Northamptonshire County Council, which has been effectively declared bankrupt, has revealed it is spending up to £2m a year on empty care beds.
In its stabilisation plan, which was published on Monday, the council revealed that elderly care centres run by Shaw healthcare under a 25-year contract had been operating at below 30-50% occupancy for several years.
Mick Young, the former Labour leader of the council when the deal was negotiated in 2003, told the BBC that mistakes had been made.
Current council leader Matt Golby described the agreement as “one of the worst PFI contracts in the country”.
The contract entails the provision of 204 rehabilitation care beds at four care centres operated by Shaw healthcare.
The poor occupancy levels at the centres have been caused by some patients not qualifying for beds that are being paid for at a cost of between £1.5m and £2m each year. A further £1m – £1.6m is being spent each year on finding alternative beds for these patients who do not qualify for the beds.
A Department of Health and Social Care spokesman said: “We have been approached by Northamptonshire County Council with regard to the council’s PFI contract with Shaw healthcare that covers areas of social care and are exploring with all parties how the contract is working before any further action is taken.”
A spokesperson for Shaw healthcare said: “It would be inappropriate for us to comment at this stage but we can confirm that we do have a PFI contract with the council and that we remain committed to working with the council to help it provide the best value for money for the council and the people of Northamptonshire.”
Shaw healthcare operates a number of contracts with local authorities across the country. It recently clinched a £21m deal with Liverpool council (see Shaw healthcare clinches £21m care home deal).