Care Contract Restructuring

Our solicitors are here to advise local authorities on the process of Care Contract Restructuring, also known as Care Contract Novation.

We understand the pressures care providers face, including increased costs, staff shortages and smaller margins.

These issues can lead to providers ceasing to trade, in turn placing pressure on local authorities with care responsibilities.

As care providers increasingly look to restructure their contracts to allow for favourable VAT treatment, it is vital that local authorities conduct careful due diligence before agreeing to any contract novation.

The restructuring process is complex and not without risk.

We work closely with our clients, conducting thorough assessments to ensure they can meet their responsibilities and understand the risks while aiding the care providers.

As part of the due diligence process, we review and provide advice on the following areas:

  • Public law
  • Contract law (ensuring effective novation and due diligence on the proposed model)
  • Procurement law: variations to existing contracts under Regulation 72 Public Contracts Regulations 2015
  • Contract novation: which type is proposed and how will it treat pre-novation liabilities
  • Legal due diligence and corporate governance
  • The transparency of all proposed legal arrangements
  • The consistency of the subcontract and re-charge/management arrangements
  • Corporate Governance
  • Information about the Directors in the new company
  • Effect on contract management
  • Re-alignment of contract escalation processes

Our experts have a deep understanding of the public sector.

We also work closely with leading tax specialists, combining legal, tax and industry knowledge to provide a comprehensive end-to-end service.

  • Advising multiple local authorities on due diligence ahead of care contract novation.
  • Acting for a local authority on the implementation of multiple novations following a successful care contract due diligence process.
  • Advising a city council on the procurement of a framework agreement relating to the provision of care services to accommodate a VAT efficient group structure.

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It is vital for the legal industry to support the environmental agenda. Our specialist teams are finding more and more ways to support our clients green goals and obligations. Visit our green goals page for more details on how we can achieve green aims both for our clients in the work we do as well as a business and employer.

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