Partner Article

Care home providers to make ‘crucial decisions’

Care home owners in the North West are being warned of the significant difficulties facing the sector and reminded of the strategies employed by successful operators .

Matt Dunham, a partner at the North West office of accountancy and investment management group Smith & Williamson, said care homes were facing crucial decisions in a sector undergoing constant change.

The industry is experiencing growing regulatory requirements, rising payroll costs, public funding restrictions, expectation of improved physical facilities and increasing establishment costs.

Mr Dunham said: “These are all causing a gloomy view of the care home arena in and around the North West, but for care home providers it is not all bad news.

“With the North West* population aged over 65 set to increase by 19% between 2011 to 2021 the already significant demand for care homes will continue to grow.*2

He added: “There is an improving appetite from funders, such as banks and equity houses, for the right business model.

“The key question many providers face is how to deliver a profitable business model that can satisfy the demand, balancing affordable fee levels and mix of private and local authority funding, with appropriate cost control.

Mr Dunham said it was vital care homes keep up to date with constantly changing Care Quality Commission (CQC) requirements, to ensure that ‘good’ or ‘outstanding’ reports are achieved.

He also urged that they:

Develop staff properly to retain them, cut staff turnover and control employment costs Maintain a high proportion of self-funding residents over local authority-funded clients Have a clear business plan for the short and long term, regularly review it and don’t be afraid to question or amend it Keep strong financial control and monitor key performance indicators on a regular basis.

Mr Dunham added: “Whilst care businesses increasingly appear within our financial warning criteria, there is still a very successful care sector.

“Success in the care sector can typically be achieved by implementing the strategies and disciplines as summarised above.

“There is a multitude of issues that care home operators must deal with on a daily basis.

“This often makes it difficult to take the necessary time out to review their business model afresh and implement appropriate changes.

“However, taking the time and having external sources, such as Smith & Williamson, to assist with this is a key strategy to success.”

This was posted in Bdaily's Members' News section by Smith & Williamson .