The quality of care we provide for older people in our communities is a telling barometer of how compassionate we are as a society. The quality, structure and financing of residential and nursing care has never been in sharper focus than over the past 18 months throughout the enduring global pandemic.
In the UK, around 500,000 elderly people receive care across 17,600 settings. Funding for elderly care is a political hot potato, and with projected budget deficits of £3bn across local authorities for 2022-2023, it’s not clear where the longer-term solution to deliver effective and high-quality care for the elderly lies.
FRP has worked with many care home operators over recent years (pre and post pandemic) who are experiencing financial difficulties. Whilst some of these difficulties were caused by strategic mistakes or the result of poor financial planning, it’s clear to us that the pandemic was merely a catalyst for a sector that was already creaking under the pressure of deep-rooted, structural issues that will affect every care operator in the UK - and will no doubt outlast our memories of Coronavirus.
Through our work, we have identified several key themes that contribute to these difficulties:
- staffing & legislative changes (notably recruitment and retention difficulties);
- use of technology in homes & Environmental, Social and Governance priorities and considerations; and
- financial decision making and control (impact of over-leverage and restructuring options)
We will shortly be launching a podcast series exploring each of these key themes and the issues underpinning them, with commentary from leading sector experts across the spectrum: operators, restructuring and turnaround advisors, regulators, sponsors and lenders.
We may – hopefully – be reaching the end of the pandemic, but bringing care home operators back to rude financial and operational health is far from over, and without a simple answer.