A COMPANY set up to take care of hundreds of elderly Southend residents is on the brink of insolvency and has threatened to cut day care services.

Southend Care Ltd, created by Southend Council, is set to make a £180,000 loss this year even with a 4.5 per cent increase in payments from the council to block book beds.

Southend Care was set up to provide statutory social care comparable with other providers and was only required to break even.

However, in a financial report to Southend Council’s shareholder board which met on Monday, it was revealed the company would also be looking at a £490,000 loss next year.

Southend Care chairman Peter Little admitted the company could not stay solvent with such losses and day care services may have to be cut back.

The shareholder board declined to sign off its own company’s business plan and called for an urgent meeting to work out a way forward for the company.

Speaking after the meeting Tony Cox, leader of the council which is currently battling a £14million deficit, said: “There was no way I could approve a business plan that was going to lead to insolvency. This is the first time we’ve seen it. It feels like just another legacy issue which is a real problem and something that I can’t ignore.

“The committee agreed with me, there is no way – from a 100 per cent council owned company – that I can accept a business plan where numbers don’t stack up and in their own words would lead to insolvency.”

“We’ve given them six weeks to come back with a revised business plan and how they are going to make the numbers balance.

”No one is saying they have to make a profit, but equally it’s got to financially stack up to stay still.”

In the report to the council, the company said it was looking at a “more commercially focused future”.

While the company, which recently moved into its new home at Brook Meadows House, does provide some beds for the private market it said it could look at expanding this.

Southend care has 300 staff and supports more than 1,000 people per year, including some with very complex needs.

Its range of services includes day care, residential care, supported living, complex reablement and supported employment.