Option 4: Selling Allison House to another organisation to run as a going concern
What would this mean in practice?
Advertise Allison House for sale as a ‘going concern’ on the open market.
If an acceptable offer is made, enter into negotiations and secure the sale of the site with the care home business as a going concern.
We would cease owning and operating Allison House.
A new care home provider would operate Allison House as a care home.
People who live at Allison House would remain in the home and new people would continue to be admitted.
The staff in the home would have the right to transfer under TUPE regulations. It is most likely that the new company would retain the staff at Allison House, but they could be required to work anywhere within the new organisation.
We would not enter into any specific contractual arrangement with the new provider other than for existing people who reside at Allison House.
Cost
We would oversee disposal which would necessarily include the procurement of specialist external support in marketing care provision. The estimated fees are around 2% of sale value (plus legal costs).
Estimated advertising cost, including a full information pack, promotion, and direct approach to care home operators, estimated at £10k.
Approximate timescales
- Appoint external marketing consultant – 2 months
- Create information pack – 2 months
- Advertise Allison House for sale – 3 months
- Execution of sale – 6 months
Assumptions
An operator is willing to purchase a home that does not meet modern standards and is able to get the home registered by CQC (Care Quality Commission).
An operator is willing to purchase an old building that is in need of significant investment and is considered to be smaller than what most operators require to be economically viable.
An operator is willing to take on the financial commitments that a TUPE transfer would entail (notably pension liabilities).
Advantages
The people who reside at Allison House can remain in the home. However, a change of care home operator may lead to changes in the way care is delivered and how the home is managed.
Existing staff would transfer to the new provider and are likely to remain working at the home.
We would no longer have to invest significant funds to maintain and repair an old building that does not meet standards.
We would receive some income from the sale of Allison House.
Disadvantages
We are unlikely to find an operator to purchase Allison House as it does not meet modern standards, the building is old so requires considerable investment and it is smaller than what most operators are looking for.
The existing and future people living at the home would not live in accommodation that meets modern standards.
The new operator may change the fee rates. This could have a significant impact on the fees charged to self-funders.
An incoming operator may change care practices within the home.
It would be very difficult to guarantee the future of the home under a new operator.
The fact that TUPE regulations would apply would affect the operating costs and will deter some operators and/or impact the sale value.