Significant financial pressure on elderly care provision

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SocialCarePartyRecently published research from specialist social care property advisers HPC underlines the significant impact of financial pressure on the pattern of elderly care provision.

The research (undertaken in the 42 month period ending 30th September 2014) analyses registration data held by the Care Quality Commission – the regulatory body for care homes throughout England. It provides a fascinating insight into bed number movement within the national care home estate and the impact of financial factors on registered bed provision.

 

With approximately 200 care homes closing annually, the number of newly opened homes for the elderly marginally exceeds half that figure. After several years of local authority baseline fees failing to reach increases seen in CPI or National Minimum Wage, margins have been constantly eroded. The smaller facilities, lacking in economy of scale, have been impacted most significantly, whilst new development has focused upon the more affluent regions less reliant upon local authority funding. Commenting upon the research findings, Nigel Newton Taylor (Director of HPC) was unsurprised by this trend. “The HPC National Care Home Survey 2014 provided a clear insight into operational perception of local authority fee levels with 87% of survey respondents considering local authority fees to be less than adequate. It therefore comes as no surprise that care providers are becoming increasingly reliant upon self-fund clients in order to maintain viability”.

There is also a certain level of irony that the strengthening economy and general property market is negatively impacting upon care home provision. The upturn in the economy and the increasing availability of development funding would, prima facie, increase the likelihood of further development. However, these very factors are restraining the sector with care home operators/developers often struggling to bid competitively against alternative land use. Conversely, just as competing uses are limiting new development, so we continue to see such uses offering a potential “escape route” to struggling care home businesses with property prices for alternative use resulting in business closure and property sale becoming financially attractive.

This fascinating research is detailed in full on the HPC website www.healthcarepc.co.uk

 

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