POWYS council’s cabinet has agreed to set up a new company to run the 12 council-owned care homes in Powys.

The residential homes have been run run by private company Bupa Care Ltd for the past 15 years. The contract with Bupa is due to expire in May 2017 following a one year extension.

But the council’s cabinet has now agreed in principle to establish a local authority trading company to run homes from May next year.

The council says the decision to develop a local authority trading company has the potential to stabilise the current market and position itself as a driving force in the development of residential care services across Powys.

Councillor Stephen Hayes, cabinet member for adult services said: "The decision to commission Bupa to deliver our residential care on our behalf was the right choice at the time, and they have successfully delivered a high level of care over this period of time.

"However the financial and demographic pressures alongside national and local policy drivers mean that the council’s current provision of residential and nursing care would not be sustainable in the future. The current model would not deliver the required levels of service within available resources.

"This option has considerable potential and is in line with the council’s commissioning approach and the Social Services and Wellbeing (Wales) Act 2014.

"Retaining the current workforce is a high priority as the skills and experience of the highly trained staff will give a continuity of care and support for our residents in Powys. The council and senior managers from Bupa will work together to speak to staff, residents, families and carers about any issues or concerns they may have over the council’s decision in the coming months ahead."A spokeswoman for Bupa said: "We are proud of the high quality of care that we deliver in the 12 homes we operate in Powys, which we lease from the council."Our priority is always the wellbeing of our residents. We are speaking to them, their families and our people to update them and reassure them that nothing is going to change immediately. We will continue to deliver the high quality of care residents expect of us.“No final decision has been made and the council will take the next few months to review arrangements and decide what to do next.”