Social care offers opportunities for investors, although innovation and legislative change is needed to ensure the sector thrives.
Mark Adams is the chief executive of Community Integrated Care, a national social care charity which provides care and support to thousands of people across England and Scotland. He says the Covid-19 crisis has hastened “an existential crisis in social care”. The sector, he says, has had to absorb the massive cost of physical reconstruction of care homes to make them safer, such as installing disinfectant booths for visitors, continued use of PPE, and increased levels of staffing to enable social distancing.
Additionally, he says, some local authorities have kept some of the £3.8bn Covid-19 grant intended to pay for safety and PPE, to stay afloat themselves. Then, he says, there is the threat of a wave of Covid-19 litigation. Everything from breaches of human rights, employees suffering PTSD after working in a Covid-19 environment, or claims from families relating to the loss of loved ones.
“The Sword of Damocles is hanging over the sector,” says Adams.
Julie Rayner feels that all this pressure might mean some smaller care operators struggle to survive in the market and acquisition opportunities for organisations looking to grow their portfolio will be ripe.
Carrie Pilgrim is generally optimistic. She feels there will be an effect on short term margins as a result of the increase in operational costs and reduced occupancy, but says it is too early to understand the impact of Covid-19 into the medium term, and whether rising costs will be passed on as fee increases.
She also feels lockdown has exacerbated many older peoples’ fear of loneliness and isolation “so they may feel that this is the time to consider a lifestyle change and be part of a community such as a residential home or retirement village”.
Williams says the “massive gaps” in the level and type of services required to meet the demands of an ageing population could bring “huge investment opportunities” - both in the traditional care home sector as well as emerging sectors such as retirement care villages. Retirement villages are a model which currently represents just 0.6% of older person housing and care provision in the UK, compared to 6% in Australia.
To allow that investment to flood through, Williams says there needs to be changes to planning and leaseholder regulations. He feels, for instance, that the government’s Leaseholder Enfranchisement report published in July will have a negative impact on the retirement village sector because, he says, it has wrapped up retirement sector leasehold with the general leasehold sector, despite them being very different models.
This could cause problems in terms of investors coming into the sector, but he is hopeful that the government will recognise and correct the situation.
Housing with care
Sally Ireland says ARCO would like to see more people able to choose the ‘housing with care’ option. ARCO wants to see more commitment to thinking about longer term public health and social issues in commissioning, so that more housing with care can be built.
ARCO says the future of the sector over the next few years is linked to how much the government wants to take forward the wider leasehold reform agenda, as specific provision is needed for housing with care. “We must not be swallowed up in the broader leasehold reform agenda as the relationship is really different from that of a typical leaseholder and freeholder,” Ireland says.
The County Councils Network wants reforms to incentivise and accelerate the development of housing with care. In a report published in June and co-authored with ARCO it calls for the introduction of a new planning classification called ‘C2R’, to incentivise development of retirement communities.
This would better enable local councils to include retirement communities in their local plans, whilst reducing complexity and confusion when planning for these types of specialist developments. A new classification will also help ensure that some developers do not provide substandard retirement communities.
To encourage closer working between district councils, responsible for planning, and county councils, responsible for health, in two-tier areas, the report suggests setting up a health and housing funding pot to support the development of affordable retirement communities, as well as establishing a framework for more collaboration.
Social care reform
The government has made much of the heroism of health and social care workers during the pandemic and has promised bold steps to solve the social care “problem” which successive governments have dodged.
The pandemic has highlighted how essential social care is, working alongside the NHS and, according to Rayner, Pilgrim and Williams, has perhaps softened public opinion on paying more for services. Interviewees talked favourably of the creation of a National Care Service (NCS) as one route for change. Whatever reform looks like, it is clear that it will need an equitable, sustainable funding stream, perhaps from a variety of sources.
They suggested a number of funding options: tax on the over-40s, a hypothecated tax or additional National Insurance, or raising money from reducing the amount the state contributes to pensions.
Irene Sobowale cautions that any reforms must ensure that financial considerations don’t overshadow quality of services, “leading to a rush to the bottom.” All interviewees support Sobowale’s view that the social care sector must play a key role in determining the structure, role and powers of any NCS created.
Social return on investment
Sobowale adds that any funding system needs to recognise the social value of the sector and consider the benefits and outcomes, as well as the cost. “The social return on our investment should be part of how we are assessed, and there are tools available to help us do that,” she says.
She adds, that a hypothecated tax is a good idea, but says: “The devil will be in the detail in terms of implementation and how the funds are allocated – centralised or localised – and it will need a plan that mirrors and compliments the work of the NHS.”
Mark Adams says that whatever form a NCS takes, it would need a politically accountable central body “which might not necessarily own local delivery but should own the points system that evaluates who gets care and who doesn’t”.
He adds that “a straight mathematical equation” would determine the price for people who are eligible for care. “To provide proper care you would need to harness local government contributions topped up by central government to ensure there is a joined up and appropriate system,” he says.
In that way, he feels ministers would have a degree of accountability. “They would not be able to say ‘it’s nothing to do with me, it’s the local authority’, because they would have to own the strategic aspects.”
This central organisation could take on the current CQC inspection role with the CQC itself analysing performance data and policing it. “Technology could be used to indicate performance and figures used could allow the CQC (or a replacement body)to take a risk-based, rather than calendar, approach to inspection,” Adams says.
Given the government has an 80-seat majority, Williams says radical reform could be possible. “It could be Boris Johnson’s legacy to be the first Prime Minister in 25 years to actually tackle social care provision,” Williams says. “Let’s hope he grasps it.”