An arm’s length company set up to look after older people in Aberdeen and save the city council money has plunged £1million into the red.
Bon Accord Care (BAC) was launched by the local authority’s Labour-led administration in August 2013 – but has proved highly controversial.
Both the SNP and Liberal Democrat groups refused to support the creation of the new organisation, which supporters said would help to address the needs of an ageing population.
SNP councillors will table a series of questions at today’s full council next week, asking for clarity on the operating deficit and also the quality of care being provided.
SNP group spokesman Graham Dickson claimed standards had dropped from grade A at the time of transfer to grade C now, based on first-hand accounts from concerned members of staff.
The new company – which remains 100% owned by the council – took over a number of services including care at home, residential care, rehabilitation, occupational therapy and community meals. About 800 staff were also transferred.
The firm is the first of its kind in Scotland, and is modelled on Essex Cares, set up by Essex County Council.
Opposition councillors said they had received confirmation that Bon Accord Care would only break even for 2014-15 after an “uplift” from the council – believed to be in the region of £1million – was factored in.
Bon Accord Care Ltd commissions services on behalf of the council, and finance convener Willie Young said that the additional spend would be absorbed by the local authority’s social care budget for the year ahead.
However, SNP group leader Callum McCaig said questions had to be answered about where the money was going.
He said: “If this is not a problem, and the finance convener is happy with a million-pound overspend, then he is quite frankly an embarrassment and is not fit to be in charge of the city’s money.
“Sometimes it is time to stop spinning and actually do your job.
“The entire point in setting up this organisation and going through the turmoil that was around its establishment was that it would deliver better care to the citizens of Aberdeen and reduce costs. It seems to be doing neither of these things particularly well.
“If I were in the council administration, I would be urgently seeking meetings with those responsible and demand their action plan for how they get out of the mess they are in.”
A report to elected members in October said the first year of operation for Bon Accord Care produced challenges “that any new business faces”, with pressures caused by savings targets, agency costs, absence rates and additional overheads.
Council officials are in talks with all of the authority’s arm’s length organisations, and will have to ensure that they at least reach the “break-even” point by the time of February’s budget-setting meeting.
Labour councillor Mr Young said he was comfortable with the way Bon Accord Care was operating so far.
He said: “They are a new company, it takes time for these things to work and they are at the start, but the most gratifying thing for us is that they are commissioning services.
“That is what they do for us, the more services we commission the more we pay. I have meetings with Bon Accord Care on a regular basis and our officers have got things under control.
“Let’s reflect upon the fact that the SNP presided over £127million in budget cuts and let’s reflect on the fact that when (arm’s length body) Sport Aberdeen was set up, they needed more money and they lost a chief executive before they even got started.”