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Reflections on the market and care- what the future may hold

The Green Templeton College ‘Conversation on Care and the Market’ seminar (3rd June 2015) provided plenty of food for thought on the topic of residential care provision (with some musings on home care and housing). Some refreshingly frank views were discussed by Geoff Hodgson (Editor, Caring Times), Derek Breingan (Clydesdale and Yorkshire Bank plc) and John Jackson (Adult Social Services, Oxfordshire County Council), which made me think about the direction care and housing will take in the future.

Certainly in recent years the government has taken a laissez faire attitude towards the creation of new care homes, letting the market take the lead. As a result, there is a huge bias with the majority of new homes established in the south and in affluent areas- the market follows the money, after all. There are unprecedented levels of investment from private companies in care homes, and only four years on from the Southern Cross crisis and scandal and this doesn’t look like it’s slowing down anytime soon. Clearly an ageing population is good business!

At the moment, there appears to be a three-tier system in residential care in the UK which looks set to become a two-tier system in the not too distant future. The first tier, the ‘luxury market’ care homes are marketed like 5* hotels and generally do not admit residents funded by local authorities. Indeed, no care homes are obliged to admit local authority-funded people, and as local authorities typically pay less than the private rate, there is no incentive for these luxury homes to take on these residents. At the other end of the spectrum are the residential care homes which provide care to local authority-funded people only. In the middle, there are the mid-range homes with a mix of private and LA-funded residents. In the future, I feel there is the distinct possibility that care homes in this middle tier will make a choice: smarten up and go for the solely private market or cut costs and opt for council self-funders (or the smaller homes will disappear entirely as they have done in London where property prices mean selling your care home to property developers in an increasingly attractive prospect).

Where, then, will the self-funders who can’t quite afford the 5* treatment go? John Jackson (Head of Adult Social Services at Oxfordshire County Council) argued they will then look for cheaper alternatives to the luxury residential care options, including extra-care housing. But who will provide the additional extra care housing needed? It’s a relatively new area, where demand out-strips supply. If it’s the market, is there a risk that we will see a mirror of the residential care market, with a dichotomy between luxury extra-care housing and the lower-end for LA-funded residents and those without the means to self-fund their way into a ‘high-end’ place? Or should we be more pessimistic and argue the market, driven by profit, will focus overwhelmingly on those affluent older people who can afford the hotel-style extra care housing? Is this where the charitable sector will step in, to provide affordable extra care housing options? Certainly local authorities with their ever-reducing budgets will find it hard to fill the gaps.

The GTC Care Initiative: Conversation on Care and the Market, 3rd June 2015:


About the Author:

Dr Kate Hamblin is a Senior Research Fellow at the Oxford Institute of Population Ageing. Kate is currently working on a follow-on project examining self-employment for older workers as well as a further collaboration with CIRCLE on a piece of research commissioned by SENSE (the deaf-blind charity) to explore telecare use by individuals with dual-sensory impairment. She is also engaged in a John Fell Fund project exploring the outcomes of the Museum of Oxford’s reminiscence programme and a study examining the work and retirement aspirations of older self-employed people.

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