash-strapped council as it is set to walk away.

Slough Borough Council has terminated its 42-year lease agreement with Bharani Enterprise Ltd (BEL), which was signed in 2020, in order to bail out of the Chalvey Extra Care Housing scheme.

The £15m proposal was to build 60 one and two-bed extra care homes on a brownfield site at Greenwatt Way with health and residential care facilities adjacent to the new primary care facilities.

The local authority, which effectively declared bankruptcy in 2021, is cutting back on its capital projects, as well as selling up to £600m of its assets, in order to reduce its £760m borrowing debt.

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A report presented to senior councillors at a cabinet meeting stated this will save £12.7m but surrendering the lease to BEL will cost the council a one-off payment of £1m plus VAT.

Officers considered this severance payment as ‘value for money’ as it will save the council £5m in lease rental payments over the next 40 years.

Last year, the council confirmed it was backing away from the Chalvey project after a report revealed it will have to write off £600,000 of development costs of the scheme, which will be covered by asset sales.

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

Speaking at the meeting on Monday, January 16, council leader James Swindlehurst (Lab: Cippenham Green) said:” The benefit to the Chalvey public of a modern doctors practice in the centre of the community is still being delivered and by setting us free of the obligations in relation to the extra care beds, [the site owner] is free to do what he wants, which may still be an extra care facility but it won’t be ours.”

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Senior councillors also agreed to add an overage on the Bharani Medical Centre at 450 Bath Road, which would effectively trigger a mechanism that would allow the council to receive additional funds after the sale’s completion if development takes place at the site.

The council sold the freehold to Dr. Kumar, who is the director and shareholder of BEL, in 1993 to redevelop the GP practice. He increased the area of the property the next year and obtained planning permission in 2003 to increase it further, which was not carried out.

Although the report states the concept for new extra care housing was ‘reasonable,’ it criticised members and the council for bad project management, poor financial advice and governance, and the business case to carry out the scheme was ‘lacking’.

Cllr Rob Anderson (Lab: Britwell & Northborough), lead member for financial oversight, said it was a “no brainer” to back away from the scheme as costs have gone up and the financial returns wouldn’t pay the council’s investment into it.