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Mission seeks private partner for aged care facilities

Methodist Mission Northern (MMN) is exploring the possibility of selling the business of running its three Auckland residential facilities for older people to a private company. The Mission proposes to retain ownership of the facilities but lease them out to the new owner of the operating businesses on a long term basis.

MMN owns three sites – Everil Orr Village in Mt Albert, Wesley Village in Mt Eden, Franklin Village in Pukekohe. All have operated at a loss in recent years but are in prime locations with major development potential.

Co-general manager – finance and business support of the Mission Jaclyn Green says the residential facilities account for 54 percent of MMN’s business. Last year MMN had a deficit of $600,000.

Faced with inadequate government funding for the aged care sector some churches have sold their rest homes, long-stay hospitals, and dementia units. Jaclyn says MMN wants to find a way it can continue to be involved in services for older people, and in particular, provide on-going chaplaincy and social services at its three villages.

“The Mission board is mindful that these sites have been developed through bequests and contributions of people in the church and the wider public. We have a sense of stewardship, and this is why we do not want to sell them.

“By selling the operating business while retaining ownership of the land and buildings we would strip out overheads and gain rental income. This would allow us to undertake deferred maintenance and upgrade the sites” says Jaclyn.

Commercial organisations have economies of scale, links to medical centres, marketing programmes so the Mission expects they would be able to run the facilities more cost effectively.

Jaclyn says the approach the Mission board has suggested is innovative. No models for how such a partnership would work exist so there is a need to be cautious.

Currently there are about 300 residents and 250 employees at the three facilities. They and employee unions are being kept informed of developments. The proposed sale of the businesses does not include the 280 MMN employees who provide home care to 1700 older people.

The board’s priority is not to get top dollar for the businesses, according to Mission superintendent Rev Keith Taylor.

“Whoever we end up negotiating with will have a synergy of values with us. We will not be looking for the highest bidder and we will ensure the interests of our staff and residents are safeguarded.”

Keith says if the proposal goes ahead it will change the way the Mission operates. It will have financial independence and not have to constantly seek government funding for its projects.

“The aim of the Mission is to do what other social service providers don’t do. If we are not so reliant on government funds and contracts we can diversify and take on the cutting edge stuff. Some of this will be in the sector for older people.”

Members of the MMN board who are exploring the possible sale of the residential operations for older people, are Keith, Ian Souster, and Greg Wright.