November 2017 | Volume 25 | Issue 7 CareMarkets...many providers and their tenants, within the welfare system. Long-term supported housing will also remain funded via the welfare system,

Ensuring standards are you making the grade?

In Focus

Independent. Intelligent. Insightful.CareMarketsNovember 2017 | V o l u m e 2 5 | I s s u e 7

New form of housing benefit proposed by Government

Sheltered rentBarchester’s resultsHas relying on private pay proved profitable for the provider?

CM talks to Robbie Barr about its capital restructuring and refinancing proposal

Four Seasons’ debt plan

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Introduction

SO NOW IS EXACTLY THE TIME FOR

EXPLORING NEW IDEAS

laingbuissonnews.com | NOVEMBER 2017 | 3

In this issue, the government’s proposals for a ‘sheltered rent’ scheme (p6), local authorities are spending more (p7) and Southend-on-Sea goes robotic (p8).

Meanwhile Four Seasons reveals a major refinancing plan (p40), Carewatch cuts its losses (p42) and the private market pays off for Barchester (p43).

William Laingp12

Thinking outside the boxPAPG, CareBnB and a dash of Pepper

ContentsIndependent. Intelligent. Insightful

This month…

Editor, Eleanore Robinson looks at this month’s key issues

You could hear a collective sigh of relief following government’s announcement that housing benefit is to remain within the welfare system. While the small print has yet to be ironed out, the move has been welcomed by care providers and local authorities alike.

So that is one problem ticked off from a long list faced by many providers. In this issue LaingBuisson founder William Laing proposes another solution to solve the funding crisis. And CM columnist Colin Angel looks at alternative solution to the NHS’ delayed discharge problem, so-called CareBnB.

There are so many ideas floating around on how to reform or transform the current system but very few seem to take root. At LaingBuisson’s South West Long-Term Care Conference delegates were treated to a demostration of Pepper the robot, and Southend-on-Sea Borough Council have now bought one. Is it up to sector stakeholders to now pave the way to transform care and just hope the government catches up?

Regulars6 News DCLG New ‘sheltered rent’ proposed ADASS Directors warn of budget overspend Performance Colliers International finds care home profitability drop

18 Insider Martin Green looks at the uncertainty the care crisis is causing Colin Angel examines CareBnB

25 Inprogress LNT finishes off second Oakdale home while Audley plans £125m development in London

41 Inbusiness Four Season’s capital restructure, Barchester’s results and Advinia buys 22 Bupa homes

58 Inpost Trevor Brocklebank becomes UKHCA chair while Nick Sanderson takes up the same post at ARCO

4 | NOVEMBER 2017 | CM - LaingBuisson

NHS Digital update, p7

Delegates meet Pepper at LaingBuisson’s South West Care

Conference, p14

COMMUNITY

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Events

Care MarketsCM

CMCM

28 Inconversation CM meets Somerset Care chief executive Jane Townson

31 Infocus Sarah Whitebloom examines a possible link between large operators and lower quality ratings

Features12 Indetail William Laing proposes an alternative way to fund care

14 Inconference Eleanore Robinson reports from LaingBuisson’s South West Long-term Care Conference


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William Laing presents his White Paper, p12

News


Government announces plans for ‘sheltered rent’

Move would see extra care rent and service charge remain within the welfare system

Following Prime Minister Theresa May’s announcement last week that the government is to drop a proposed cap on housing benefit,

it has set out proposals for a ‘sheltered rent’ for sheltered and extra care hous-ing.

The Department for Communities and Local Government (DCLG) said this proposal would keep rent and service charge ‘at an appropriate level, protecting the housing needs of older and vulnerable people’ and, crucially for many providers and their tenants, within the welfare system.

Long-term supported housing will also remain funded via the welfare system, as it is currently and the government as pledged to ‘will work with the sector to manage costs and ensure the best outcomes for tenants, whilst providing the sector with the certainty of future funding that it needs’.

Social housing regulator the Homes and Community Agency will use existing powers to regulate gross eligible rent (rent inclusive of eligible service charges) for sheltered and extra care housing under a new Rent Standard, in the way it does for Affordable Rent.

DCLG said in the consultation document: ‘The Sheltered Rent approach means that we will set an overall cap on the amount that providers can charge in gross eligible rent on each unit of sheltered or extra care provision. It will also, as we currently do for net rents, cap annual increases. It will be determined in accordance with the following model:

‘Sheltered Rent = ((Formula rent +/- 10% flexibility for supported housing) + (£X for eligible service charge) up to a level of £Y).

‘We have committed to bring existing supply into the system at their existing

level. New supply will be subject to the cap.’

This will apply from April 2020 but, where relevant, providers will need to continue to comply with the rent reduction requirements to the end of their 2019-20 rent year.

Furthermore, the government has already announced its intention to reinstate the previous CPI+1% limit on annual rent increases for five years after

the end of the rent reduction period and it will consider how this will apply to sheltered rent, through the consultation. It will also further consult with the sector to agree an exact definition of ‘sheltered’ and ‘extra care’ for the purposes of this new funding model.

DCLG said this model offers long-term funding sustainability, and important but proportionate new cost control and oversight measures.

There will also be a ring-fenced grant to local authorities by April 2020 to provide short-term and emergency housing.

Minister for Family Support, Housing

and Child Maintenance Caroline Dinenage said: ‘We value the important role supported housing plays and that’s why we have worked closely with providers and listened to their feedback to come up with solutions that will safeguard its future and improve support for those that need a home that is safe and secure.

‘The new flexible funding model and reforms will give housing providers certainty over future funding and drive up quality and provide value for money. The supported housing sector support provides homes from older renters. It also provides a home for other vulnerable groups such as people with learning disabilities, mental ill health, homeless people and victims of domestic abuse.’

Chief executive of Associated Retirement Community Operators, Michael Voges, said: ‘This is an important step forward, and we are pleased to see that the government’s plans to localise rental revenue have been shelved. As a result, we should see new development of extra care pick up again but we will need to see what the fine print of the consultation has to offer.’

The move was also welcomed by Ashley House, which has seen its financial performance hindered by uncertainty about the cap. Antony Walters, chief executive said: ‘The threat of the LHA cap on supported housing has stifled development and investment in the sector and put many of our important pipeline schemes on hold.’

Walter said the business is now able to push forward on these schemes enabling hundreds of vulnerable people, particularly the elderly, to receive suitable housing with care provision.

THIS NEW FLEXIBLE FUNDING MODEL

AND REFORMS WILL GIVE HOUSING

PROVIDERS CERTAINTY OVER FUTURE FUNDING

CM


LA spending rises in real terms finds NHS Digital

Local authority spending on adult social care rose by 3.3% in 2016/17 - the first time expenditure has risen in real terms since 2009/10.

NHS Digital figures show, however, that the number of people receiving services fell slightly, indicating that the increased expenditure was due to rising costs.

This included increased costs arising from the National Living Wage and a rise in demand in support for complex needs councils reported.

An extra £556m was spent on services in the last financial year, with more than half this amount (£382m) being raised via the social care precept, according to the Adult Social Care Activity and Finance Report.

Total spending was £17.5bn. Demand for services rose by 0.2% on the previous year, with 1.8m requests for support from new clients being received by councils.

Overall, nine in 1,000 people aged 18 to 64, and 58 in 1,000 people aged 65 and over received long term support provided or arranged by their council in 2016/17.

The total number of service users receiving long term care over the year decreased by 4,000 to 868,000. The total number of short term care episodes to maximise independence was 242,000, down on 2.1% from 2015/16’s total of 247,000.

The average cost of residential care for a person

aged 65 and over was £565 a week in 2016/17, rising from £549 in 2015/16, while nursing care for the same age band increased to £606 a week from £563.

For working age adults, the costs for nursing care rose to £911 in 2016/17 from £871 the previous year, and residential care increased to £1,236 from £1,205 per week.

Not surprisingly, spending varied widely between councils. Ten councils reported cash terms increases of more than 10% and four over 20%. However, 42 out of 151 councils reported a decrease in expenditure compared with 2015/16.

Responding to the figures, Cllr Linda Thomas, vice chair of the Local Government Association’s Community Wellbeing Board, said: ‘These figures show that while councils are doing all they can to protect adult social care services, the increase in demand and cost for services is only adding to the huge pressure

they are already under to support older and disabled people, keeping them at home living independently in the community, and out of hospital.

‘Social care faces an annual funding gap of £2.3bn by 2020. It is vital that the government sets out in the Autumn Budget how it will address the social care crisis and deliver long-lasting reform that meets the needs of adults of all ages needing social care. ‘The social care council tax precept and the £2bn announced for social care in the Spring Budget were steps in the right direction but these one-off measures are by no means adequate in securing a long-term sustainable funding solution. ‘Councils also need to be given the freedom and flexibility to invest in social care where it is most needed if the money is to be effective to over 1.4m people in our communities.’

The Department of Health has launched a £15m fund to improve support services for those needing urgent and emergency mental healthcare.

This includes conditions such as psychosis, bipolar disorder, and personality disorders that could cause people to be a risk to themselves or others.

The Beyond Places of Safety scheme will focus on preventing people from reaching crisis point in the first place and helping to develop new approaches to support people who experience a mental health crisis.

MH funding

Linda Thomas, vice chair, LGA Community Wellbeing

News


More than half of directors of adult social services expect to overspend their adult social care budgets this year, according to an ADASS survey published last month. The average estimated overspend was £2m, with one council going over its budget by £20.8m.

Furthermore, ADASS members expect to have to potentially help pay £270m to fund six years of backpay for sleep-in shifts. After ring-fenced investment finance, the HMRC’s crackdown is the second biggest concern among directors, with an average cost per local authority area of £1.78m expected.

The precarious state of the public-facing market remains with almost half (48%) of councils reporting that homecare providers had handed back contracts between April and August and two-thirds of local author-ities reporting provider closures during the same period. Even more worringly, 94% of councils reported they had experience of quality challenges, up from 74% in the ADASS survey of the previous financial year.

ADASS president Margaret Willcox, said: ‘Our latest survey makes this clear and paints a bleak picture. More than half of councils are already forecasting an over-

spend in adult social care budgets for this financial year and their top two concerns are both funding-related.

Councils say the hardest care service to obtain a place in is a nursing home (52%), followed by homecare (46%) and a residential home (20%). In 2016/17 16 councils were fined for delayed transfers of care, with individual fines as high as £280,540. Only ten councils, however, paid the fine. In 2017/18, eight councils have been fined up to £99,970. Six councils have paid the fine.

In addition, only 18% of directors are confident (14%) or very confident (4%) that their Sustainability and Transforma-tion Plan (STP) will deliver its aims

Willcox added: ‘The extra £2bn in fund-ing, while welcome, is simply a short-term fix and cannot hide the fact that by the end of this financial year, £6bn has been cut from councils’ adult social care budgets since 2010 - with demand for our services growing all that time.

‘This is simply unacceptable and needs to be addressed, not only in the Autumn Budget, but also in the promised consul-tation on the future of adult social care, because we cannot continue without suffi-cient and sustainable resources.’

LA budget overspend warningChildren in careNinety children a day entered care last year with a record number of children now in the care system, according to theLocal Government Association. It siad official figures show the total number of looked after children reached a new high of 72,670 in 2016/17 - up from 70,440 the year before.

Budget plea Healthcare Management Solutions chief executive Tony Stein has written to the Chancellor of the Ex-chequer ahead of his Au-tumn Budget this month. In his letter, Stein high-lighted that extra funding from the Government’s Social Care Precept and the Better Care Fund were being used to plug exist-ing gaps in funding, rather than improving services or planning for the future, as the population ages.

Manager surveySkills for Care is con-ducting a national survey to find out more about registered managers and nominated individ-uals who offer strong leadership day in and day out. They want to discover common leader-ship themes across the sector, more about their day-to-day experiences and what they need to improve themselves and their services.

Dementia research Opioid use is not associat-ed with an increased risk of Alzheimer’s disease, shows a recent study from the University of Eastern Finland. Researchers did not find any risk neither for long-term use nor for higher cumulative doses.

Inbrief

Southend’s robotic recruit Southend-on-Sea Borough Council has become the first local authority to buy social robot Pepper under an academic licence.

Pepper, who made an appearance at LaingBuisson’s South West Long Term Care Conference earlier this month (see page 14), is a small humanoid robot which has the ability to communicate as well as perceive emotions, adapt its behaviour and make independent decisions. Pepper can also play videos, music and sensory games that will be used to help people with dementia

and children with complex disabilities.

Cllr Lesley Salter, executive councillor for Health and Adult Social Care, said: ‘Robots may seem like something from the distant future, but the technology is here and we strongly believe that Pepper can have a positive impact on social care as we continue to transform our services and make sure they are fit for the future.

‘Pepper has a number of features that we believe will be of real benefit to local people that we care for, and we think he could

run a reminiscence group for those with dementia for example, freeing up time for social workers and carers to carry out one to one activity. Academics at universities are also exploring how robotics can help stroke survivors to do physio exercises, for example.

‘We are absolutely clear that Pepper is not here to replace any of our people, but to complement and help the existing staff we have to deliver a better service by freeing up time for them to deal directly with people, for example.’

The government has launched a new compliance scheme for care providers to tackle the thorny issue of sleep-in shifts. Supported by HMRC, which has been cracking down on providers who have historically paid workers below the minimum wage for these shifts, the voluntary Social Care Compliance Scheme would give providers up to a year to identify what they owe to workers. Those who are found to be in arrears will have three months to pay workers.

The Department of Health said HMRC will write to social care employers who currently have a complaint against them for allegedly underpaying minimum wage rates for sleep-in shifts to encourage them to sign up to the scheme. Those who do not choose to join the scheme will be subject to HMRC’s normal enforcement approach.

Furthermore, in order to minimise any impact on the sector, the government has opened discussions with the European Commission to determine whether any support, if deemed nec-essary, would be subject to EU state aid rules.

The government has already waived further penalties for underpaying sleep-in shifts worked before 26 July 2017 and enforcement action for sleep-in shifts in the social care sector was temporarily suspended between 26 July and 1 November 2017. This was to alleviate the impact of financial penalties and arrears on the long-term viability of social care providers.

The new compliance system plan, however, was not warmly received by the sector.

Chairman of the Royal Mencap Society, which has been hit hard by the crackdown, Derek Lewis said the announcement failed to give any reassurance to people with a learning disability that their homes and care are secure and to carers that their jobs are not under threat.

Lewis said: ‘The government has put in place a new ‘volun-tary’ compliance regime to help HMRC assess the back-pay liability of individual providers, which will crystalize the debt. They will then have three months to pay. Details of the scheme have not yet been made available. Many providers, particularly smaller ones, may be reluctant to take part in the absence of any funding assurance, concerned that they will be writing their own suicide note.

‘Meanwhile, although government has belatedly issued guidance to local authority care commissioners that they should in future be funding the increased cost of sleep-ins, over half of local authorities are still refusing to do so. It is quite wrong that providers should be expected to subsidize the increased cost of on-going sleep-in care.’

Emma Burrows, partner at Trowers & Hamlins, which is lead-ing a judicial review on the matter, said that the value of back pay for sleep-ins for social care had been assessed as being £400m, and the government has not indicated that any help for this liability will be forthcoming. Burrows said: ‘It is likely that this liability will lead to social care providers considering giving some services back to commissioners; possibly facing insol-

vency issues and certainly being more risk averse in strategic decisions about the care they provide in future.’

Cllr Izzi Seccombe, chairman of the Local Government Associ-ation’s Community Wellbeing Board, added: ‘It was misleading government guidance in the past which caused the confusion over whether National Minimum/Living Wage should apply for sleep-in shifts. Now the Government has clarified the position, it needs to provide genuinely new funding to deal with back-pay-ment.

‘The focus of this announcement is very much on historic liabilities. The government cannot ignore the additional costs of sleep-ins in the here and now, and into the future. It is wrong to assume the Spring Budget £2bn for social care can cover this additional burden. The forthcoming Budget needs to inject new money into social care to meet this pressure.’

Sleep-in compliance plan gets cool reception

Emma Burrows, partner, Trowers & Hamlin

Emma Burrows, partner, Trowers & Hamlin


10 | OCTOBER 2017 | CM - LaingBuisson

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Face to face, over the phone or in writing we can help you

Get in touch today0300 222 11 22 [email protected]

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We’re here foreveryone

affected by dementia


News

Profit margins decline across care home sector

Colliers International reports drop in first half of 2017

Profit margins have declined in residential care, nursing and spe-cialist care homes, according to Colliers International Healthcare

Market Review. The most noticeable drop was in

residential care which saw profit levels remain static in the six-month period to H2 2016 but then showed a marked fall of 1.5% in H1 2017 to 30.8%.

Colliers found that EBITDAR levels in this sector fell below the ten year average in the first half of 2017 and are towards the lowest level seen in the past 10 years of 30.1%, recorded in 2011.

This was a result of only a small increase in average occupancy levels (0.1% since H1 2016 to 91.8%) and a drop in fees of over 3% in real terms over the year. While non-payroll costs remained static, Colliers identified a marked increase in payroll costs over the last half year.

While it’s too early to predict if this swing will become a longer term trend, this will be a KPI to monitor, the report said.

Nursing care, boosted by FNC contributions, fared better with profitability falling by 0.2% in over the year to H1 2017 to an average of 28% However, this follows a fall of 0.7% noted last year. Over the last ten years, EBITDAR levels have ranged from 27.4% to 32.9% and as with the care sector, the current level noted is towards the lower end of this range.

Occupancy levels fell below 90.5% in H1 2017 (down 0.7% since H1 2016) but fees rose by 5.2% in nominal terms and 1.9% in real terms in 2017, continuing the strong growth seen last year. There were only small variations in payroll and non-payroll costs.

However, Colliers forecast that, given the broadly static level of FNC contributions in 2017, profit levels may

see more pressure in the nursing sector in future.

Following a period of recovery in 2016, profit margins fell by 0.5% over the year to 29.1% in specialist care homes. The analysis found that profitability levels have remained sub 30% for the last five years, largely as a result of rising wage costs, showing the continued challenges faced by the sector. More positively, occupancy levels remained stable at 91.2% and fees showed steady growth.

Head of healthcare Adam Lenton said: ‘Demand for quality care provision in care homes, through primary care and the NHS, continues to intensify. This is offset against limited progress with improved facilities, planning regulations, staff recruitment and retention and private investment – and that’s before we make

a dent in the Brexit negotiations and the ensuing ramifications of our departure from the EU.

‘The results over time can be extremely rewarding and deliver strong occupancy and profitability but it’s a difficult balance to get right. The healthcare sector needs more investment, development, proactive government support and strategic thinking, integration and public/private sector collaboration. With the demographic challenges we face, the issues will continue in the coming years and the sector will adjust and rise to challenges, as it has done over the past 25 years.’

22

H203

H104

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H105

H205

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H107

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H108

H208

H109

H209

H110

H210

H111

H211

H112

H212

H113

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H114

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H115

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H116

H216

H117

24

26

28

30

32

34

36

% PC PC 10 year average

NH NH 10 year average

PROFIT MARGINS IN RESIDENTIAL AND NURSING CARE FOR OLDER PEOPLE (65+) ENGLAND (PC: RESIDENTIAL CARE / NH: NURSING HOME)

SOURCE COLLIERS INTERNATIONAL HEALTHCARE MARKET REVIEW


Indetail

Readers of LaingBuisson’s latest White Paper on long term care funding might be forgiven for saying ‘Please, not another idea, why not just get on with implementing Dilnot’, or, if they want to be more generous with taxpayers money, ‘let’s go back to Gordon Brown’s national care service model where everyone is entitled to non-means test-ed care they need’.

But the fact is that we are in new political territory.

The Conservative government, weakened as it is since the June 2017 election, is incapable of bringing forward any new policies or passing them into legislation.

New thinkingSo now is exactly the time for exploring

new ideas. Not that the Personal Asset Protection Guarantee (PAPG) concept in the LaingBuisson White Paper is an entirely new idea.

It builds on and simplifies Dilnot, based on the same fundamental ideas – a) that some sort of cost sharing between the state and the privileged property owning population of older people is fair, and b) that the state should take action to resolve a glaring example of market failure, where older people with property and other assets are faced with possibly catastrophic costs which no insurer is willing to insure (except right at the end with immediate care plans).

A solution of unintended consequences

Dilnot devised an elegant solution to the catastrophic costs issue which effectively meant that the state would take on the catastrophic cost risk, but not the risk of low to moderate costs, which would remain with property owners. So what’s wrong with that? ‘The law of unintended consequences’ is the White Paper’s answer.

To explain, back in the summer of 2015, just before the government announced its postponement of Dilnot, the County Councils Network published research carried out on their behalf by LaingBuisson, which showed that Dilnot implementation would bring with it a high risk of destabilising the care home sector in those less affluent areas of the country where the economics of the care sector are at their most fragile.

LaingBuisson found that, on average, private payers pay over 40% more than councils for the same care home accommodation and in all probability the same level of care. This in turn means that the ‘payor’ shift envisaged by Dilnot (where residents who were previously private payers would be eligible for council support, and come within the ambit of council fee setting) would lead to a reduced average fee rate and a cut in care home margins. Spread across the country as a whole, the care sector might have adjusted, but the inescapable problem of the £118,000 threshold that was going

to be implemented in April 2016 (which would be the same for the £100,000 threshold mooted in the Conservative election manifesto) is that the ‘payor shift’ is focused on less affluent regions such as the North East and the North West, where a substantial proportion of owner-occupied property values are close to the threshold or within spending down distance of it. In some areas more than 50% of private payers would be caught by ‘payor shift’ and the consequences for many care home operators would have been catastrophic.

Of course, local authorities could have resolved the issue by raising their fees closer to a viable economic rate, but this was not a realistic possibility then and nor is it now. So, how else could the problem be resolved? One answer is the PAPG concept, which would dilute the ‘payor shift’ problem by spreading it throughout the country, though it could not make it go away.

The other unintended consequence of the extended threshold ( a mirror image, in fact, of the ‘payor shift’ consequence) is that the benefits would be grossly unequally spread, with the main beneficiaries being property owners in less affluent regions, while property owners in the leafy South East would get virtually nothing (the cap compensates them to a degree, since that would be distributed unequally in the opposite direction, benefiting people in affluent regions more, but that’s another story).

So where did the Personal Asset Protection Guarantee (PAPG) idea come from and how does it help to resolve the unintended consequences of Dilnot? During the course of work commissioned by the Alzheimer’s Society on the impact of Conservative party proposals for long term care funding put forward in the 2017 general election, and overlapping work for the County Councils Network, it became apparent that the policy objectives of both the threshold and the cap could be achieved in what is arguably a simpler and more equitable way, by defining individuals’ eligibility for council support for residential care in terms of the percentage of each individual’s assets (including owner-occupied property) which has been spent down since being assessed as needing care.

Older care an affordable vision?

William Laing explains the thinking behind his recent White Paper designed to pitch a new vision of affordable long term care

PROJECTED PAYOR SHIFT FROM PRIVATE PAY TO COUNCIL SUPPORT AFTER CAPITAL THRESHOLD UPLIFT TO £100,000 ENGLAND RESIDENTIAL AND NURSING CARE FOR OLDER PEOPLE (65+)

SOURCE PERSONAL ASSET PROTECTION GUARANTEE, WILLIAM LAING LAINGBUISSON 2017

53%

50%

43%

49%

46%

41%

57%

37%

40%

45%

20%

18%

22%

16%

16%

6%

1%

4%

7%

12%

17%

23%

27%

28%

29%

46%

31%

50%

45%

35%

9%

9%

8%

8%

9%

7%

11%

9%

9%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

North East

North West

Yorkshire & Humber

East Midlands

West Midlands

East of England

London (1)

South East

South West

ENGLAND

Council Supported (now) % Shift from private pay to council pay %

Remaining private pay (at steady state) % NHS Continuing Healthcare (now) %


In the White Paper the concept is outlined as follows:

• The baseline for the value of each individual’s assets is crystallised at the time when that individual seeks an assessment from his/her local council and is found to need care, followed by an assessment of means (no difference in principle from the current regime)

• The individual is guaranteed that once X% of his or her baseline assets have been spent down (other than through inappropriate divestment, which is already defined in CRAG rules) he/she will be eligible for financial support from the council in the usual way, subject to income related user charges

• The individual may seek a further assessment at any time (as now). If care is still needed and assets have been depleted by X% or more, the individual will be eligible for council support (note that the council will have a record of the prior value of any property at the time of the initial assessment, which will make any re-valuation easier)

• The PAPG can be viewed, if you wish, a sort of variable cap. Its attractiveness as a complete and self-contained alternative to combinations of fixed threshold and cap, will of course depend on the value of ‘X’. Using the spreadsheet model developed by LaingBuisson on behalf of the Alzheimer’s Society and the County Councils Network, ‘X’ was calculated at 27%, to deliver similar policy objectives, more equitably, at the same public expenditure cost of a single threshold of £100,000 and a care cost cap of £72,000. Another way of expressing this is that individuals would be guaranteed to keep 73% of the value of their assets.

The principal effect of a PAPG arrangement is to give some financial benefit (or peace of mind) to the full range of property owners rather than concentrating the benefits on property owners of modest means (around £100,000 in assets) or a small minority of the care home population which

survives for several years and qualifies for the cap. At the same time, it dilutes the adverse impact of ‘payor shift’ on care home operators by spreading it more thinly across England.

Does it have political appeal?

The answer to that would come in focus groups, which political parties now use to test out voters’ views. And it’s pretty obvious that something which gives greater peace of mind to everyone would win out over a policy whose concrete benefits are concentrated on a smallish minority. Consider the position of an 85 year old lady in Surrey with a house worth £500,000. She wants to leave some money to each of her three grandchildren, but is worried that if she lived long enough in a care home she would have to spend down to about £100,000 (if the threshold were extended to any feasible level), which in her eyes is not much different to £23,250 now. The PAPG, in contrast, would give her peace of mind that once the value of her assets was down to £365,000 she would be eligible for council support and only pay what she could afford out of income. Against that case has to be balanced a similar 85 year old lady in Gateshead. She would lose out with the PAPG compared with a £100,000 threshold because she would have to spend down £30,000 to qualify for council support, rather than qualifying for it straight away. The critical thing, in electoral terns, is that with an average property value of £230,000 across England there are more older property owners who would identify with the position of the lady from Surrey than the lady from Gateshead. True, Gateshead loses the certainty of immediate council support, while Surrey will get only peace of mind in most cases, and will never actually qualify for council support. But if tested with voters it seems highly likely that the majority would favour PAPG. There is also a strong philosophical argument in favour from the utilitarian standpoint (the greatest good of the greatest number).

In summary, the advantages of PAPGs, as a complete alternative to any combination of threshold or cap, are:

• The concept is simple to understand

• It delivers benefits (in terms of

peace of mind) to the full range of property owners, not just those in ‘spending down’ sight of any feasible threshold

• Minimal change to the current means testing regime and no need to track actual spending on care services

• The geographical distribution of benefits from PAPGs would be more equitable than under a threshold extension (see Figure 1) and a care cost cap

• The propensity of individuals and their financial advisors to ‘game’ PAPGs by divesting property assets would be no greater than the current incentive to divest property assets to circumvent the £23,250 upper threshold

• The opportunities for developing new long term care insurance products around PAPG entitlements are at least as great as building them around combinations of threshold and cap, and probably greater

• The ‘payor shift’ threat to the stability of the commercial care home sector in less affluent areas of the country would be diluted (though it would not disappear)

Without any need to monitor

individuals’ care costs, the assessment, care management and administrative costs of PAPGs would be lower than for any combination of cap and threshold.

To read the full LaingBuisson White Paper, Personal Asset Protection Guarantee: a mechanism for sharing the costs of long term care between older property owners and the state, visit www.laingbuisson.com

William Laing, founder, LaingBuisson

Inconference

Delivering the keynote speech at the South West Long-term Care Conference in Bristol last month, Somerset Care chief executive Jane Townson said it was withdrawing from providing local authority-commissioned homecare services.

She said: ‘For local authorities the demand is massive but the model is unviable. We have been trying to develop our own model with smaller teams.’ She said operating in the South West did present some unique challenges as many people lived in small towns or villages. ‘It is not uncommon for our carers to drive 100 miles or more in a day.

Talking about Somerset Care’s homes, she said: ‘We do not want to be a five-star hotel. We want it to be like home.’

Around 60% of its residents are self-payers. She said: ‘Our studies show that in terms of new care homes, it needs to be 70% self-pay to be viable.

LaingBuisson founder William Laing said: ‘If you are looking five years ahead in terms of local authority funding I think a solution will have been found as it is not sustainable the way it is.’ Looking at house prices, he expected demand from self-payers to increase. ‘This is going to last for a good 20 years or more, he said.’

As a result, he predicted a continued shift towards self-pay. ‘It is there where demand is growing and an unwillingness to realise it in the public sector’, he said.

Townson added that, despite Somerset Care’s joint venture with McCarthy & Stone - operating under the brand YourLife - prevalence of housing with care in the south west was still small.

She said: ‘If you can get a partnership like we have with McCarthy & Stone, you could get some really interesting developments.’

Safe by South West

Eleanore Robinson reports from LaingBuisson’s successful regional care conference where Pepper, the AI future of social care, proved a big hit



Homecare outcomesSpeaking about its partnership with

Wiltshire Council Help to Live at Home, Sian Davenport, regional director at Mears Group, said that its involvement in this outcomes-based services had led to opportunities within reablement and rehabilitative services which more commonly used this system.

‘Traditional payment mechanisms do not relate to the quality of care. There is a payment by results service. However, defining what is meant by outcomes is critical to the success.

‘It requires a change in mentality at all levels. It is about managing expectations as customers have been focused around time and task.’

She said the best approach was to look and the needs of the customer rather than looking at the service and how the customer fits in with that. The result has been a reduction in the amount of homecare required by Mears’ clients from an average of ten to nine hours per week. Furthermore, its staff turnover rate is 20% lower than the national average.

Getting IT into the homeTalking about how technology can be

used in care, Jane Townson, said it can

help in terms of support. Vida founder Devika Wood, whose

platforms allow private payers and local authorities to commission homecare services, announced plans to license out the technology to other providers.

She said homecare providers often cannot access patients’ records until they enter the service user’s home. ‘We want to go into records where it is all digitalised.’

Currently 80% of Vida’s business is from private providers with the remainder from local authorities on spot contracts.

Wood said: ‘A lot of clients says they have direct payments but councils do not allow them to use us as we are not on the preferred provider list. We are trying to take a longer-term view and battle with local authorities.

‘We want to show we can be profitable as a care provider. We are going to license this out.’

RoboCareTaking a step further into the

future, delegates were treated to a demonstration of ‘Pepper’ the robot, developed at Bristol Robotics Laboratory. The social robot is being developed to help people in their homes, particular people with a dementia diagnosis.

Last month, Southend Council announced that it had commissioned Pepper to transform the way it delivers care in its local community.

Pepper can be used to remind people to take medication and ensure they eat, with a demonstration of its assistance when cooking a microwave meal.

HWC about to boom? Chief executive of St Monica Trust

David Williams said housing with care was about to take off in the region with around 1,471 units being built.

‘The amount of interest is huge’, he said. ‘We have been building anything and people will come but I think there are some warnings about this thinking. At some of our sites, there was a drop in interest. There were increasing complaints about the estate.

‘Housing with care is an emerging market and it is very immature. However, there are significant problems with this product.’

Research conducted by the not-for-profit provider found there was a significant generational gap between residents born in the 1950s and 1960s. Those born in the 1950s did not really complain about anything and were a pretty homogenous group.

SOURCE LAINGBUISSON

-£150 -£50 £50 £150 £250 £350 £450 £550 £650 £750

Bath & North East Somerset Council

Wiltshire Council

Swindon Borough Council

Devon County Council

Dorset County Council

Gloucestershire County Council

Bristol City Council

Poole Borough Council

Bournemouth Borough Council

Cornwall Council

South Gloucestershire Council

Torbay Council

Plymouth City Council

North Somerset Council

Somerset County Council

£ per week Councils' unit costs 2015/16 Care home fee gap

Care home fee gap in the South West CARE HOME FEE GAP IN THE SOUTH WEST


Inconference

Residents born in the following decade had their own culture and were not afraid to challenge the establishment, Williams said: ‘They are all different. They are not a homogenous group. But they are the generation who benefited from the increase in property values.

‘They do not want the same facility that works in other parts of the country. They want schemes to reflect their differences.’

‘They are talking about Wi-Fi and smart TVs. They wanted it future-proofed to take into account of robotics.’

Williams said another aspect was that their families mattered and they wanted to live in a place where their grandchildren would visit.

The Trust incorporated this research into its £60m Chocolate Quarter development in Keynsham, where 70% of apartments have been sold off-plan.

Speaking about the quality of residential care property, Matthew Drysdale, principle surveyor at Carterwood there was opportunities to create self-pay homes near big conurbations in the south west such as Bristol, Plymouth and Bournemouth.

On average, 20% of facilities

had wetrooms. ‘It is fair to say that future-proofed estates are not found all over’, he said. He added that the region had the lowest number of dementia beds in England. ‘If you are thinking about focusing your services in the south west, dementia care is an easy win’, Drysdale added.

Community homes for local people

Owner of Outstanding rated Nazareth Lodge in Dorset, Camilla Trimble said the secret to its success was being ‘firmly bedded into the community’. ‘The local community know us. We have community volunteers. A lot of residents haven’t got family around them so it is important.’ She added that they never employed agency staff and she had employees who had been at the care home for 15 years.

With one of the highest staff turnover rates in the country, workforce was another key issue discussed at the event in Bristol.

Sarah-Jane Dale from Skills for Care said that 60,000 new care workers would be needed by 2030 but turnover of staff was more than 30%, much higher than the national average. However, one fifth of providers in the region had retention rates of less than 10%.

In the south west, two thirds of staff recruited were already working in social care. The Proud to Care initiative, which includes a pledge from providers not to chase after the same workers, was taking off in the south west.

Maggie Hennessey from recruitment consultants Penna said the use of social media would be one way of attracting younger people into the sector, with use growing by 54% in the past five years. She said: ‘Younger people want to feel they are in an environment they can understand and feel comfortable in. It is something we are not doing well.’ Sites such as Facebook and Instagram can be used to get the right candidates and promote care providers as an operator of choice, she said. ‘You have to be able to sell your story or your brand. It is not just employment for them.

‘I think we are not taking advantage enough of virtual reality and artificial intelligence. We are not making enough of technology.’

Jane Townson said 20% of the population of the south west is retired so finding workers was difficult and the region had the lowest retention rate in the country.

Presenting some possible solutions to the growing workforce shortage, Neil Eastwood, founder of Sticky People, said: ‘We need to be first to respond. Thanks to DBS checks, we know a lot about them but we do not give them much.

‘We need to rethink our expectations and understand it’s now our candidates who are in charge.’ Townson added she had found Facebook as a very cheap way of advertising for staff. However, Neil Eastwood warned that for

some providers, if it did not work for them, they would write it off. David Williams said St Monica had spent a lot of time trying to improve its retention rates, which were between 15 and 16%

in its housing with care developments and 20% in its homecare business. The business, however, did not take on large local authority contracts.

He said: ‘There is a lot of targeting going on. Some of the offers are well above what the market supports.’

Workforce

David Williams, chief executive, St Monica Trust

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the biggest complaints from citizens is that information is never transferred effectively across health, social care, housing or any of the other organisations they deal with.

We need to understand that true well-being comes when people are connected to their communities and have support and contact with other human beings and the services use information and data to deliver high quality support and prevent people from falling into dependency.

The coming years are going to be difficult for everyone.

There will be the uncertainties around Brexit, the difficult challenges of an economy that will be in a period of change and reconfiguration and we will also see yet another attempt to craft the solution for the future funding of social care.

I am of the view that we should not look to the government for a solution because the evidence from the last 20 years, is that they will never deliver anything long-term.

If this is our reality as the sector, we will have to craft solutions for ourselves and I hope that we will be bold in our vision and creative and innovative in how we deliver it. Times of uncertainty are always difficult, but they are also times of opportunity.

Change is inevitable and it is how we respond to it that will define whether or not we are successful and deliver long-term solutions.

organisations are not the ones that cling on to doing everything in the way that it has always been done, rather, what defines success, is the ability to hold fast to their core values while at the same time modernising and developing their services to meet the challenges of a new world.

The citizens of the 21st-century want services that are preventative and maintain their well-being and this is a departure from the current model of services where people only tend to get support when they are in a crisis.

There is also another pressing need and that is that people need to be connected to their communities. It is ironic that we live in

a world where communication technology has never been better, but at the same time, many people are more isolated than they have ever been.

We also live in a world where, despite amazing channels of communication, one of

It is true to say that we live in very uncertain times with Brexit, the falling pound and the inability of the government to put forward a long-term

strategy for social care are all having an enormous impact on our sector.

The State of Social Care Report, published by the Care Quality Commission gave politicians yet another clear warning that the crisis in social care is happening now and the demographic change that we have talked about for the last 20 years is here.

As ever in these situations, when the governments fail us, it is the citizens who have to bail out the system and the austerity and difficult times that are affecting us all are compounded by a lack of vision and a lack of clarity about what citizens can expect from the system and what they should provide for themselves.

We are certainly living in a different economic world, but I would also argue that we are living in a very changing world in terms of the needs and aspirations of citizens.

People have needs and aspirations and they want their housing and care services to respond to them as people rather than just offering them a service.

Faced with uncertainty and a lack of long-term policy, citizens and organisations will have to start finding solutions for themselves and they will have to navigate the choppy waters of change and plan for their futures without very much in the way of clear national policy.

When the world changes, successful

An uncertain future: needs a bold response

Care England head Professor Martin Green on uncertainty and the care crisis that is

happening now

Professor Martin Green, chief executive, Care England

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room, the remainder covering the costs of any other services needed. The costs of delivering care are considerable, when considering National Minimum Wage, registration, pre-employment checks and quality assurance, and one wonders whether this has been under-estimated in claims that such a service could be offered at around £100 per night, if it in-cludes both accommodation and support.

Safety The safety of people using a Care-

BnB-style service features high in the priorities of those who have urged caution over this sort of model. Innovators should approach the care regulator (in England it would be CQC) to establish how the model fits regulatory requirements.

If such services fall outside statutory regulation (for example, because they do not provide personal care) it is vital that people using them receive sufficient information to make an informed decision about the potential benefits and risks involved, including the extent to which background checks have been undertak-en on householders with whom they will come into contact.

However, the attraction of innovative models of care is that they appear to offer cost-efficient services, but often do so by exploiting apparent gaps in regulation, or by not being clear on the costs for individ-uals offering the service. That is why a proportionate system of care regulation is there - to ensure that people can access services which are assessed consistently by an independent body empowered to take action if standards are not met.

existing home isn’t suitable for them on discharge, then some time spent in an environment which is properly equipped could be a good idea, particularly if major adaptations to their own home would be needed for the short-term, or more minor adaptations could take too long to get fitted. In this case, there is a question about whether local arrangements for home adaptations need to be improved.

The CareRooms website refers to the availability of ‘patient safety monitoring’ and an ‘in room GP via video link’. Better use of developing technology is certainly something which the social care sector needs to embrace, particularly where it has the potential to improve productivity. WiFi and cellular connections are at a stage where equipment should be rela-tively portable, and technology nowadays rarely needs to be hard-wired permanent-ly into people’s homes.

Personal careThen there is personal care and sup-

port. If people are medically fit to leave hospital, but not ready to return to their own home without some degree of sup-port, then home-based care can already be commissioned from a market which is able to deliver just the right amount of care for people’s individual needs, up to and including, 24-hour live-in support.

The CareRooms website refers to ‘CQC certified care’. It is unclear what this imprecise expression means, but any nec-essary support could be either bought-in from a local provider registered with CQC, or the homeowners themselves might be subject to registration, a point which does not yet appear to be confirmed.

The Southend pilot seems to be mar-keted with a strong emphasis on its low cost; a £100-a-day fee to a commissioner or private person appears to offer a £50 incentive for a homeowner to rent-out a

At the end of October, a pilot pro-ject in Southend-on-Sea hit news headlines, having been quickly dubbed ‘CareBnB’ for providing

an on-line platform designed to recruit householders willing to provide a spare room to help people leave hospital when medically fit for discharge.

The start-up company, Care Rooms, at-tracted a lot of comment, some of which was probably unwelcome.

Southend Council appeared to distance itself from the pilot, at least in the short term. The Care Quality Commission (CQC) was reported as planning to make contact with the organisers to assess whether they were undertaking a regu-lated activity, while shadow social care minister, Barbara Keeley MP, tweeted that ‘care services cannot be provided on such a casual basis’, and that there were ‘clear safety risks to the people who accept such cut-price care’.

Even so, by that Sunday, Health Minister, Philip Dunne MP, said that he wouldn’t immediately reject the idea of trialling such a concept. Why not? A ‘CareBnB’ model is clearly trying to find a way to reduce the number of people affected by delayed transfers of care, and nobody would argue that’s a bad idea - at face value, at least.

DisruptorsNew models of care, particularly where

they have potential to disrupt existing markets, raise questions which can be useful to help develop services that really do meet people’s needs, in what may be a more cost-effective way than currently available.

Generally, people prefer to return to their familiar environment on discharge, rather than to a stranger’s home. However, there is certainly an argu-ment to be made that where a patient’s

CareBnBColin Angel of UKHCA examines whether this model could work

Colin Angel,policy director, UKHCA

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Inconference

The push to find a cure for dementia has died away, according to Bupa’s global director of dementia care

Professor Graham Stokes. He told delegates at the Care Show

in Birmingham last month that in 2015 850,000 people had a dementia diagnosis. By 2050 it will be 2 million.

He said, while there was a big push to find a pharmacological solution in 2014, that has died away.

He said: ‘The drug companies have no passion or commitment to dementia. Does that matter? The incidence of diagnoses is declining due to more awareness about the risk factors.

‘For me dementia is a middle-age

phenomenon as the risks are present in middle age. The greatest protection is the longer you stay in school or college.’

However, he said people are living longer, due to better care, which offset the lower incidence rates. ‘And if you are going to live longer you are going to be totally dependent’, he said.

‘More people are living with a moderate of severe diagnosis of dementia. We will see a greater need for care homes.’

He said 80% of people currently in care homes had a dementia diagnosis or some form of memory impairment. ‘In future, they will have advanced needs. We need to start addressing how we can go and deliver quality of life.

‘If anyone is convinced they can live in their own homes with their family’s support and with domiciliary care, they need to have a good conversation with me.’

Delays, delay, delaysSpeakers at the Care Show reacted

with dismay as the news broke that the social care green paper would once again be delayed.

Anchor chief executive Jane Ashcroft compared the news that the paper would not be out until the summer to the extensive delay to introducing the care cap, which has remained in the ‘long grass’ for years now.

Care Show where are the solutions?

Eleanore Robinson attended Birmingham’s Care Show last month and found an air of apathy regarding the prospects of a cure for dementia, and a Green Paper on social care that has gone beyond the long grass and may need digging out of a governmental never-never land

Graham Stokes, global director of dementia, Bupa


Jane Ashcroft, chief executive, Anchor

She told delegates: ‘What it is, is worse than the long grass. It seems to have been kicked away again.’

‘How can you plan for the future? How we think about care or support needs a degree of certainty which is very hard to find at the moment.’

Ashcroft added that the sector needed to make sure the services it is building are fit for the future and that they are places that people want to live.

‘If we had a rich diversity of housing, we would have less reliance on care homes.’

Dashed hopesHead of healthcare at Barclays, Paul

Birley, agreed saying: ‘There was hope that social care was moving up the political agenda. That hope has now been dashed.’

Birley said the funding shortage had now got to the point that some operators are now refusing to take local authority residents. ‘Those only taking private pay say why should we cross-subsidise beds when we can charge a lower fee. This is something we are starting to see.’

Talking about the workforce, he said that most employees did not work in the sector for the money. ‘I think we need to get people to understand why they do what they do’, he told delegates at the NEC.

Kieran Cole, partner at Knight Frank, added: ‘There has been a lot of talk about the ageing population. We

estimate we will need an extra 50,000 beds by 2020.’

He said Knight Frank research had shown that care home profits were down but nursing homes were up largely due to the FNC.

Knowledge breeds powerChairman of LaingBuissson and the

NHS Confederation, Stephen Dorrell said getting the quality of care provided to an acceptable standard was key. ‘Unless we are prepared to collect and believe evidence, we cannot be serious about quality.

He said STPs did not just relate to health and social care but affected all parts of local government. ‘If the resources are not available we can only conclude that the rhetoric about quality does not reflect the deeds’, he said.

‘We need to make the case for the private sector in integrated health and social care.’

To find out more about the 2018 Care Show - Building a Better Future for Care, 17-18 October, visit: www.careshow.co.uk

Stephen Dorrell, chairman, NHS Confederation and LaingBuisson

THERE WAS HOPE THAT SOCIAL CARE WAS MOVING UP THE POLITICAL AGENDA. THAT

HOPE HAS NOW BEEN DASHED

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� Nursing and Residential Care Homes

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� Development Land

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LNT Care Developments is due to complete work on a 66-bed care home on the site of the British Timken factory in Duston, Northamp-tonshire. It will be the second home operated by Oakdale Care Group when it opens in January.

Co-Founder of Oakdale Care Group, Chris Babington, said, ‘We are really keen to promote care as a positive career choice and hope to see the people who come to work at Timken Grange progress within their careers by providing exceptional care to the people who will live with us.’

Karbon Homes has opened a £7m extra care development in Alnwick, Northumberland.

Weavers Court is a three-storey build-ing containing 58 one- and two-bed-room apartments available for rent and shared ownership. The main contractor was Galliford Try Partnerships North and the scheme received more than £1.9m from the Department of Health’s Extra Care Housing fund, managed and de-livered by the Homes and Communities Agency (HCA).

Paul Fiddaman, chief executive of Karbon Homes, said: ‘We are so proud of this building, and of the communi-ty which has developed here. It was designed with the ‘HAPPI’ (Housing our

Ageing Population Panel for Innovation) principles at its core, and it’s very much a place that makes people happy.

‘We want to thank all our partners

who helped us deliver this project, and we look forward to the opportunity for Karbon Homes to build many more such developments in the future.’

Karbon Homes’ £7m site

AudleyApache Capital Partners has formed a joint venture with Audley Group to deliver a 13,750 sqm luxury retire-ment village on Nightingale Lane, overlooking Clapham Common, London, with a gross development value of £125m.

Situated on the site of a former police station and already with the benefit of a planning permission

Inprogress

LNT’s Oakdale

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� Nursing and Residential Care Homes

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secured by Apache Capital, construction is anticipated to commence by mid-2018 with completion expected in 2020.

SignatureSignature Senior Lifestyle has marked the progress of its latest £19.2m care home development with a topping out ceremony.

Once opened next summer, the Elton House in Bushey, Hertfordshire will be made up of 95 apartments across four storeys, comprising 71 studios and one-bedroom private apartments, as well as 24 studios in a specialist dementia suite.

Care UKCare UK has been topping out its £6.7m care home

in Bromsgrove, Worcester-shire, which is due to open early next year.

The four-storey care home will offer 81 ensuite bed-room and has been designed to enable its residents to live active and fulfilled lives, while also promoting inde-pendence by incorporating a space for hobby and leisure activities, including its own cinema, hairdressing salon and café.

Oakdale Care Group’s Timken Grange

Weavers Court,Alnwick


Intelligence tables

Adult specialist care home providers (by beds)1

Rank Provider # homes # beds Av. beds/home

1 Priory Adult Care (fka Craegmoor) 225 2,296 10

2 Voyage Care 266 2,115 8

3 Leonard Cheshire Disability 100 1,917 19

4 CareTech Community Services 140 1,168 8

5 Four Seasons Health Care 31 1,084 35

6 Lifeways 80 837 10

7 Regard 72 686 10

8 Prime Life 29 660 23

9 Mencap 81 634 8

10 Exemplar Health Care 24 619 26

Learning disability care home providers (by beds)


1 Voyage Care 245 1,867 8

2 Priory Adult Care (fka Craegmoor) 175 1,640 9

3 CareTech Community Services 124 948 8

4 Lifeways 72 651 9

5 Mencap 81 634 8

6 Regard 68 609 9

7 Caring Homes 61 550 9

8 Care Management Group 66 458 7

9 Hft 40 414 10

10 Cygnet Health Care 34 404 12

Mental health care home providers (by beds)


1 Prime Life 17 450 26

2 Priory Adult Care (fka Craegmoor) 31 394 13

3 Exemplar Health Care 11 277 25

4 Four Seasons Health Care 6 202 34

5 Tracscare 34 201 6

6 Rethink 21 190 9

7 Richmond Fellowship 12 175 15

8 Together 15 175 12

9 Mariposa Care 5 166 33

10 Deepdene Care 5 136 27

NOTES 1. ADULTS UNDER 65 WITH BRAIN INJURY REHABILITIATION, EATING DISORDERS, LEARNING DISABILITIES, MENTAL HEALTH, PHYSICAL DISABILITIES, SENSORY IMPAIRMENT AND SUBSTANCE MISUSE.SOURCE LAINGBUISSON DATABASE. NUMBERS CORRECT AS OF 27 SEPTEMBER 2017.

Major UK providers of adult specialist care sponsored by

INFOCUS

Following the publication of the Care Quality Commission’s annual State of Care report last month, CM chats to Somerset Care chief executive Jane Townson about its decision to withdraw from local authority contracts. CM also looks at whether there is a link between larger care groups and lower quality ratings and how providers can and have improved their CQC score.

QUALITY

NOVEMBER 2017


Inconversation


The chief executive of Somerset Care talks to Eleanore Robinson about ditching

council contracts and setting up joint ventures

CM meets...Jane Townson

WE CANNOT SUSTAIN THE LARGE

LOSSES ARISING FROM INADEQUATE FEE RATES AND WE ARE UNWILLING TO COMPROMISE CARE

QUALITY

CM How did you come to work in social care?JT Originally I trained as a biological scientist at the Universities of Oxford, London (Imperial College) and Bristol. After my PhD, I joined ICI in leadership of research and development. Following a series of complex international demergers and mergers, we became Zeneca, AstraZeneca and then Syngenta, one of the world’s largest agribusinesses, with a turnover of $13 billion. I was global head of bioscience research, an exciting role leading cutting edge innovation, with large teams and projects all over the world. When our children were four and three years old, I left, because my job took me overseas too much and I wanted to be at home for my family. To cut a long story short, I went back to university part-time to study nutrition, and set up my own business teaching and consulting about nutrition and health. Alongside this, I became a non-executive director on the board of the Somerset Partnership NHS Foundation Trust and subsequently a NED on the Board of Somerset Care. After ten years as a non-executive director in the health and social care sectors, and seeing the challenges and opportunities to make things happen, I applied for the role of CEO of Somerset Care when it was advertised, and was appointed in June 2015. My career as a non-executive director continues in parallel in my capacity as vice chairman of the board of the UK Home Care Association and chairman of the Board of YourLife Management Services.

CM Somerset Care is withdrawing

from local authority-funded homecare contracts. Why led to this decision?JT We want to continue to provide state-funded home care because the need is growing and if not-for-profit organisations like us don’t remain in the game, who will? Sadly, however, we have now had to hand back eight of our local authority funded homecare and supported living contracts because we cannot sustain the large losses arising from inadequate fee rates and we are unwilling to compromise care quality.

The financial pressures have grown more intense with many cost increases, particularly the rise in National Living Wage and the need for sleep-in shifts to be paid at National Living Wage (NLW). We are still providing local authority-funded homecare in Somerset, Wiltshire, BANES and Devon, while expanding our services for those funding their own care.

CM What form should good homecare take to ensure best quality?JT We believe that small is beautiful in homecare. In our experience, it is difficult to ensure happy staff, happy customers and high care quality when operating industrial scale branches delivering tens of thousands of hours of care per week over vast geographies. Data on compliance with CQC standards amongst the largest providers nationally tends to bear this out. We have developed a new homecare model called Willows, focused on outcomes rather than time and task; organised in small, self-managing teams, which we call ‘pods’; and operating in tight geographic patches where carers have high levels of local knowledge and travel time is minimised. New technology solutions using cloud-based mobile apps support this new way of working.

CM Do you think local authorities give providers enough support? JT Local authorities vary substantially in their attitude to providers and in the level of support they offer. Some are very good. Others use the rhetoric of partnership and relationship but in reality treat providers solely as contractors who must do as they’re told, and penalise them for a variety of perceived misdemeanours.

CM What could they do better?JT It would be great to have commissioning for outcomes and enhanced care quality rather than just for reduction in cost. Around the country, there have been some fairly disastrous recommissioning

Inconversation

CareerChief executive officer, Somerset Care (2015 - )Chairperson, YourLife Management (2016 - )Non-executive vice chair, UKHCA (2015 - )

Founding director, Cooking for Health (2007-2015)Non-executive senior independent director, Somerset Partnership NHS Foundation Trust (2001-2003)

www.linkedin.com/in/janetownsonphilpott/

CM meets...Jane Townson Chief executive, Somerset Care

and re-procurement processes, especially in homecare, and we’d like to see lessons being learnt and disseminated. More often than not, we feel we’re handed a fait accompli, with commissioners believing they have all the answers whilst providers are to do what they’re told. We’d like to see providers treated as experts in their field and for commissioners to engage with us in innovation, service development and system transformation. In addition, more could be delegated to providers to optimise efficiency and effectiveness. Commissioners could assist with recruitment and retention by paying fee rates which cover costs, thus enabling improved wages. They could also invest in workforce development by providing subsidised training. If longer-term rather than shorter-term contracts were offered it would help to incentivise provider investment in people, technology and buildings. We’d also welcome more risk sharing with councils with regard to investment in care services. Greater understanding by commissioners of business and factors influencing financial sustainability would be helpful; secondment of commissioners to provider organisations and vice versa might be of mutual benefit.

CM What separates Somerset Care from the competition? JT Somerset Care has been breaking new ground since its launch in 1991 when it became one of the first providers to be formed from the outsourcing of adult social care services by local authorities. We believe we remain at the cutting edge of care innovation through pioneering new evidence-based models of care; promoting integration with health; adopting novel technology solutions; designing state-of-the art buildings; creating new approaches to developing and rewarding our workforce; and collaborating with universities to conduct research and contribute to the evidence base for social care practice.



Inconversation

CM You recently entered into a joint housing with care venture with McCarthy & Stone - how do you see this market developing?JT Our joint venture with McCarthy and Stone in housing with care started in 2010. Over the last seven years, we’ve opened 63 new assisted living (now called Retirement Living Plus) developments nationally, from Aberdeen to the Isle of Wight and from Cardiff to Suffolk. We’ll be opening c.20 new assisted living developments per year for the foreseeable future. In addition, we plan to develop our Willows brand of outcome-focused homecare alongside McCarthy and Stone’s regular retirement living developments nationally. By August 2019, this business will almost have doubled in size.

In my view, as a society we need to move from building individual ‘old people’s home’, ‘retirement living developments’ and ‘dementia villages’, which can feel like ghettos, to creating inter-generational communities which promote healthy longevity by design.

As a country we cannot afford the long-term care costs of a rapidly ageing population and we need to approach this challenge with different thinking.

We know that creating and maintaining social connection between people of different generations; enabling easy ac-cess to healthy food and physical activity;

and encouraging life-long learning, are protective of health and well-being, so why not design communities with these ingredients, thereby creating resilience and reducing over-reliance on health and care services over the long term.

CM How do you marry up providing homecare, care homes and housing with care? What challenges does this throw up and how can you ensure the same level of quality across all these types of care? JT People’s wishes and needs for support and care vary, and change over time. By operating across all settings, from low to high dependency of need, we can ensure people receive the right support,

at the right time, in the right place for them. This creates more opportunities than challenges, though it would be fantastic if we had a single digital care delivery management system for all settings of care. Good care quality depends first and foremost on developing the right culture - one based on great values and great systems, put into practice by exceptional people, with strong leadership. We aim to ensure these ingredients are in place in all our operations.

CM What is the secret to attracting and keeping good workers - and the best way to keep your best managers? JT Clearly articulate culture, values, mission and vision and only recruit and retain those aligned with these. Engage meaningfully with staff and encourage them to contribute to thinking on how to fulfil the mission and vision. Pay fairly. Say thank you. Often. It’s the little things that matter.

Registered managers have the hardest roles in the industry. In my view, the most crucial factors for retention are ensuring that their ‘why’ coincides with our ‘why’ and that they have enough of the right people below and above them to enable them to deliver outstanding customer care.

Other important factors include mean-ingful engagement to listen and support them in driving improvements in quality, customer service and customer develop-ment; first rate training and development; clear career development pathways; suitable environments for them to work in to ensure customer and staff needs can be met and exceeded; and recognition and reward which feels fair and affirming to them.

CM How does Somerset Care plan to grow in the next five years? JT We plan to grow all areas of our business. In the longer term, we want to create alliances to develop new inter-generational communities, which promote healthy longevity by design.

CM If you could change one thing in social care, what would it be? JT More investment.

AS A SOCIETY WE NEED TO MOVE FROM BUILDING

‘OLD PEOPLE’ GHETTOS TO

CREATING INTER-GENERATIONAL COMMUNITIES

CM


Britain’s leading care providers should be heading for a golden age. Older people are getting older. Today, there are more over

80s than ever and globally, by 2050, they will number 434 million, according to the World Health Organisation. And, thanks to the burgeoning ‘Baby Boom’ generation, the oldest old will be 20%of the pensioner population. So, as every-one knows, we are facing a crisis of care needs both now and in future.

But corporate care is under fire with regular critical reports and few corporate homes receiving the gold-plated guar-antee of quality – an Outstanding rating from the regulator. And it seems to be getting worse.

Indeed, in the 12 months from 1 October 2016 to 30 September 2017, reports issued by the Care Quality Commission into homes owned by the so-called ‘Big Five’ – HC-One, Barchester, Bupa, Care UK and Four Seasons - represent a far from impressive view of corporate care. Research into the reports published over the 12-month period show higher than average levels of Requires Improvement or Inadequate homes from four out of the top five largest providers.

What’s the story?So what is happening? Is the corporate

structure simply not cut out for providing

good care or is this situation inevitable under the CQC’s regulatory system?

In its ‘State of Care’ report, published last month, CQC reiterated the fact that smaller and independent homes are re-ceiving better ratings. And the Outstand-ing category,in particular, is dominated by smaller providers - rather than the

largest care groups. According to the CQC report: ‘In both

nursing and residential homes, there is a trend that smaller homes (one to ten beds) are rated better than larger homes (above 49 beds), with 92% of small nurs-ing homes and 89% of small residential homes rated as Good, compared with just 63% of large nursing homes and 72% of large residential homes.’

The CQC admits that this could be, in part, because smaller homes often cater for people with learning disabilities, rather than older people. But, even if the care homes for people with learning dis-

abilities are stripped out, the providers which achieve the highest ratings tend not to be the big groups.

Size-ism in the sector?Some in the industry believe there

has been a harshening in attitude from the CQC inspectors across the board. Privately, though, some say inspections have become tougher for the Big Five in particular. But the current CQC inspec-tion regime, involving as it does close monitoring of governance, process and systems, could inevitably favour smaller homes, where managers and owners are frequently the same person.

Martin Green, chief executive of Care England, the body representing care providers, maintained: ‘Smaller providers are getting better marks. That could be because the CQC has better contact with the providers, who may be on the premises.’

Claire Royston, Four Seasons’ group medical director, rejected suggestions that the system is unfair on big providers and is supportive of inspections.

But she said ‘it is quite complex’ and Dr Royston maintained: ‘I don’t believe the bar is higher for corporate providers but it is different.’

It can be hard for people in a large group home to describe the value of their systems in the same way a smaller home can. And Dr Royston pointed out another

Does SIZE really matter?

Sarah Whitebloom examines whether there is a link, as suggested in the Care Quality Commission’s State of Care report last month, between large providers and poor quality

THE TRANSPARENCY THAT CQC RATINGS OFFER ARE GOOD FOR THE SECTOR

Infocus


Infocus

THE CQC REPORT QUITE DELIBERATELY

USED THE WORD PRECARIOUS IN

SEVERAL PLACES TO DESCRIBE THE

SITUATION

factor could be: ‘Big homes are much more likely to have units where residents have very complex needs – closer to what you might see in a hospital.’

With the regulatory system intended to drive up standards, it is inevitable that many care homes will receive poor marks – even though the overall standard of care they offer is good – because so many factors are in play and there is a constant need to be Good and next time even ‘Gooder’.

Corporate concernsCorporate care groups insist these fig-

ures do not represent a fair reflection of their businesses since they do not take account of their entire estates.

Some also point out that the figures could disproportionately highlight prob-lem homes, since Good homes are less frequently inspected. But 68% of Four Seasons’ total estate is currently rated Good or Outstanding, according to the group.

And a spokesman for HC-One, now the UK’s biggest providers, said: ‘The transparency the CQC ratings offer are good for the sector and, with the fair ap-plication of the inspections, all providers, regardless of size, can demonstrate the quality care being delivered.

‘The figures associated with the last 12 months’ inspections do not reflect the kindness that is shown across all HC-One care homes across the country and at this time, HC-One has achieved a rating of 9.4 out of a maximum rating of ten on carehome.co.uk.’

HC-One added: ‘Where a home re-

quires improvement, our senior lead-ership team and local home managers work extremely closely with the CQC, local authority, and local healthcare profes-sionals to make sure their concerns are addressed in full.’

Meanwhile, a Care UK spokesperson said: ‘We don’t believe it’s possible to generalise about what ‘size’ of care home performs better in CQC inspections. Our own experience is that, of our nursing homes, which are the major part of our portfolio and tend to be larger homes for 50 or more residents, 78.5% are rated ‘Good’ by CQC, compared to an average of 69.5% of nursing home across the sector rated as at least ‘Good’. There are a number of factors which influence how easy or not a particular home will find it to reach a ‘Good’ or ‘Outstanding’ rating including the profile and levels of dependency of the residents who live there and the recruitment challenge in

different parts of the country. ‘Additionally, it is particularly difficult

to compare homes on the basis of size because, as CQC makes clear, many smaller care homes in their statistics are for people with learning disabilities, not for older people and those living with dementia.

‘It is undoubtedly true that CQC’s approach has helped to bring about improvements in care homes, including the larger homes typically run by big providers which we, as a society, so desperately need if we are to meet the growing demand for care home beds.’

Meanwhile, a spokesperson for Bupa, which has a 69% overall Good or Out-standing rating, said: ‘We’re proud of the care our colleagues provide and that the vast majority of our homes are well-rat-ed by the regulators. As an established operator we have an experienced and dedicated team across our homes and

UK top five care home groups

Group# reports

1 October 2016 to 30 September 2017

Outstanding Good Requires Improvement Inadequate

Barchester 111 1% 62% 36% 1%

Bupa 130 1% 59% 37% 3.8%

Care UK 58 1.7% 63.3% 31.5% 3.4%

Four Seasons 94 1% 51% 36% 12%

HC-One 107 0 58% 40% 1.8%

SOURCE LAINGBUISSON CAREMONITOR

Claire Royston,medical director, Four Seasons Health Care


Analysis of our inspections shows that there is a variation in performance depending on the size of services.

In both nursing and residential homes there is a trend that smaller homes (one to ten beds) are rated better that larger homes (above 49 beds), with 92% of small nursing homes and 89% of small residential homes rated as Good, compared with just 63% of large nursing homes and 72% of large nursing homes.

This pattern may be in part because many smaller homes are for people with a learning disability, and these services tend to perform well – they have around half the proportion of Inadequate or Requires Improvement overall ratings compared with services without a learning disability specialism. The caring

and responsive key questions were particularly strong for learning disability services, showing that providers are or-ganising their services to meet people’s needs, and staff are involving people in their care and treating them with com-passion, dignity and respect.

When looking at domiciliary care, our data shows that services providing care to a smaller number of people were also performing better than larger services. Our ratings data shows that 84% of small services (for one to 50 people) were rated as Good, whereas only 73% of larger services (for more than 100 people) achieved the same quality.

We have found that services that care for smaller numbers of people often sound it easier to demonstrate a good

level of responsiveness – for example, by being able to offer activities that are based on people’s individual interests.

It is interesting to note, however, that corporate providers (with 20 or more locations) have been better at improv-ing. As reported in The state of adult social care services 2014 to 2017, only 15% of locations owned by corporate providers remained Inadequate at their last rating, compared with 22% of non-corporate locations. This might suggest that corporate providers are more equipped to step in to support any of their locations that are perform-ing poorly, and we are aware of larger corporate providers establishing quality turn-around teams to address problems at individual locations.

supporting functions. We’re committed to delivering high quality care for every-one in our homes and we work hard to regularly improve our services.

‘As one of the largest providers we can invest in training and development to support our colleagues now and in the future. We are also investing more than £120m this year by refurbishing existing homes and building new care homes and retirement villages. This is on top of more than £100m invested in 2016.

‘We’ve made considerable progress over the past 18 months, and remain committed to driving high standards across our homes. However, if we fall short of the standards our residents expect, we work hard to make long-term improvements. In many cases, these improvements are made immediately after the CQC’s visit, meaning that homes can quickly return to providing the high standards our residents expect.’

The state of things to comeIn its October report, CQC emphasised

the need to improve leadership in the sector.

Mr Green said firms recognised this but, he stressed how difficult it is to recruit and retain good quality staff – including leaders. Currently, there are 40,000 nursing vacancies in England, according to the Royal College of Nursing.

Mr Green said the star rating system had helped improve consistency but the

CQC ‘should be making clear suggestions as to how provision could be improved based on their experience and what they have found.

He emphasised, however, that the main issue – the elephant in the room - remains funding and he pointed out that the biggest scandal to hit care came in the NHS – the Mid-Staffs affair. News from CQC last month that the crisis in care appears averted for now – thanks to a £2bn injection of funds from the Treasury – is acknowledged by the CQC to be just a sticking plaster.

In its report, the regulator quite de-liberately used the word ‘precarious’ in several places to describe the situation. CQC found there were fewer nursing home beds, increased demand for care and continuing pressure on budgets.

The CQC placed the ball, to use the current vogue term, firmly in the gov-ernment’s court. Sir David Behan, chief executive of CQC, said: ‘The future of the social care system is one of the greatest unresolved public policy issues of our time – a long term sustainable solution is urgently required. The anticipated green paper on adult social care will provide the opportunity for Parliament, the public and professionals to consider how we can collectively develop an appropriately funded social care system that can meet people’s needs, now and in the future.’

CQC’s The state of adult social care in England 2016/17 a corporate view

Large homesrated GOOD

49-plus beds

Small homesrated GOOD

63%nursing careresidential care

89%

72%nursing careresidential care

92%

one to ten beds


Infocus

The importance of a CQC rating to care home operators, managers and those they provide care for cannot be under estimated. Nor

can the consequences of a significant fall in a home’s rating.

With the intensity of a CQC inspection in no doubt, a care home improving its ratings is something of an achievement. And to improve your ratings by two bounds from Inadequate to Good or even from Requires Improvement to Outstand-ing is even more of an achievement and

one enjoyed by only a handful of homes. Sector observers note that ratings

improvement can be a perilous business, particularly when what makes a home Good or Outstanding can actually be tangible things to measure.

‘Ratings are subjective things, based on human judgements,’ says National Care Association chair Nadra Ahmed.

Care home manager Chris Harpham, who manages the Four Seasons owned home Charnwood Care Home in Notting-ham (rated as Good in February 2017

after previously having been found to be Requiring Improvement), agrees it can be hard to capture the evidence around what a home can do to improve life for its residents.

‘We always aim to do better; it is about going the extra mile. Getting an Outstanding rating will always be our aim but it will always depend on perspec-tive. And some staff do not talk loudly enough about what they are doing, often because they assume it is normal, what everyone does.’

Self-improvementwhat it takes to improve a CQC rating

Emma Dent looks at how care homes have transformed to get a Good rating


Ms Ahmed says she is not a fan of the ‘mum test’ often used by the CQC as an example on how to assess care homes, against which if they would want their own parent to reside in it.

‘Every resident is different; no one loved one is the same as another. For example, does a clean sink make a hap-py home or not? Does it matter to the residents if dishes are left in a sink for a while? To get from good to outstanding is again subjective. What an inspector considers to be something above and beyond may actually be the norm. The important question is – do the relatives and families think it is outstanding?’

Chief executive of Care England Martin Green agrees that homes need to keep in mind that as important as CQC ratings are, the residents are what they are there for.

‘Many very good homes will say to me; we don’t do this for the CQC, we do this for the residents, but we are able to learn from the CQC,’ says Green. ‘A care home is more than food and shelter; it should show that it is possible to have a fulfilling life in a care setting.’

He believes being Outstanding is

something demonstrated by a home hav-ing an ethos of being ‘open and respon-sive to both residents and families’.

He says: ‘It could also be about sup-porting residents to use their own skills and experience. One resident I spoke to used to run a catering business and had worked with the cook at the home she was resident at to work on a visit from

the mayor, because she knew about the protocols around catering for a mayor.

‘There is also something to be said about spontaneity and about responsive-ness to the residents. In one instance I was visiting a home near the seaside when one resident said as a child she used to be taken for fish and chips as a treat. The manager heard that and short-ly afterwards we were heading to the coast with that resident and four others,’ continues Green.

‘Another home or another manager could have said “going for fish and chips isn’t very healthy” or “what about the risk of one of the residents having a fall while we are out?” It is about having a can do, facilitative attitude and being good at the unexpected; about being risk aware rather than risk averse.’

Keeping an improved status can be as hard as gaining it in the first place. There has even been a recent case of a home that went from Requiring Improvement to Outstanding – only for their rating to go back to Requires Improvement at a further inspection.

Indeed, it was difficult to find providers whose home had improved by two ratings

GETTING AN OUTSTANDING

RATING WILL ALWAYS BE OUR AIM BUT IT WILL ALWAYS DEPEND UPON PERSPECTIVE

SOURCE CQC RATINGS DATA, 31 JULY 2017, TOTAL 21,256 LOCATIONS

ADULT SOCIAL CARE RATINGS OVERALL AND KEY QUESTION


Infocus

to go on the record about what they think had helped them achieve this.

‘When you get to dizzy heights [of a Good or Outstanding rating] it can be tempting to take a rest but there is a need to continually deliver on it. It has to be at the heart of what you do, 24/7. And homes are not unchanging places; as the residents change so you too must adapt to them,’ says Green.

Ms Ahmed agrees that ‘what Good looks like’ should be constantly evolving. ‘And that has got to be all about the home’s leadership.’

However, she acknowledges that the importance of this can in itself cause issues. ‘If a home is struggling financially, being able to afford the best manager could be a problem.’

And she acknowledges that it can be extremely difficult for a home to deal with a poor rating, a rating drop or a rating below what it was expecting.

‘It can be very demoralising and we have been contacted by homes who were very upset to have not got a rating

of Outstanding. But if you think you have an Outstanding service, you should know your service is Outstanding; you don’t have to be told that,’ she says. ‘Nor am I always convinced that it is bells and whistles like technology that make a service Outstanding.’

Mr Green says the importance of the role of the manager shows the emphasis the CQC put on leadership in terms of delivering outstanding services.

‘A manager leaving does not automati-cally mean your rating will go up or down,’ says Green.

‘But in services where you have a very good staff team in place a new manager should help continue the positivity of the team. And when a service needs to improve what is needed [to improve] is a change in manager. They can get rid of unhelpful staff cliques or encourage staff to challenge one another to highlight bad practice.’

England East managing director for Four Seasons Health Care Jacky Reed agrees having the right manager in place is crucial.

‘We now have the right structures in place and the home manager [Chris Har-pham, who joined the home as manager in June 2016] has done a fabulous job. We also a fabulous regional manager who ensures all necessary processes

SOURCE CQC RATINGS DATA, 31 JULY 2017

ADULT SOCIAL CARE OVERALL RATINGS BY TYPE OF SERVICE

Nadra Ahmed, chair, NCA

I AM NOT CONVINCED THAT IT IS BELLS AND WHISTLES THAT

MAKE A SERVICE OUTSTANDING


SOURCE CQC RATINGS DATA, 31 JULY 2017

CHANGE IN OVERALL RATINGS ON RE-INSPECTION ADULT SOCIAL CARE

are in place,’ says Reed, who declined to discuss the home’s previous manager.

Harpham says one of his initial tasks was to ensure the staff were no longer ‘unengaged’.

‘All the staff were passionate about what they do were in need of re-energis-ing. Now we have the baseline with which staff improve the basic standards of

care, with our dementia care framework. All staff go through it, not just those who work in the home’s dementia unit (which opened earlier this year). We also ensure all staff, even agency staff, feel they are part of the team,’ says Harpham.

He believes a network of relationships are key to a home’s success.

‘It is not just the relationship with the

residents and families but with your local authority, with the health professionals who come into the home, the GPs. They all need to be able to be open with you and you need to be able to be open with them,’ he said.

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Care Monitor, England

CQC ratings of care home providers for older people including dementia (by beds)

Rank Δ April 2016 Provider # homes % good or outstanding % not inspected

1 3 Sunrise Senior Living 24 100% 92%2 -1 Excelcare 33 94% 3%3 9 Avery Healthcare 52 87% 27%4 2 Methodist Homes 81 84% 0%5 -3 Sanctuary Care 68 84% 0%6 New entry Minster Care 56 83% 29%7 1 Anchor 121 82% 8%8 -5 Runwood Homes 59 81% 2%9 -4 Abbeyfield Society 66 80% 11%

10 5 Care UK 108 79% 6%11 2 Caring Homes 53 76% 4%12 -2 Barchester Healthcare 165 73% 0%13 5 Shaw healthcare 41 71% 0%14 -5 Orders of St John Care Trust 70 71% 3%15 -8 HC-One 180 68% 4%16 -5 Maria Mallaband & Countrywide 75 67% 19%17 -1 Bupa Care Homes 237 66% 26%18 -4 Four Seasons Health Care 232 64% 4%19 1 Larchwood Care 50 56% 0%20 -3 Orchard Care Homes 52 53% 2%

CQC ratings of nursing care home providers for older people including dementia (by beds)


1 5 Sunrise Senior Living 14 100% 93%2 -1 Excelcare 18 94% 6%3 New entry Gracewell Healthcare 18 91% 39%4 -1 Methodist Homes 34 85% 0%5 7 Care UK 89 79% 8%6 10 Caring Homes 43 76% 5%7 2 Sanctuary Care 23 74% 0%8 6 Avery Healthcare 28 74% 32%9 -2 Barchester Healthcare 142 72% 0%

10 3 Shaw healthcare 24 71% 0%11 -1 Bondcare 19 70% 47%12 -8 HC-One 110 68% 4%13 -2 Bupa Care Homes 219 66% 26%14 5 Larchwood Care 22 64% 0%15 -7 Maria Mallaband & Countrywide 61 60% 21%16 -1 Four Seasons Health Care 181 60% 6%17 -15 Orders of St John Care Trust 30 59% 3%18 New entry Healthcare Homes 18 56% 11%19 -14 Akari Care 23 48% 0%20 -2 Priory 27 41% 0%

CQC ratings of residential care home providers for older people including dementia (by beds)


1 10 Avery Healthcare 24 100% 21%2 -1 Sunrise Senior Living 10 100% 90%3 1 Somerset Care 21 95% 0%4 New entry NorseCare 20 89% 5%5 -2 Sanctuary Care 45 89% 0%6 5 Quantum Care 25 88% 0%7 10 B & M Care 25 87% 8%8 -1 Methodist Homes 47 83% 0%9 -1 Barchester Healthcare 23 83% 0%

10 2 Anchor 120 82% 8%11 -2 Abbeyfield Society 62 80% 10%12 1 Orders of St John Care Trust 40 79% 3%13 -8 Runwood Homes 53 79% 0%14 5 Care UK 19 79% 0%15 -1 Minster Care 39 77% 33%16 0 Four Seasons Health Care 51 75% 0%17 -11 HC-One 70 67% 4%18 -3 Orchard Care Homes 33 59% 3%19 1 Larchwood Care 28 50% 0%20 New entry Ideal CareHomes 16 31% 0%

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Intelligence tables



Care Monitor, England

CQC ratings of adult specialist care home providers (by beds) 1


1 8 Care Management 59 96% 5%2 -1 Voyage Care 258 95% 2%3 0 The Disabilities Trust 37 95% 0%4 1 Caring Homes 55 95% 0%5 6 Regard 66 94% 0%6 -2 Mencap 81 94% 2%7 -1 Lifeways 75 93% 25%8 New entry Pathways Care 43 91% 0%9 -7 Hft 40 90% 3%

10 -3 Choice Care 59 88% 42%11 New entry Heathcotes 47 88% 30%12 -2 PrimeLife 29 86% 0%13 2 Priory Adult Care (fka Craegmoor) 208 86% 8%14 -2 Exemplar Health Care 23 85% 13%15 -1 Allied Care 38 84% 0%16 0 CareTech Community Services 131 83% 0%17 0 Leonard Cheshire Disability 82 82% 0%18 New entry Cygnet Health Care 36 81% 25%19 0 Four Seasons Health Care 13 77% 0%20 -2 Sussex Health Care 14 77% 7%

CQC ratings of homecare providers (by revenue)

Rank Provider % good or outstanding % not inspected

1 Alternative Futures 100% 0%= Dimensions UK 100% 14%= Helping Hands 100% 70%= Marie Curie 100% 43%= Somerset Care 100% 22%6 MENCAP 98% 10%7 Homeinstead Senior Living 97% 20%8 Bluebird Care 93% 17%9 Turning Point 93% 21%

10 Lifeways 92% 14%11 Voyage 92% 6%12 Housing & Care 21 90% 0%13 Allied Healthcare 75% 11%14 City & County Healthcare 75% 8%15 Carewatch 72% 21%16 Mears 71% 24%17 Sevacare UK 69% 24%18 Community Integrated Care 67% 25%19 MC Care (fka MiHomecare) 58% 20%20 Direct Health 50% 0%

NOTES 1 INCLUDES ADULTS UNDER 65, BRAIN INJURY REHABILITATION, EATING DISORDERS, LEARNING DISABILITIES, MENTAL HEALTH, PHYSICALLY DISABILITIES, SENSORY IMPAIRMENT AND SUBSTANCE MISUSESOURCE LAINGBUISSON’S CARE MONITOR DATA CORRECT AS OF 2 NOVEMBER 2017

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INBUSINESSNOVEMBER 2017


INDEX

Abbeyfield Society 45 Four Seasons Health Care 40

Advinia Health Care 46 HC-One 46

Apache Capital Partners 48 Hesley 47

Audley Retirement Villages 58 Home Instead Senior Care 58

Barchester Healthcare 43 Huntercombe Group 40

brighterkind 41 MedicX 48

Brookdale 46 Midland Heart 45

Bupa Care Homes 41 MyLife 42

CareTech 46 Octopus Healthcare 48

Carewatch 42 Robinson Medical Recruitment 42

CMG 48 Selbourne Care 46

Elysium 58 Terra Firma 40

ExtraCare Charitable Trust 45 Trascare 46, 57


INBUSINESS

Following concerns that its capital structure is not suitable for the long-term stability and

requirement of its business, Four Seasons Health Care’s (FSHC) high yield bond group has signalled its intention to launch financial creditor and leasehold estate restructuring this month.

The business currently does not produce enough cash to serve the debt to its high yield bond holders in the long term.

The debt was taken out when owners Terra Firma bought Four Seasons in 2012.

Chairman Robbie Barr told CM: ‘We want to move to a business that is absorbing cash every year to one that is generating cash every year. It will allow us to invest in new projects to develop our business and to remain a sector leader in improving care for residents and patients.’

This would include continuing to refurbish the brighterkind estate and finance future projects in the self-pay business, its public-facing FSHC division and its specialist care arm The Huntercombe Group.’

For the past 18 months he said Four Seasons had been very clear that a capital restructuring was needed to ensure the long-term stability of the business and allow it to continue to build on its strong operational turnaround.

Barr said: ‘The proposal being put forward to creditors by FSHC and its shareholders will, we strongly believe, provide certainty and

continuity for our residents, patients, and the thousands of colleagues who deliver care across the business, whilst also protecting creditors’ value.’

Due to launch this month, the move will see Four Season’s owner Terra Firma adding 24 care homes to the estate. These homes were valued at £136m at 31 December 2016, contributing an EBITDA increase of £18.9m and a cash flow increase of £17.1m (each being last 12 months to June 2017).

As the homes are cash positive, it is hoped they would generate more resources for the business. If the deal, which is expected to take six to eight weeks to complete, goes ahead, the homes would become part of its high-yield bond group.

It also plans to rebase selected leasehold rents to market as many of its homes are currently paying over market levels of rent.

As well as changing the capital structure, Four Seasons plans to refinance it debts to its bondholders.

The will be done by Existing Senior Secured Notes (SSNs) of £350m being exchanged for £350m of New SSNs. The interest will comprise a cash element and an element that accrues and is paid at

maturity of the New SSNs. In addition, they will benefit

from an extensive guarantee and first ranking security package granted by the restructured group

The existing Senior Notes (SNs) of £175m at 12.2% will be exchanged for £60m of New SNs and 20% of the equity in the restructured group. In addition, there will be no payment of the existing Senior Notes £10.7m December interest

In addition, as of 16 October 2017, Four Seasons separately refinanced the term loan facility with a new £40m term loan.

Justin King, vice chairman of Terra Firma said: ‘We bought FSHC in 2012 with a clear plan that by reducing the debt and injecting £350m of equity it would become a viable business. Since

then, all the action we have taken in support of the company demonstrates how seriously we take our role as a responsible investor. The operational turnaround has made good progress and despite the challenging external environment, we still believe this business has a great deal of potential. We are now offering to inject a further £136m of value which, together with the proposals on debt, if agreed, will give the business the secure financial footing it needs to continue the good progress made by management in the last two years. This ultimately will provide stability for all stakeholders including, most importantly, residents and their families.’

Four Seasons to restructureCare home operator also plans to refinance its debt in order

to become cash generating

“We want to move to a business that is absorbing cash every year to one that is generating cash every year”

CM

Justin King, vice chairman, Terra Firma


N O V E M B E R 2 0 1 7

Four Seasons plans capital restructure

Four Seasons Health Care is now organised as three operationally inde-pendent businesses:

Four Seasons Health Care - a national network of around 350 homes, mainly with nursing, offering care for frail older people and people with dementia, the latter under the umbrella of the com-pany’s PEARL dementia service.

brighterkind - a group of homes offering high quality elderly care together with hotel standard services and activity programmes designed for residents who see the option of a

Four Seasons Company profile

care home as a life enhancing choice

The Huntercombe Group - specialist units providing care, treatment and reha-bilitation services in mental health, acquired brain injury and neuro-disability that are complementary to, and in partnership with, the NHS.

The Huntercombe Group division holds all of Four Seasons’ mental health hospitals (with 427 beds at mid-2017) and about half of the company’s 1,044 beds (at mid-2017) in specialist adult care homes for people with brain injury, mental health problems and learning disabilities.

At the end of April 2012 Four Seasons announced that private equity company Terra Firma had agreed to acquire the company for a consider-ation of up to £825m, being 8.1 times EBITDA of £101.3m in calendar year 2011. The transaction, which completed

in July 2012, was hailed as putting the capital structure of the UK’s largest care home provider on a stable long term footing.

Key Stats (six months ended 31 Dec 2016)

Chairman Robbie Barr 2016 Revenue £686.2m

CEO Tim Hammond 2016 EBITDAR £108m

Portfolio

FSHC(older people)

370 homes19,261 beds

Specialist Care(adult specialist care, mental health)

37 homes1,286 beds

PROFITABILITY EBITDAR CARE HOMES OLDER PEOPLE

SOURCE LAINGBUISSON DATABASE

10%

15%

20%

25%

30%

35%

40%

Barchester (y/e Dec)

Care UK (Residential CareDivision)Bupa (y/e Dec)

Four Seasons Care HomesDivision (y/e Dec)*HC-One (y/e Sept)

Caring Homes (y/e March)

Avery Healthcare (y/eMarch)

CM


INBUSINESS

Homecare franchisor and direct provider Carewatch reported revenues of £105.1m for the 15 months ended 31 March 2017 (12 months 2016: £67.9m), including £13.1m from acqui-sitions (2016: £9.1m).

The business includes Carewatch, which supports around 8,300 peo-ple nationwide, largely through local authority contracts, its newly launched private pay business MyLife and in the south of England, and its Scottish staffing agency Robinson Medical Recruitment, which it acquired during the report period.

Cost of sales stood at £72.5m (2016: £43.4m), while administrative expenses were £43.5m (2016: £33.6m) including intangibles amortisation (excluding software) and exceptional items of £14.8m, leaving Carewatch with an operating loss of £10.9m (2016: loss £5.6m) which included a profit of £1.7m from its acquisitions.

Interest income of £18.6m (2016: nil) and charges of £9.1m (2016:

£6.1m) reduced the pre-tax loss to £1.3m (2016: loss £11.7m).

On 31 March 2017, Lyceum Capital LLP converted a ‘significant propor-tion’ of its investor and directors loan notes into equity and £18.6m of ac-crued interest was waived and £22.4m of participating loan notes were trans-ferred from Carewatch Bidco Limited to the company in exchange for the issue of K and L shares. The partici-pating loan notes were then released by the company resulting in a credit to the share premium of £22.4m. Lyceum extended the term of the remaining investor loan notes by six years.

Chief executive Scott Christie said in its Carewatch business, local authority funding increases offset increases in the National Living Wage but central Government had been slow to respond to the wider systemic challenges faced by the sector.

Its MyLife business now supports around 800 people, offering live-in care, complex care and daily assisted

living. RMR now has 180 customers, supplying NHS and independent hos-pitals and care homes with nurses and healthcare assistants.

Christie said: ‘The market we operate in remains fragmented and the general pace of consolidation has slowed in recent years given funding constraints in the market. Nonetheless we remain watchful for acquisition opportunities that can open up new geographies, build on existing operations or expand our service offering.

‘During the 15-month period we

Losses lessen for Carewatch

Scott Christie, CEC, Carewatch

OperatorLatest Annual Homecare and Supported Living Turnover of

Independent Sector Providers, all client groups (Older, YPD, LD and Mental Health) £m

Market share %

Lifeways Group (excluding care home revenue from gross of £230m) 195 3.1%

Allied Healthcare (excluding Nestor GP out-of-hours revenue) 168 2.7%

Carewatch (franchisor and direct provider) 165 2.7%

Mears Group plc (including former Care UK home care division) 153 2.5%

City & County Healthcare 124 2.0%

MENCAP (est. for home care / supported living, exc. care homes) 100 1.6%

Community Integrated Care (estimate excluding care home revenue) 84 1.4%

MiHomecare (MITIE Group) 78 1.3%

Bluebird Care (franchisor) 75 1.2%

Dimensions UK (estimate excluding care home revenue) 74 1.2%

Sevacare UK Ltd 66 1.1%

Turning Point (non-residential care only) 50 0.8%

Remainder 4,868 78.5%

Estimated total independent sector market size 2016 6,200 100%

NOTES 1 FIGURES BASED ON STATISTICS TAKEN FROM COMPANY ACCOUNTS, ANNUAL REPORTS AND ESTIMATES BASED ON HOURS OF CARE REPORTED IN THE PUBLIC DOMAIN.(REVISED MARKET SHARE FIGURES DUE TO NEW DATA BECOMING AVAILABLE. MARKET SIZE FIGURE BASED ON HEALTH AND SOCIAL CARE INFORMATION CENTRE DATA)SOURCE LAINGBUISSON DATABASE

UK independent homecare providers1 by market share sponsored by


CMN O V E M B E R 2 0 1 7

Losses lessen for Carewatch and Barchester’s profits grow

Private pay proves profitable for Barchester

Barchester has recorded a 5.3% rise in revenues for the year ended 31 December 2016 from £535.6m to £563.9m. This rise was driven by higher fee rates with the number of available beds and occupancy levels dropping during the year.

Cost of sales were £501.8m (2015: £482.2m), administrative expenses were £41.2m (2015: £35.3m), leaving an operating profit of £20.9m, a 7.8% increase on the previous year’s £35.3m.

The directors said this latter figure included depreciation of £2.9m, restructuring costs of £1.9m, a £0.5m loss on the disposal of fixed assets, a £1.3m rise in external rent and non-recurring of impairment of goodwill of £0.8m, resulting in an underlying operating profit figure of £8.6m.

The directors reported an EBITDAR figure of £163.3m (2015: £154.7m), with margins increasing slightly from 28.9% to 29%. The increase in revenues was offset by an increase in the cost of labour hours and the increased use of agency staff, with 5.1% of hours being filled by agency staff (2015: 3.9%).

Interest charges of £17.1m (2015: £15.1m), largely made up of interest on obligations under finance leases and hire purchase contracts of £16.6m (2015: £15.1m), left Barchester with a pre-tax profit of £3.7m, up 26.2% on the previous year’s £3m.

Net debt fell to £150m (2015: £151m) including £162m of finance leases (2015: £154m) due to the group fully repaying its bank borrowings. One new home opened during the report period which is subject to a new finance lease, leading to increase in obligations year-on-year.

The board did not recommend a dividend as surplus cash is to be invested in the maintenance and enhancement of its property portfolio ‘to help maintain the competitive position of the business.

The directors reported that the group has a very strong balance sheet, with reduced bank and other debt, which leaves it free to explore ways of inventing cash to support future growth in the scale of operations.

They said: ‘We must also acknowledge that trading conditions are providing a

degree of margin compression across the sector. The introduction of the National Living Wage in April 2016 has increased the cost base of the group significantly and will continue to do so the NLW increases in line with government promises.

‘Local authority spending cuts continued through 2016 and look set to continue into the future putting pressure on the rates available for local authority and health service funded clients.

‘Continued pressure is being exerted to reduce government and local authority spending, which is manifesting itself increasingly in the reduction of fees being paid for the care of funded residents. As a response to pay the fees required, our business continues to focus more on the provision of space to the privately-funded individuals.’

acquired two businesses - Robinson Medical Recruit-ment and our North Lanark-shire Franchise (Annlen). The Group also acquired trade and assets in several locations including from Housing & Care 21, as well as one of our franchisee’s based out of Rugby.

‘The business will continue to make selective acqui-sitions in the year ahead. These are likely to be mainly in support of the MyLife private pay brand.’

Carewatch also refinanced during the report period, with new facilities provided jointly by HSBC and RBS. They include £15m of senior term loans, a £4m revolving credit facility, and earn out facility of £3m and a £10m uncommitted accordion fa-cility to fund future growth.

Meanwhile, fellow home-care franchiser Bluebird reported revenues of £8.8m (2015: £7.5m) for the year ended 31 December 2016. Cost of sales were £0.3m (2015: £0.2m) and admin-istrative expenses stood at £2.2m (2015: £2.3m) leaving an operating profit of £6.1m, up on the £5m reported the previous year. Interest income of £139,000 (2015: £140,000) left Bluebird with a pre-tax profit of £6.2m (2015: £5.1m).

The directors said: ‘Blue-bird Care’s commitment to delivering high quality care and support services has played an important part in their success. With over 200 offices in the UK and the Republic of Ireland, Blue-bird Care delivers in excess of 7.9m care visits every year, which equates to over 22,000 care visits to around 9,500 customers each day.

Peter Calveley, CEO, Barchester Healthcare


Organisation Year end Revenue £m %Δ EBITDA(R)

£000s %ΔEBITDAR Margin

(%)

PBT £000s %Δ Net Debt 1

£000s

Abbeyfield Society 31 Mar 2017 54.3 26.0% 12,121 287.9% 22.3% 8,596 342.2% (17,032)

Amyn Hotels 31 Dec 2016 35.9 12.4% 10,678 12.8% 29.8% 7,939 19.1% 49,528

Autism Initiatives (UK) 31 Mar 2017 46.7 8.5% 633 172.9% 1.4% 1,057 456.3% (4,150)

Barchester Healthcare 31 Dec 2016 563.9 5.3% 162,749 4.3% 28.9% 3,739 26.2% 308,694

Brunelcare 31 Mar 2017 33.0 (0.6)% 4,895 25.7% 14.8% 1,906 1,003.3% 8,908

Careline UK Monitoring 31 Dec 2016 7.2 7.4% 2,900 (9.7)% 40.4% 1,031 (31.8)% (17)

Carewatch Holdings 2 31 Mar 2017 105.1 54.7% 4,712 (28.7)% 4.5% (1,331) 88.7% 27,231

CBI UK Topco 31 Dec 2016 16.4 329.2% 5,127 239.0% 31.3% (613) (725.9)% 6,992

Circle Care and Support 31 Mar 2017 15.2 (5.8)% 882 (67.6)% 5.8% 1,089 1,628.6% 0

CMG Holdco 28 Feb 2017 66.8 11.3% 16,345 14.0% 24.5% 13,078 384.9% 55,287

Custodes Topco 31 Dec 2016 39.8 (0.9)% (1,515) (159.4)% (3.8)% (6,311) (1,932.9)% 19,102

DMWSL 532 31 Mar 2017 51.4 4.5% 9,537 (16.7)% 18.6% 3,779 (33.5)% 74,624

Educo One 31 Dec 2016 49.5 10.4% 16,970 12.2% 34.3% 625 211.9% 100,733

Elizabeth Finn Homes 31 Mar 2017 27.1 5.9% 5,934 24.0% 21.9% 2,432 89.2% (924)

Enable Care & Home Support 31 Mar 2017 15.1 11.5% 352 3,100.0% 2.3% 101 127.8% (3,836)

ExtraCare Charitable Trust 31 Mar 2017 85.8 4.9% 13,332 25.2% 15.5% 7,262 30.9% 125,642

Graham Care 31 Dec 2016 28.1 16.6% 9,438 2.2% 33.5% 7,183 (4.3)% 47,919

Healthcare Management Trust 31 Dec 2016 32.0 0.8% 2,280 68.8% 7.1% 2,621 236.2% (645)

Hesley Holdings 31 Dec 2016 41.3 7.8% 7,494 0.6% 18.1% 1,102 (78.5)% 32,271

Indigo Parent 31 Dec 2016 586.6 (5.4)% 60,222 (16.7)% 10.3% 6,539 (62.2)% 307,691

Johnson Care 31 Dec 2016 17.8 16.6% 1,758 0.9% 9.9% 1,097 7.3% 8,607

Kedleston 31 Dec 2016 20.4 3.4% 3,568 164.9% 17.5% (5,985) 62.9% 51,246

Knight Square 31 Dec 2016 75.4 1.3% 13,277 (8.2)% 17.6% 157 (96.4)% 58,903

Life Style Care 31 Mar 2017 18.9 (4.8)% 3,479 (6.1)% 18.4% (947) 62.3% (104)

Prestige Nursing 31 Dec 2016 27.5 1.6% 1,078 (18.2)% 3.9% 99 (68.6)% (88)

Randstad Care 31 Dec 2016 45.6 8.8% 597 (5.1)% 1.3% 394 (23.0)% (137)

Saxon Weald homes 31 Mar 2017 45.2 3.9% 23,112 20.0% 51.1% 7,828 71.9% 211,195

Sentinel Health Care 31 Jan 2017 9.3 3.1% 1,945 29.4% 20.9% 964 92.6% 7,659

Sirona Care & Health C.I.C 31 Mar 2017 109.0 38.9% 1,928 (9.5)% 1.8% 7 100.8% (6,688)

Slough Children’s Services Trust 31 Mar 2017 35.3 132.4% (2,105) (990.1)% (6.0)% (2,096) (1,000.8)% (5,348)

SSL (UK) 31 Dec 2016 34.4 37.7% (2,202) (148.7)% (6.4)% (29,383) (279.6)% 20,170

Tracscare Holdco 31 Mar 2017 57.3 28.6% 11,518 7.6% 20.1% (16,513) (34.1)% 125,102

Westminster Homecare 31 Dec 2016 40.3 12.9% 1,156 (27.8)% 2.9% (30) (109.2)% (258)

Your World Recruitment 31 Dec 2016 117.4 19.5% 5,414 (23.7)% 4.6% 4,687 (29.2)% 14,306

NOTES 1 NET DEBT = (INTEREST BEARING DEBT + FINANCIAL LEASES - CASH), FIGURES IN ( ) DENOTE CASH. 2 15 MONTHS. Δ CHANGE FROM PREVIOUS YEARSOURCE LAINGBUISSON DATABASE

Company results round upA summary of the latest results available in the care sector, revenues over £1m

Intelligence tables



Abbeyfield’s results and ExtraCare expands

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Acquisitions boost Tracscare’s revenues

In the first full year following its acquisition of Brookdale, Tracscare reported a 28.6% rise in revenues for the year ended 31 March 2017 from £44.5m to £57.3m. Of this, £40.2m came from residential servic-es (2016: 34.4m), £12.4m from therapeutic services (2016: £8.6m) and £4.6m from supported living (2016: £1.5m)

Cost of sales increased accordingly to £37.5m (2016: £28.5m) and administrative expenses of £21.2m (2016: 13.4m) left the specialist care group with an operating loss of £1.4m (2016: £2.6m).

After deducting interest and similar charges of £15.2m (2016: £15m), Tracscare reported a pre-tax loss of £16.5m compared with £12.3m the previous year.

The directors reported an EBITDA be-fore exceptionals figure of £11.5m (2016: 10.6m). They said: ‘The directors believe the key to growing the business is occupancy and supported living hours. Occupancy and hours grew over the period, both on a like-for-like and inorganic basis.

‘The Group’s primary strategy is to focus on its four core areas of specialism; mental health, acquired brain injury (ABI), complex

needs and learning disabilities. ‘The Group operates in a competitive

market, with independent operators account-ing for the large majority of specialist care provision. While the Group enjoys preferred provider status with a small number of pur-chasing authorities, all of its business is on a ‘spot purchase’ basis from a broad geograph-ical spread of purchasers. This provides the Group with some protection against a change of purchasing pattern by any one purchaser.’

In October 2016 Tracscare acquired ABI, complex needs and learning disabilities pro-vider New Bridges and the results include the financial statements from 25 October 2016. It added the supported living business of Em-brace Group to its portfolio in January 2017.

It also opened a new service in Swansea that provides care for up to seven people and continued its programme of home refurbish-ments.

Following year end, Tracscare raised £5.3m through the issue of ordinary and preference shares in order to fund further growth of the Group.

CareTechWith the performance of acquisitions made in the past few years ahead of expectations, CareTech told its shareholders in a pre-close trading statement that it now plans to invest further in some of these businesses.

Around a third of the 248 beds added to its portfolio during the year are a result of CareTech’s acquisition of Selborne Care Limited in June 2017, which has an residential capacity of 57 beds and provides supported living services to 30 adults. Selborne Care has performed in line with expectations, the directors said.

The remaining 161 beds were brought into service through new and reconfig-

ured services and 33 places were withdrawn for configu-ration into new care models.

Ahead of the publication of CareTech’s preliminary results for the year ended 30 September 2017 in Decem-ber, occupancy levels in the mature estate remained strong at 93% (2016: 93%) and the blended occupancy was around 86%.

The board told sharehold-ers: ‘Annual fee rate negoti-ations with local authorities

have again led to a positive outcome this year. The key to improving fee rates remains our work on recon-figuring services that we own and repositioning them for the needs of more complex service users in line with commissioner demand.

‘Net debt reduced to £147.2m at the period end (30 September 2016: £156.9m) with the pro-ceeds from the placement of 11,000,000 new shares in March which raised £37m of net proceeds being partly spent on the acquisition of Selborne Care in June. The group continues to work on a number of other acquisi-tion opportunities and has a strong pipeline of projects and transactions in progress.’

Following its sale of 122 care homes to HC-One for £300m, Bupa has sold 22 of its large-scale nursing and residential homes to Advinia Health Care for an undisclosed sum.

The move, which is subject to regulatory approval, will see 2,714 beds transferred to Advinia, expanding its portfolio to 38 homes with 3,250 beds. Dr Sanjeev Kanoria and his wife Sangita founded Advinia Health Care in 1999.

Dr Kanoria is the chairman of the group, an ex Mckinsey consultant and liver transplant surgeon in London.

Advinia Health Care

“The key to improving fee rates remains our work on reconfiguring services that we own and repositioning them for more complex service users in line with commissioner demand”

INBUSINESS


Hesley Holdings Limited reported a 7.8% increase in turnover on its chil-dren’s services business for the year ended 31 December 2016.

Revenues stood at £41.3m compared to £38.4m the previous year thanks to a 3.7% rise in occupancy to 77.9% and an increase in average fees of 3.9% from £4,530 per week to £4,705 arising from increasing entry level fees, more complex needs requiring addi-tional staffing and fee uplifts from local authorities.

After deducting staff costs of £27.9m (2015: £24.9m), depreciation of £1.8m (2015: £1.6m), bonus payments of £2.2m (2015: nil), exceptional costs of £1.3m (2015: nil) arising from a refi-nancing review and strategic payments and other operating expenses of £6.2m (2105: £6.2m), left the group with an operating profit of £2m, down on the £5.6m achieved the previous year.

Taking account of interest on bank overdrafts and loans of £0.9m (2015:

£0.5m including £0.1m of interest on financial liabilities), the group reported a pre-tax profit of £1.1m on its special education schools and residential care for adults with autism, complex needs and challenging behaviour, compared to £5.1m the previous year. All of its services were rated as Good or Out-standing by the Care Quality Commis-sion or Ofsted.

The board reported an adjusted EBITDAR figure of £7.5m (2015: £7.4m) but, as a percentage of fees, margins decreased from 19.4% to 18.1%.

They said: ‘Operating margins have slightly reduced, the principal cause be-ing the implementation of the National Living Wage following the announce-ment of the Chancellor in his autumn statement in 2015 which increased our payroll costs by 4.5% offset by fee uplifts agreed by authorities.

‘During the year, the board took the decision to recognise its employees for

long-term support which they have provided to the Group by means of a one-off length of service bonus of £100 per year employed with the Group. Total bonuses of £2.2m were paid during the year as an exceptional item.’

It also carried out a strategic review of its businesses and finances, leading to restructuring of debt and equity to reduce the cost of capital, with a total funding package of £43m agreed, of which £35m was utilised.

The board added: ‘Our capital expenditure has been split into two elements; increasing capacity to sup-port future occupancy and investing in current capacity to support our current occupancy. During the year we spent £0.6m (2015: £2m) on completing a number of capacity increasing projects which increased our capacity by five beds and £2m (2015: £2.4m) on invest-ment in current capacity.’

Hesley gives staff £2m bonus

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Hesley reports strong year and shares it with staff

INBUSINESS

Apache sells homes to MedicXApache Capital Partners has sold the prime freehold portfolio of three care homes to MedicX Healthfund II for £28m. The Maria Mallaband Care Group (MMCG) homes were pur-pose-built following the acquisition of the sites in 2013 and offer a total of 173 beds.

Located in affluent south-east England locations, including Gerard’s Cross, Bisley and Canterbury, which attracts self-funding residents, MMCG operates the facilities on separate leases with over 33 years un-expired and annual RPI-linked rent reviews. All the properties are Strutt & Parker and Knight Frank advised Apache Capital Partners on the transaction, which represents a total investment of approximately £28m. Octopus Healthcare, which manag-es the MedicX Healthcare II fund, has committed more than £370m in investing in elderly care homes and specialist healthcare premises since 2010.

Richard Jackson, co-founding part-ner at Apache, said: ‘We successfully generated very attractive ungeared returns ahead of our geared forecast for our investors by developing, stabilising and selling the MMCG portfolio. This is in line with Apache Capital’s strategy of investing and de-

veloping early into alternative sectors to create institutional grade bespoke portfolios of scale, before exiting to institutional investors.

‘Despite ongoing market uncertain-ties due to Brexit, this sale reinforces our investment focus on sectors whose performance and occupational demand fundamentals are in part underpinned by limited high quality

supply and non-discretionary spend, enabling us to generate stable, supe-rior, long-term income. We continue to invest into other opportunities offering superior income and capital growth across the private rented sector, student accommodation and healthcare sectors, including retire-ment villages.’

CMG GroupThe holding company of Care Management Group (CMG) reported revenues of £66.8m (including £3.2m from discontinued opera-tions) for the year ended 28 February 2017, compared to £60m the previous year.

Cost of sales from its residential care, outreach and supported living services for people with learning disabilities and complex needs (including mental health) were £39.6m (2016: £34.4m).

Along with administrative expenses of £16.8m (2016: £17.6m), this left CMG with an operating profit go

£10.3m, up on the £8m it achieved the previous year.

A reduction in finance costs to £3.7m (2016: £5.4m), due to a drop in loan interest and amorti-sation of loan issue costs, boosted pre-tax profits to £13.1m - a significant increase of the £2.7m reported the previous year. As a result, the company paid a dividend of £13m at the year end, compared with nothing the previous year.

The directors said: ‘Turn-over has increased 11.3% to £66.8m following a full year of trade from acquisitions made during the previous year and additional trade

from acquisitions made during the current year.

The core operating business has also performed strongly which is shown through the 1.5% increase in cash flows from oper-ations, increasing from £10.8m to £10.9m.’

During the report period, CMG acquired The Hartley Centre, Embrace Lifestyles (C) Limited, Helene Care Limited, Sevilles Limited and Philori Care Limited. It also disposed of the freehold interest in 24 supported liv-ing properties and the trade assets of Belgravia and Herts Outreach were hived down to Care Your Way Limit-ed (a previous subsidiary undertaking of the group) in November 2016 prior to a disposal of the investment in CMG (Domiciliary Care Investments) Limited on the same date.

“The core operating business has also performed strongly which is shown through the 1.5% increase in cash flows from operations, increasing from £10.8m to £10.9m”

Richard Jackson, partner, Apache


CMO C T O B E R 2 0 1 7

Voyage acquires FHL, Target on target and Regard’s results

Themes include:

Out of Hospital Healthcare and the digital shift

Attracting investment

Value across elderly care and specialist care

Detailed look at the M&A and financing environment

Investing in Healthcare ConferenceLondon, 8th February 2018

Sponsors Media Parner


REGISTER TODAY EARLY BIRD

I n t u n e w i t h y o u r w o r l d

LEGAL EXPERTISETHAT’S IN TUNEWITH YOUR WORLD.

A HEALTHY APPROACH TO LEGAL EXPERTISE.

At Gowling WLG, we have a team of experts in health and care issues advising clients on matters from new care models to real estate transactions, from procurement law to competition law advice, from employment law support to investigations/inquests. Whatever your requirements, we have a specialist who can help. For more information, please contact:

Robert Breedon T +44 (0)370 730 2862 [email protected]

Gowling WLG (UK) LLP is a member of Gowling WLG, an international law firm which consists of independent and autonomous entities providing services around the world. Our structure is explained in more detail at www.gowlingwlg.com/legal.

I n t u n e w i t h y o u r w o r l d

LEGAL EXPERTISETHAT’S IN TUNEWITH YOUR WORLD.

A HEALTHY APPROACH TO LEGAL EXPERTISE.

At Gowling WLG, we have a team of experts in health and care issues advising clients on matters from new care models to real estate transactions, from procurement law to competition law advice, from employment law support to investigations/inquests. Whatever your requirements, we have a specialist who can help. For more information, please contact:

Robert Breedon T +44 (0)370 730 2862 [email protected]

Gowling WLG (UK) LLP is a member of Gowling WLG, an international law firm which consists of independent and autonomous entities providing services around the world. Our structure is explained in more detail at www.gowlingwlg.com/legal.

Abbeyfield’s surplus grows Charitable care operator The Abbey-field Society reported a 26% rise in revenues for the year ended 31 March 2017 from £43.1m to £54.3m. After deducting operating costs of £45.3m (2016: £42.2m), Abbeyfield made an operating surplus of £9m, a signif-icant improvement on the £0.9m reported the previous year.

A loss on the disposal of PPE Housing Properties of £0.4m (2016: surplus £1.3m), as interest and financing costs of £0.5m (2016: £0.3m) left the op-erator with a pre-tax surplus of £8.6m compared with £1.9m in 2016. Cash reserves were £22.6m (2016: £27.6m)

Chairman Ian Plaistowe said that both the turnover and operating surplus fig-ures benefitted from the from the trans-fer-in of seven member societies with a total asset fair value of £9.7m. Before legacies, donations, closed houses and transfers-in from member societies

and other transfers-in, its underlying operating deficit was 0.4%, well below its internal target of a 5% surplus.

Furthermore, following an internal review of its fixed assets accounting and related policies, some equipment items were found to be incorrectly categorised as structure. This has resulted in a £2.6m reduction of opening reserves.

He said: ‘The underlying operating performance for the year was disap-pointing due to supported housing and care voids increasing by £500,000, along with the aforementioned change in fixed asset accounting which was not anticipated in our financial planning, and an additional £300,000 being spent on major repairs, and hence we fell short of our operating surplus targets. However, in other respects, we had a successful year, with improved fundraising, and we are actively attract-ing new residents and look forward to a

solid financial performance in 2017.’Plaistowe added that a £2.3m loss

was incurred from the closure of its Pon-teland, Clare, Wrekin, Dorchester and Kendal properties during the year.

He added: ‘We have £147m of housing and other assets and are com-mitted, from our strategy, to developing 750 new units by 2020. To date 239 units have been completed, 215 units are in progress on site and a further 496 units have obtained planning approval. A further 62 units are in the process of planning with another 243 units at the pre-planning phase. Overall, in the period covered by our strategic plan (2015-2020), we are well on the way to achieving and exceeding our targets for new homes. We have agreed bank facilities of £29.5m, which enable us to meet our development strategy.

The ExtraCare Charitable Trust increased its turnover by 4.9% from £81.8m to £85.8m for the year ended 31 March 2017, with its new village in Coventry, Earlsdon Park, contributing £2.5m towards this.

Operating costs stood at £76.4m (2016: £74.9m), leaving the housing with care provider with an operating surplus of £9.4m (2016: £6.9m). Taking into account interest charges of £2.9m (2016: £2.2m), the charity achieved a surplus of £7.3m for the year, up 30.9% on the previous years’ £5.5m.

Chairman Martin Shreeve said: ‘The balance sheet was strengthened further during the year as a result of the positive financial results, with total funds increasing from £43.4m to £50.7m.

‘ExtraCare remains in a strong position with good demand being generated for our new village develop-ments and funding in place for everything we want to do. Other opportunities to extend our area of operations are also being considered.

‘Completed housing property fixed assets have increased from £102m to £114.4m with total fixed as-sets increasing by £24.6m to £160.2m. To support this, to-tal loan finance of £134.3m was drawn at the year end. We worked hard in the year to reduce our loan to value ratios and a target to reduce this ratio further has been included in our corporate plan. Work in progress of £71m relates to that element of expenditure to date on villages in development for properties that will be sold to

future residents.’In addition to Earlsdon

Park, which opened in July 2016, ExtraCare opened its fifth village in Birmingham in July 2017 and its first village in High Wycombe is due to open in May 2018. During the report period work started on its first vil-lages in Stoke Gifford, near Bristol, and Bedford, and its Bournville Gardens devel-opment was expanded. The charity has also secured land in Solihull that will allow a location to be built there from 2019.

Shreeve added: ‘The number of retirement vil-lages we own and operate has increased and is set to grow further. The number of locations and small-scale schemes we operate on behalf of other landlords is set to decrease significantly

Earlsdon Park boosts ExtraCare’s revenuesas Midland Heart decided to bring the management agreement for its locations in-house. We are working closely with Midland Heart to manage the transition of a further two villages and 12 housing schemes as the contract comes to an end in August 2018. These locations will transition to Midland Heart progressively from August 2017.

‘It is our strategy to con-tinue to grow our portfolio of locations at a sustainable pace. We will focus on devel-oping ‘clusters’ to exploit the benefits of shared services and economies and scale. We already operate a successful cluster in Birmingham where we have five villages and 1,152 apartments.’


Abbeyfield’s results and ExtraCare expands



Significant Transactions

Date Target Sub Sector Acquirer EV (£M) Valuation Comments

EV/Revenue

EV/EBITDAR

EV/EBITDA

Oct-17 Bupa care homes Care homes Advinia- - - -

22 care homes (2,714 beds). Advinia is undergoing a period of growth and this acquisition will expand its portfolio from 16 to 38 homes across the UK with 3,250 beds, with plans to invest and develop further.

Oct-17 Retirement Villages Group

Housing with Care

AXA Investment Managers

- - - -

14 retirement properties (402 beds). The Retirement Villages brand will be retained and operated autonomously, while the care element of the portfolio will be operated by HC-One Ltd, a provider of health and social care, under new 25-year leases.

Aug-17 Tunstall Group (49.9% stake)

Telecare & Telehealth

Tunstall Group (Senior Lenders) - - - -

Charterhouse Capital Partners, the main investor in Tunstall Group will now have a 50.1% controlling stake in the company.

Aug-17 Bupa care homes Care homes HC-One

300.0 - - -

122 residential & nursing care homes. HC-One will expand to around 350 homes & 22,000 beds through the deal. Bupa will retain around 150 care homes and six Richmond Villages caring for over 9,000 residents, with a further four care homes and two retirement villages under construction.

Jul-17 Kisimul Childrens services

Antin Infrastructure Partners 200.0 4.0x 11.8x 11.8x

In 2011, Rothschild had acquired Kisimul from Bowmark Capital LLP, in a management buyout transaction. Kisimul reported revenues of £38.29m and net profit of £7.45m in 2015.

Apr-17 The Badby Group Mental Health

Elysium Healthcare- - - -

4 facilities across the country (316 beds). This move takes Elysium to 26 operational sites in England and Wales.

Mar-17 Freeholds of Minster Group's care home portfolio

Care homes Impact Healthcare REIT

148.0 5.3x - -

56 residential homes (2,479 beds). Net initial yield of 7.7%. Price per bed £64,941.

Feb-17 Raphael Healthcare

Mental Health


22 sites across the UK. The deal is the first acquisition by Elysium, which was formed last year by the merger of Partnerships in Care and Priory Group.

Jan-17 Helen McArdle Care

Care homes HC-One- - - -

20 care homes (1,343 beds). The acquisition on 10 January involves 19 existing care homes and another care home currently under construction, as well as the ‘At Home’ business which offers homecare in the Newcastle upon Tyne area.

Dec-16 Cambian adult services business

Adult specialist care

UHS (Cygnet Health Care) 377.0 2.9x - 15.6x

81 behavioural facilities (1,193 beds). Price per bed £316,010. The CMA has also mandated a divestiture of one of four sites: the Limes, Sherwood House, Storthfield House or Derby.

Sep-16 Exemplar Health Care


Agilitas Private Equity

150.0* 2.7x 8.5x 19.7x

26 specialist nursing homes. Agilitas completed an MBO of Exemplar, which is based in Rotherham. They operate 26 high quality, purpose-built specialist nursing homes, providing more than 700 beds across Yorkshire, Humberside, the Midlands and the North West.

Aug-16 Akari Care Care homes Carlyle45.5 19.3x - -

38 residential care homes. Akari Care reported losses of £12.6m (€14.9m) and net liabilities of £172.7m for the financial year ending 31 October 2014.

Aug-16 Acorn Care Childrens services

National Fostering Agency 220.0 1.8x 9.4x 10.0x

High quality children’s services provider. While NFA and Acorn will continue to focus on their individual operations, the combined organisation will be responsible for 5.8% of looked after children placements nationally.

Other Transactions

Oct-17 Focused Healthcare

Adult specialist care and Children’s services

Voyage Care

- - - -

The two companies provide complementary specialist care and support services, with FHL focusing on providing specialist care to children and Voyage Care predominantly supporting adults.

Sep-17 Witherslack Childrens services

Charme Capital Partners

- - - -

Currently operates 29 schools, associated homes and integrated learning centres across the UK.

Aug-17 Lighthouse Healthcare

Mental health services


11 services across the Midlands & Wales. Elysium Healthcare was launched in November 2016 and now has 40 sites.

Jul-17 Swanton Care & Community


Apposite Capital

- - - -

Swanton operates 24 specialist residential care homes, providing 259 registered beds across the UK. The company generated revenues of £25m in the year end 31 December 2016.

Jul-17 Constance Care Homecare City & County Healthcare - - - -

Family-run Scottish domiciliary care business. Constance Care employs more than 400 staff who provide 11,000 hours of care per week to around 1,200 individuals, principally under local authority contracts.

Jul-17 Inspired Villages Homecare Legal & General40.0 - - -

300 retirement village apartments. L&G is looking for further development sites of around ten acres. L&G aims to build over 3,000 homes for older people over the next five years.

Jul-17 Adelphi Care Services


Regard- - - -

Adults with Learning Difficulties, Autism, Asperger's, Behaviours. The deal will bring the capacity of the group to circa 1,150 beds and adds £1.5m EBITDA to the business.

Jun-17 Orbis Education & Care

Childrens services

August Equity28.0 - - -

Seven specialist facilities in Wales. Sold via Garrison Barclay Equity to Cardiff-based August Equity in a deal worth £28m Orbis will continue to be run by its current team.

Major transactions in UK social care

Intelligence tables


Jun-17 Dolphin Homes Childrens services

Business Growth Fund (BGT) 3.85 - - -

12 care homes in Southern England. The invested funds will be used for the provision of two new care homes in Hampshire, as well as investing further into Dolphin’s existing homes.

Jun-17 Embrace Supported living services

Sanctuary

- - - -

35 residential care homes (1,650 beds). The homes, which are largely in Scotland and the North East, will dovetail with Sanctuary’s 68 existing care homes. The 35 care homes will bring the total number of bed spaces provided by Sanctuary Group to over 5,300.

Jun-17 Selborne Care Supported living services

CareTech

16.9 1.3x 7.4x 8.4x

Eight freehold sites (57 residential beds). Selborne’s net assets on a debt-free, cash-free basis at 31 August 2016 were £13.4m. The acquisition includes freehold properties carried in Selborne's balance sheet valued at £12.4m. Price per bed 296,491.

Jun-17 Homes 2 Inspire Childrens services

Prospects

11.4 - - -

18 homes with more than 80 young people . The homes provide care and education services to more than 80 young people aged 10-17 in Nottingham, Northamptonshire, Oxfordshire, Bedfordshire and Worcestershire, as part of a number of agreements with local authorities.

May-17 Gold Care Homes Care homes Omega Healthcare Investors 90.0 - - -

Sale & leaseback transacation involving 18 care homes. This is Omega's second care home deal in the United Kingdom, and it now owns 53 such facilities.

May-17 5 supported living properties

Supported living services

Civitas Social Housing 6.1 - - -

51 tenancies, in North East England. The portfolio was funded through the company’s cash resources.

May-17 LNT Care Development

Care homes Sanctuary

- - - -

Three care homes (186 beds). The homes, which will be built in Pensby in Merseyside, Nantwich in Cheshire and Devizes in Wiltshire, are ‘turnkey’ properties, which means Sanctuary will take on ownership and management once they are built and fitted out.

May-17 Four Seasons Care homes Hill Care- - - -

Six purpose built care homes (260 beds). The sale increases Hill Care’s portfolio to 25 homes and 1,200 beds.

Apr-17 Pathways Care & Modus Care

Adult specialist care & Childrens services

Salutem Healthcare

- - - -

Merger will create 55 care homes supporting 400+ individuals nationwide. Together the two companies (Pathways Group and Modus Care Group) will create a market leading specialist healthcare group.

Apr-17 Jade Country Care Care home Benslow Management - - - -

43 registered beds. Benslow Management will now own and operate the five Gables Nursing Homes in Kettering, Northamptonshire.

Apr-17 Housing & Care 21 Homecare Ark Healthcare- - - -

11 homecare branches across England. The acquisition reinforces Ark’s long-term commitment to delivering the highest quality care to its customers.

Apr-17 Amberleigh Care Childrens services

Amberleigh Management - - - -

Management buy out. The company was owned by Pat Pritz and Christine Smith, who held 66% of the company between them.

Apr-17 Prestige Nursing + Care

Home care Sodexo25.0 - - -

Provides services in people’s homes via 44 branches. Through its 44 branch network, Prestige Nursing + Care delivers high-quality, personalized home care to seniors across the UK focusing on a private-pay model.

Mar-17 CLS Care Care homes Minster Care 25.0 (guide price)

- - -18 care homes (683 beds). Minster Care previously bought ten care homes from CLS in Wigan and Leigh in 2014. Price per bed £36,603.

Mar-17 New Reflexions Childrens services

Bridges Evergreen- - - -

Multi-million-pound investment. New Reflexions, which is based near Shrewsbury, but has 22 care homes across the country, has a national reputation for providing outstanding care to vulnerable and challenging children.

Mar-17 2 Care Homes Care homes Target Healthcare REIT - - - -

Two purpose built care homes (70 bedrooms). Acorn Lodge has 26 bedrooms with en-suite wetrooms, while Oakdene has been extended to accommodate 44 bedrooms.

Mar-17 MITIE healthcare division (Enara and Complete Care)

Homecare Apposite Capital

(9.45) - - -

Mitie will pay £9.45m towards losses and costs. Prior to the deal, Mitie revealed that it had been losing more than £1m a month in its social care division.

Feb-17 LRH Homes Care homes St Cloud Care, backed by Golden House (Israel) and Ravad (Israel)

70.0 - - -

LRH's final 13 Care Homes. The transaction increases the size of the combined care home group to 19.

Feb-17 Highlea Homes Care home National Care

- - - -

65 tenants in 13 properties. Highlea Homes, which provides accommodation and for people with disabilities, has been snapped up by National Care Group Ltd in the eight-figure deal.

Jan-17 Embrace Supported living services

Tracscare - - - - Six supported living services and an ABI unit. Embrace and Tracscare have chosen to work together on this transfer, as Tracscare has over 25 years of experience in this specialist area, and is ideally placed to ensure the services continue to thrive in the future.

Major transactions in UK social care

Date Target Sub Sector Acquirer EV (£M) Valuation Comments

EV/Revenue

EV/EBITDAR

EV/EBITDA

Other Transactions (cont.)

56 | NOVEMBER 2017 | CM - LaingBuisson - LaingBuisson

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You know what’s best for your business, such as a bank that understands your sector inside out. As a Barclays client, we can offer your business a dedicated, sector-specific Relationship Director with in-depth knowledge of your market.

Contact Paul Birley, Head of Healthcare, on 07775 546 435* or [email protected],or visit barclayscorporate.com.

To think outside the boundaries, we operate inside the healthcare sector

*Please note: this is a mobile phone number and calls will be charged in accordance with your usual tariff.Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP.


laingbuissonnews.com | OCTOBER 2017 | 57

-5%

0%

5%

10%

15%

20%

25%

%FTSE100 %CM %HM %Other %FTSE250

CM CareMarkets ACADIA HEALTHCARE, AMBEA, ATTENDO, CAMBIAN GROUP, CAPITA, CARETECH HOLDINGS, KORIAN, LE NOBEL AGE, MEARS GROUP, ORPEA, SERCO, UNIVERSAL HEALTH SERVICES, MCCARTHY & STONE, HUMANA AB, MATERNUS-KLINIKENHM HealthcareMarkets CAPIO, CRANEWARE, EMIS, GEORGIA HEALTHCARE GROUP, INTEGRATED DIAGNOSTICS HOLDINGS, MEDICA GROUP, MEDICLINIC INTERNATIONAL, MEDICOVER AB, NMC HEALTH, RAMSAY HEALTH CARE, RHOEN-KLINIKUM, SPIRE HEALTHCARE GROUP, UDG HEALTHCARE, DEDICARE AB, GHP SPECIALTY CARE AB, PIHLAJALINNA OYJ, LUZ SAÚDE, FEELGOOD SVENSKA AB (EXCLUDING FRESENIUS MEDICAL CARE, FRESENIUS SE & CO)OTHER ASSURA, CIVITAS SOCIAL HOUSING, CVS GROUP, DIGNITY, HEALTH ITALIA, IMPACT HEALTHCARE REIT, PRIMARY HEALTH PROPERTIES, TARGET HEALTHCARE REITDATA CORRECT AS OF 2 NOVEMBER 2017

Health and Care returns against FTSE

You know what’s best for your business, such as a bank that understands your sector inside out. As a Barclays client, we can offer your business a dedicated, sector-specific Relationship Director with in-depth knowledge of your market.

Contact Paul Birley, Head of Healthcare, on 07775 546 435* or [email protected],or visit barclayscorporate.com.

To think outside the boundaries, we operate inside the healthcare sector

*Please note: this is a mobile phone number and calls will be charged in accordance with your usual tariff.Barclays is a trading name of Barclays Bank PLC and its subsidiaries. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered number is 1026167 with registered office at 1 Churchill Place, London E14 5HP.


Intelligence tables

L O N D O N ’ S F I R S T L U X U R Y R E T I R E M E N T C O M M U N I T Y

At Battersea Place, every detail has been carefully considered to ensure you can enjoy a safe, secure and independent life – where you can socialise as much or as little as you choose. With

a concierge service, high-class restaurant, swimming pool and private cinema, it’s easy to forget that Chelsea – with its theatres and restaurants – is only a fi ve minute chauffeur drive away.

Our unrivalled care teams are able to provide 24/7 domiciliary care should you require it, along with the comfort of our onsite nursing facility in the Albert Suites.

Call us on 020 7228 6939 or visit www.batterseaplace.co.uk

A N I N D E P E N D E N T L I F E S T Y L EI N T H E C O M P A N Y O F

E X C E P T I O N A L F R I E N D S

B A T T E R S E A P L A C E , 7 3 A L B E R T B R I D G E R O A D , L O N D O N , S W 1 1 4 D S

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Major UK providers of long term care1

November 2017

sponsored by

Provider # Care Homes

# Care Home beds Year end Revenue

£m PBT £m EBITDAR £m

EBITDAR as % of revenue

Total net assets £m

Bupa Care Homes2 280 20,469 n/a n/a n/a n/a n/a n/a

Four Seasons Health Care 370 19,261 Dec 2016 686.2 (83.5) 108.0 15.7 (521.9)

HC-One 2 239 12,904 Sep 2016 298.1 (3.5) 49.5 16.6 30.7

Barchester Healthcare 194 12,631 Dec 2016 563.9 3.7 162.7 28.9 112.0

Care UK 114 7,634 Sep 2016 597.2 (72.4) 71.4 12.0 (422.5)

Anchor 121 6,069 Mar 2016 367.3 10.9 86.3 23.5 298.6

Maria Mallaband & Countrywide 82 4,738 n/a n/a n/a n/a n/a n/a

Methodist Homes 89 4,697 Mar 2017 207.2 12.3 30.9 14.9 253.5

Runwood Homes 70 4,693 Sep 2016 117.4 8.3 6.9 5.9 159.6

Priory Adult Care (fka Amore) 266 4,630 Dec 2016 823.8 (175.2) 202.8 24.6 555.6

Avery Healthcare 53 4,041 Mar 2016 126.0 (18.8) 42.5 33.7 (15.0)

Sanctuary Care 90 3,822 Mar 2016 90.0 9.8 9.8 10.9 0.0

Caring Homes 123 3,687 Mar 2016 161.5 1.4 34.8 21.5 111.7

Orders of St John Care Trust 70 3,636 Mar 2016 110.6 5.0 12.4 11.2 46.1

Orchard Care Homes 56 3,070 Mar 2015 125.4 2.1 14.5 11.5 1.8

Larchwood Care 57 2,981 n/a n/a n/a n/a n/a n/a

Minster Care 59 2,616 Mar 2016 27.9 3.5 6.2 22.4 11.9

Sunrise Senior Living 25 2,541 n/a n/a n/a n/a n/a n/a

Abbeyfield Society 77 2,341 Mar 2017 54.3 8.6 12.1 22.3 148.3

Excelcare 33 2,187 Mar 2016 20.3 1.8 4.8 23.6 (7.9)

Embrace 48 2,142 Jun 2016 107.5 (22.4) 9.8 9.2 (20.5)

Shaw healthcare 52 2,113 Mar 2017 93.0 4.1 12.4 13.3 13.8

Voyage Care 263 2,104 Mar 2017 213.0 (9.6) 41.9 19.7 (46.4)

Akari Care 40 2,067 Oct 2016 46.3 221.1 5.3 11.4 14.8

Leonard Cheshire Disability 100 1,917 Mar 2016 159.2 2.6 (1.7) (1.1) 114.2

Healthcare Homes 35 1,845 Sep 2016 66.7 0.7 13.1 19.7 11.2

PrimeLife 50 1,801 Mar 2017 51.4 3.8 9.5 18.6 8.6

Quantum Care 26 1,581 Mar 2016 53.5 0.5 6.0 11.3 1.8

Somerset Care 28 1,523 Mar 2016 72.7 1.1 7.6 10.5 13.2

Bondcare 23 1,430 n/a n/a n/a n/a n/a n/a

Community Integrated Care 77 1,364 Mar 2016 107.0 1.1 5.4 5.0 48.1

Gracewell Healthcare 20 1,348 n/a n/a n/a n/a n/a n/a

B & M Care 25 1,308 Sep 2016 41.7 10.4 11.2 26.8 57.3

Hill Care 24 1,283 Mar 2016 7.1 0.4 1.1 15.8 1.8

Abbey Healthcare 16 1,269 n/a n/a n/a n/a n/a n/a

Country Court Care Homes 26 1,236 Mar 2016 9.6 (0.6) 0.5 4.9 7.4

Select Healthcare 31 1,231 Mar 2016 20.7 38.8 7.7 37.3 36.7

Gold Care Homes 21 1,210 Mar 2016 27.2 0.8 5.0 18.5 28.0

Hallmark Care Homes 16 1,194 Mar 2016 52.8 7.1 12.0 22.7 38.6

CareTech Community Services 140 1,169 Sep 2016 149.0 22.5 44.9 30.1 151.7

Meallmore 22 1,149 Mar 2016 39.9 3.3 7.5 18.8 11.9

St Cloud Care 19 1,139 Dec 2016 13.0 2.8 3.6 27.6 1.6

Royal Masonic Benevolent Institution Care Company 18 1,111 Mar 2017 49.2 2.3 (4.7) (9.5) 123.4

Kingsley Healthcare 29 1,105 Sep 2016 11.2 1.2 3.2 28.9 1.8

NOTES 1 NUMBER OF REGISTERED CARE HOMES AND BEDS OWNED/LEASED BY INDEPENDENT SECTOR. 2 PENDING CMA APPROVAL OF ACQUISITION OF 122 BUPA HOMES BY HC-ONE AND 22 BUPA HOMES BY ADVINIA HEALTH CARE

L O N D O N ’ S F I R S T L U X U R Y R E T I R E M E N T C O M M U N I T Y

At Battersea Place, every detail has been carefully considered to ensure you can enjoy a safe, secure and independent life – where you can socialise as much or as little as you choose. With

a concierge service, high-class restaurant, swimming pool and private cinema, it’s easy to forget that Chelsea – with its theatres and restaurants – is only a fi ve minute chauffeur drive away.

Our unrivalled care teams are able to provide 24/7 domiciliary care should you require it, along with the comfort of our onsite nursing facility in the Albert Suites.

Call us on 020 7228 6939 or visit www.batterseaplace.co.uk

A N I N D E P E N D E N T L I F E S T Y L EI N T H E C O M P A N Y O F

E X C E P T I O N A L F R I E N D S

B A T T E R S E A P L A C E , 7 3 A L B E R T B R I D G E R O A D , L O N D O N , S W 1 1 4 D S

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60 | MONTH YEAR | CM - LaingBuissonlaingbuissonnews.com | October 2017 | 1laingbuissonnews.com | October 2017 | 1

Chosen provider of independent sector healthcare market data to the ONS

“This is a time of immense change and opportunity in healthcare driven by substantial market,

economic and policy challenges”

• Market Intelligence• Consulting• Data Solutions

Health and social care

Stephen Dorrell Chairman, LaingBuisson

laingbuisson.com LaingBuisson @LaingBuisson

laingbuissonnews.com | MONTH YEAR | 61

Inleadership

Leading the battleTim Barsby How would you describe your leadership style?Peter Battle It is giving people responsibility and plenty of autonomy, empowering them, supporting them, but cognisant there is a line where if things aren’t delivered then the focus comes on and you have to try a different tack. My preference is always for people to grow and learn and develop and to be supported rather than having to be looking over their shoulder. I don’t think that is healthy, but sometimes it is necessary. Each person needs their own bespoke approach to get the best out of them. TB So what does effective leadership look like in the health and social care sector and is high quality leadership more important here than in other sectors? PB Everything comes down to quality. The first thing we talk about in the Board is quality. The first thing we talk about in Exco, which is our group underneath the Board, is quality. So effective leadership must mean your quality is constantly improving, I see it as an entirely fluid, ongoing challenge. You live and die by that and nothing else really matters. TB Is high quality leadership more important here than in other sectors? PB We are not making widgets, we are looking after a large number of vulnerable adults that have a variety of complex challenges. We are doing everything to ensure they live as fulfilled a life as possible. I would argue it is more important in this sector because of what we are doing. With better communication and some oiling of the wheels between health and social care, we can do even more for those people that are stuck in hospitals that should be being supported in the community in a house like you or I. That has to be the sector’s aspiration as the best outcome for the people supported and let’s not forget the public purse also. TB And how do you communicate the company’s core values to your employees and encourage them to engage in a meaningful way?

PB I’m a big believer in leading by example, and cascading this throughout the business – it is what makes our culture so special. There are lots of open forums. Within a home there is an open forum with the home manager, there is an open forum for the home managers with their ops managers. There is an open forum with the ops managers with the director group. As a senior team there is an open forum, the rest of the senior team and I will go into homes on a regular basis so there is a direct dialogue between support workers and all of us. Our chairman will go into our homes and attend various meetings. From home to the Board there is a very open, transparent two-way street of communication and people feel they are able to raise whatever they need to and they will be listened to. TB When have you made a commercial mistake, what did you do, how did you rectify it and how can we all learn from it? PB I have made some hiring errors. I think it is just learning from those. Gone are the days where you can

just reference people through written references. I’m a Governor of a local primary school and we have just been reviewing their recruitment policy and my one edit was you have to speak to the people who provide the references. Nowadays agreed upon compromises are so prevalent that it is a minefield. I’d much rather hire someone I have worked with before or someone in the team has worked with before who are a known quantity. TB What piece of advice would you give yourself on your first day in healthcare? PB That is a really tough question. It is a similar answer to one of my earlier ones but it would be the importance of referencing and just getting recruitment right. We have got it right now but it has been a bit of a journey given what we’ve undertaken - building a platform for growth while professionalising the business, investing in L&D and the staff team, materially growing occupancy, bolting on some excellent acquisitions, adding new developments – and most importantly, providing fulfilment to people, while having a lot of fun.

Chief executive of Tracscare Peter Battle tells Tim Barsby of Carter Schwartz about his leadership style

Peter Battle, chief executive, Tracscare

62 | MONTH YEAR | CM - LaingBuisson

Inpost

native country of New Zea-land earlier in the year after successfully spearheading the development of London’s first retirement village, Bat-tersea Place.

Anchor chief executive Jane Ashcroft was re-elected as ARCO vice-chair at its AGM.

Sanderson said: ‘ARCO has championed the ap-proach of providing retire-ment housing combined with care and additional facilities, and its members set the standard for the industry. Audley, as a founder mem-ber, has been involved since the start, so I am thrilled to have been elected chair as the organisation continues to grow its influence.

‘The retirement housing sector is today faced with an unprecedented opportunity, although one not without its challenges. I look forward to working with the ARCO

ARCO chairChief executive and found-er of Audley Retirement Villages Nick Sanderson was elected chair of the Associ-ated Retirement Community Operators (ARCO) board of directors.

He takes over the role from Richard Davis, the former chief executive of LifeCare Residences, who took up a new post in his

team and all members to increase the supply of retire-ment communities that meet the housing and care needs of our ageing population.’

ElysiumElysium Healthcare has appointed Professor Nick Alderman as clinical director of Neurobehavioural Rehabil-itation Services.

Formerly with Priory Healthcare, he will now head up Elysium’s neurological services division which has operations across the UK. He has also held senior posts at the Brain Injury Rehabilita-tion Trust and the National Brain Injury Centre (Kemsley Unit) and St Andrew’s Hos-pital, Northampton.

Knight Frank has recruited Mark Tyler as a partner within its healthcare team and Kimishka Naidoo as an analyst. Tyler was previously a director at Colliers International while Naidoo joins from GVA.

Knight Frank

Trevor Brocklebank, found-er of Home Instead Senior Care, has been appointed chair of the UK Homecare Association (UKHCA), replacing Mike Padgham, who is stepping down after 11 years.

Brocklebank, who has previously served as treas-urer and vice-chair, will lead the board while they explore options around appointing and independent chair.

Jane Townson, chief executive of Somerset Care, is now UKHCA’s vice chair and Dominique Kent of The Good Care Group and Richard Walker of Optimo Care Group were re-elected as honorary Secretary and treasurer of the Association respectively.

David Chalk of Windrush

Brocklebank to chair UKHCA

Care Ltd, Gloucestershire, Lynn James of Carebridge Staffing Ltd, Kent, Gavin Stedman-Bryce, Beyond Homecare, East Lothian, were also elected to the board as non-executive directors.

Val McNab of Border Caring Services, Selkirk, and Claude Suppiah, of ANA Nursing, Edg-ware, stepped down as board members.

Brocklebank said: ‘UKHCA’s Board extends our thanks to Mike, Val and Claude for their immense contribution to the Association’s work and wishes them well for the future. We are indebted particularly to Mike for his leadership in the sector for over a decade.

‘Our new board members join at a turbulent time for most of the homecare sector.’

Trevor Brocklebank is the new chair of UKHCA

Nick Sandersonchair of ARCO

laingbuissonnews.com | MONTH YEAR | 63

SUPPORTING YOU IN SUPPORTING OTHERS

hays.co.uk/socialcare

With the largest UK network of offices dedicated to social care recruitment and our trusted partnerships with adult and children’s residential services, private sector care homes, voluntary and charitable organisations and local authorities, we’re best placed to find you your next social care job.

Our extensive team of experienced consultants can advise you on the next steps in your career and the latest opportunities as they arise.

You will have access to on-going career consultations and market-leading, face-to-face CPD training to support your development. We also offer you a full range of online training to keep your skills up to date.

For more information about how we can help or for the latest social care opportunities, visit us online. Alternatively, to find your nearest Hays Social Care office visit hays.co.uk/offices

SC-21573_Care_Markets_28_04_17 v2.indd 1 28/04/2017 13:34

READY.Our strength is we provide a first class service to an outstanding healthcare base. The team are poised to rise to every challenge on behalf of our healthcare clients.

Advising on healthcare assets of over £8BN a year, we are ideally placed to help clients understand the market as it stands now and importantly how it will look in the future.

CONTACTJulian Evans FRICST: +44 20 7861 1147E: [email protected]

Knightfrank.co.uk

CT1530 Healthcare_generic_advert_FINAL.indd 3 28/09/2016 17:31

Documents

November 2017 | Volume 25 | Issue 7 CareMarkets...many providers and their tenants, within the welfare system. Long-term supported housing will also remain funded via the welfare system,