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Austerity measures have created a two-tier long term care market - latest research shows

30 September 2015

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 September 30, 2015
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UK long term care for older people is a highly polarised marketplace where at one end those operators with a focus on private pay residents are doing relatively well, while at the opposite end those which cater mainly for government supported residents face becoming the latest financial failures in a sector which is already suffering from a greater annual capacity loss rate than growth rate.

Research published today in the latest edition of LaingBuisson’s Care of Older People market report has revealed that real terms fee reductions by local authorities, a result of the government’s on-going austerity drive, is now clearly the main driver for falling profits in a service provision market worth an estimated £16 billion per year.

With 90% of residential and nursing care services now delivered by independent providers, the report states that more than ever before there is strong evidence of a marketplace where profits can only be made by those operators focusing on self-pay residents in affluent areas of the country. Meanwhile, those homes catering mainly for publicly paid residents in non-affluent areas could be approaching breaking point.

To find out more about this highly volatile slice of the UK healthcare market, follow the links below where you can download a brochure and contents pages and order online for instant access.

Laing Buisson’s unrivalled study on the UK’s care market for older people is relied on by investors, operators, central and local government officials and professionals within the advisory community for its hard facts and dispassionate analysis.

The big news this year has been postponement of Phase 2 of the Care Act. Providers and commissioners alike will have heaved a collective sigh of relief because of the very real risks of market destabilisation that implementation would have brought (as described in last year’s edition) without a great deal more prior preparation.

But one challenge has been replaced by another, potentially of even greater magnitude, in the form of the National Living Wage (NLW).

While no-one begrudges more money for hard working, lower paid employees, the other side of the coin is that care service operators with a high exposure to public pay are looking into an abyss if central government fails to fund local authorities to pay for the additional cost of NLW, especially in the context of a 6% real terms fall in council paid care home fees in the last five years and a decline in operating profit margins to truly worrying levels.

This fully updated and revised edition of the well-respected Care of Older People UK Market Report uses proprietary data available only to LaingBuisson to analyse market trends and describe what in the analysts’ view is the most likely scenario for the medium term future for both the public pay and private pay segments of the market.

LaingBuisson’s report provides the only independent, authoritative, comprehensive and up to date assessment of the present state and future prospects of the long term care market in the UK.

As such it is essential reading for independent providers, care commissioners, regulators and policy makers as well as those people in the investment sector with an interest in this massive marketplace.

 

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