Sefton New Directions Ltd was established by Sefton Council in January 2007 as an arms-length to provide adult social care services across the borough. The company provides a wide range of adult social care services to support people with learning and physical disabilities, dementia, mental health issues, and age-related conditions.
It is governed by a Board of Directors including two Labour Councillors and one former Labour Councillor.
It was last inspected by the CQC in November 2019 when its services were rated as Good.
Accounts published at Companies House show that Turnover in 2022 was £10,365,292 and a profit was recorded as £12,282.
Turnover in 2023 was shown as £9,775,726 but the accounts showed a loss of £891,130.
Sefton Council is the 100% shareholder and guarantor of Sefton New Directions Ltd and therefore any losses will impact on the Council’s finances.
Sefton New Directions employs 357 staff with costs in 2023 totalling £8,456,116.
Sefton Council’s Cabinet on 5 th December 2024 discussed the budget position for this arms-length company for the year 2025/26 as the projected budget gap had increased to £1.135m.
However, as a result of revised business operations agreed by Cabinet in January 2024 the company hopes to reduce this deficit by £0.889m, leaving a residual shortfall of £0.240m. This position does not take account of any fee uplift or inflation increase on existing contracts for 2025/26. Discussions with the company and the wider care sector are about to commence. In the event that the fee increase does not meet this gap in full, further savings will need to be delivered from the company to set a balanced budget.
The Cabinet report is silent on how the Labour Government’s budgetary changes to Employer’s National Insurance will impact on the cost of running Sefton New Directions. If this additional taxation cannot be absorbed by Sefton New Directions Ltd then the only option is for the company to increases its charges for the services it provides to Sefton Council. This of course will worsen the Council’s already challenging adult social care budget.
Sefton’s Labour Council commended the historic budget delivered by the Labour Government on 30 th October 2024, as welcomed a new co-operative and collaborative way of working with Local Government. They seem to have overlooked the cost burden on companies as a result of the changes in Employer’s NI contributions, including those businesses providing services to Sefton Council.
These changes will undoubtedly impact on the cost of Social Care services provided by Sefton New Directions Ltd, as an arms-length company, and on the social care costs of all the other private sector care providers who support the Council’s care work.
The Labour Government’s punitive tax on employment will also adversely impact on Sefton Council’s other arms-length companies, such as Sefton Hospitality Operations Ltd and Sandway Homes Ltd.
One might argue that the effects of the Government’s budget are outside the control of our local Council. However, rather than commending the budget, it would have been more appropriate if our local Labour councillors first examined the impact of this harmful budget on our local companies, their employees and the services they provide.
