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    News, views and updates from Moorcroft Property Guardians.

2016 - A Challenging Year For Care Homes?

The Government’s approach to austerity is without question having an impact on all parts of the country.  One area which is being hit particularly hard is the social care sector with some commentators predicting that 2016 will see a crisis developing for some care home operators.

A recent article in the Guardian predicted that 2016 will see many of the smaller residential care homes forced to close due to a ‘perfect storm’ of local authority funding cuts and the planned increase in the national living wage to £8.25 per hour – simply the model for these smaller homes could make it difficult for some of them to keep trading.

This article goes on to explain that a recent study of what is a fair weekly charge for a place in a residential care came to the conclusion that the figure should be in the region of £554.  This ‘fair’ figure can be looked at against the background of local authority funding available for those people who need help with their care in later life and have a funded place in a privately run home.  For these residents, some local authorities have reduced the amount they pay the private operators for the places to £474 – a big difference.  At the same time, some of these local authorities are insisting that in April, their suppliers agree to pay the National Living Wage, further increasing costs to the suppliers.

Many of these small care homes are able to continue operating due to higher charges being paid by private ‘self-funders’ which in essence helps to subsidise the lower income received by residents supported by the local authorities.  This is fine for those operators who have a higher percentage of private people in their care, but what about those where the percentage is much lower?

If the predictions of lots of homes closing comes true, the question is what will happen to all these properties?  The number of care places available throughout the UK has dropped by 3,000 in the last year so this isn’t a growth area for new operators looking to expand and open new sites, despite an aging population. 

This declining trend indicates that the closed homes are likely to remain empty for some time and with that there is another problem generated as to how to protect the value of the property and reduce metal theft and vandalism.

We are helping a number of care homes throughout the UK with protecting the closed homes until the property can be sold.  The Guardian model is perfect for these properties and helps to remove one of the very many headaches facing these owners.

If you have a property that you would like help with, please get in touch with us by contacting Carl Gledhill on carl.gledhill@moorcroftpg.com or call 0333 7000 130