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If
the NSE implements the sense scheme at £7-9Million,
is it a going concern for the foreseeable future?
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ought to be. There will be an annual depreciation of around
£160,000 (1/50th of £8Million) that the NSE will need
to add to the charge-outs made to local councils supplying the care
residents. This is certainly a lot more attainable than
the £640,000 per annum required if the initial capital sum were
the £32Million proposed by the NSE. Failure to achieve
full recovery of costs incurred means that the NSE will need to use
cash from its fundraising activities or, in the extreme case, sell
off its assets. |
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might not be. There is a threatening management cloud on the horizon.
The NSE say that although they plan to reduce the number of care residents
by 40% the number of care staff is not forecast to fall at anything
like the same rate. Staff costs are the major cost component of running
the RCD - so unless the NSE can hike the charge-out rate to local
councils by a very substantial margin (and over and above inflation
and recent high increases) they face running their RCD at a loss,
once again facing having to use cash from its fundraising activities
or, in the extreme case, sell off its assets. |
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sense
do not have access to the NSE's future plans. Nor should it. What
we can say is that if the NSE's management are indeed bringing the
RCD back to breakeven on a full lifecycle basis then £7-9Million
is sufficient and the results will be seen quickly. This would not
be the case if instead £25Million £32 Million were
raised. |
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