Residential care in Oxfordshire has entered a new era as responsibility for council-run homes for older people has passed to a non-profit making organisation.

The care of 800 older people living in residential homes passed to the Oxfordshire Care Partnership in December, last year.

Under the agreement, OCP, made up of the Orders of St John Care Trust and the Bedfordshire Pilgrims Housing Association, will manage the county's 19 care homes for at least 25 years on a long-term lease.

The county council, in its role as landlord, has a seat on the board that will run the service and continue to ensure high care standards through the transfer contract.

The deal, worth £146m, will enable OCP to borrow and apply for other funding to upgrade the homes.

Martin Watts, chief executive of the Orders of St John Care Trust, said: "We believe that we have agreed with the county council a very comprehensive and forward-looking plan for Oxfordshire's homes for the next 25 years.

"It will allow for further development of care. We will be adding nursing care to the existing residential care offered."

The move met opposition when it was first announced, but the county council claims the transfer was the only solution to prevent forced closures.

Ten of the county's homes do not meet new national care standards that will come into force in 2007 and the county council does not have the money to invest in an extensive rebuilding and renovation programme.

Cllr Keith Mitchell, leader of Oxfordshire County Council, said: "This is excellent news for elderly people in Oxfordshire."

Work is expected to begin in the spring on a new care home on land at the Wallingford Upper School site in St George's Road, Wallingford.

New homes are also scheduled to be built in Banbury and Didcot at the beginning of 2003.