To receive and consider the above report.

The Panel received a presentation from the Head of Commissioning – Adults, Children and Health relating to the proposed transfer of the Royal Borough’s Adult Services staff and resources to Optalis, to be effective from April 2017.

It was explained that Optalis is a company wholly owned by Wokingham Borough Council, which is currently its sole shareholder. Discussions regarding a merger of services had been taking place between the Royal Borough and Wokingham Borough Council since May. The Head of Commissioning - Adult, Children and Health said the discussions centred around service quality, control and governance, risk and costs, and reiterated that the Royal Borough’s commitment was to a shared partnership with Wokingham Borough Council, not an outsourced arrangement.

A report on the merger was to be considered by Cabinet, with a recommendation to proceed to the creation and implementation of a full business case. Members were told that an agreement had been reached for the Royal Borough to take a 45 per cent share in Optalis, growing to 50 per cent over the next two years, and a consideration to purchase shareholdings in Optalis of £771,302 had been identified.

The Head of Commissioning – Adult, Children and Health said the proposed arrangement would increase the resilience of the services that the Royal Borough provides. The delivery model would combine the Royal Borough’s Adult Services budget of £29.9m gross with Wokingham’s.

The Lead Member for Adult Services and Health reiterated that staff would continue to work from their current offices and would not be transferred elsewhere if the merger were to be approved.

Mrs Holmes commented that Optalis appeared to also be having difficulty in attracting staff, noting that there were ten job vacancies advertised on their website.

Cllr Jones asked what risks to services had been identified and considered during the consultation process. The Managing Director and Strategic Director Adult, Children and Health Services said the main identifiable risks related to recruitment and retention of staff. However she added that Optalis would become the Royal Borough’s Provider of Last Resort and would be able to provide staff to work in any of the 47 care homes within the Royal Borough, should any of them encounter difficulties.

Cllr Jones said she wanted residents to be told that Adult Services were not being outsourced from the Council and that the Council would retain control of its workforce. The Lead Member for Adult Services and Health said that if Optalis made a profit, that money would be reinvested for the benefit of the Royal Borough’s residents.

Cllr Jones asked if Optalis had experience of each of the services it had been asked to provide. The Managing Director and Strategic Director Adult, Children and Health Services said the Council would be transferring services and its management structure over to Optalis, with the Deputy Director joining the Optalis Executive Board alongside their Wokingham equivalents.

Mrs Holmes asked if there was a need to consult with the CCG on the arrangements. The Managing Director and Strategic Director Adult, Children and Health Services confirmed that meetings had been held with the CCG’s Chairman, Chief Operating Officer and Finance Officer to talk about the merger plans.

Cllr Jones asked for reassurances that staff would not be relocated and that Optalis would be accountable to the Royal Borough. The Managing Director and Strategic Director Adult, Children and Health Services said staff would not be moved, save for while York House is refurbished, and the Royal Borough would retain its powers of scrutiny through its place on the Optalis board.

The Managing Director and Strategic Director Adult, Children and Health Services said that an additional £200,000 in Development Funding had been sought to ensure that there was a safe transfer of staff and services on go-live.

The Chairman asked if the Royal Borough would have equal power in the decision making process if it had a 45 per cent share of the partnership. The Managing Director and Strategic Director Adult, Children and Health Services reminded Members that the share distribution would increase to 50 per cent over time, and that it was felt any issues could be resolved.

RESOLVED: That the recommendations to Cabinet be approved and that Cabinet:

i. Delegates authority to the Managing Director/Strategic Director Adult, Children and Health Services, in consultation with the Leader of the Council and the Lead Member Adult Services, Health and Sustainability, to proceed to a full business case and broker an Inter Authority Agreement with Wokingham Borough Council and Optalis, for approval by Cabinet in December 2016.

ii. Approves the consideration for purchase of shareholdings of £771,302, to secure a 45% stake in Optalis Limited, payable on 31 March 2017 and recommends to Council that this is funded from the 2016-2017 capital programme.

iii. Confirms that the current Strategic Director of Adult, Children and Health Services will continue to deliver the statutory function of Director of Adult Social Services, see points 5.7-5.8, and will continue to manage the Deputy Director Health and Adult Social Care in order to oversee the transfer of services up to 30 June 2017 with line management responsibility then transferring to Optalis.

iv. Delegates authority to the Lead Member for Finance and the Strategic Director Adult, Children and Health Services to agree the level of resource required for support functions that should transfer to Optalis.

v. Requests £200K from the Development Fund to support the safe transfer

of staff and services to Optalis on 1 April 2017 through to 30 June 2017,

see point 4.3.