20 May 2016
With the recent ’eyebrow-raising’ suggestion1 from the UK’s Health Secretary Jeremy Hunt that the current care home industry downturn is one of the biggest commercial opportunities for private firms, comes the realisation that it’s also a gilt-edged opportunity for private individuals.
But, before looking at any moves to invest hard-earned cash in this ‘struggling’ industry, it’s best to look at exactly why UK care homes are in such a mess.
It’s all down to bad management.
With the demise of assured central-local authority funding propping-up the care home sector industry, the introduction of the living wage and stricter regulations, many private operators have found it ‘challenging’ keeping their doors open to patients other than those with the means to pay for care themselves.
Worrying in its implications of what this might mean for the ‘poor’ in our society, this is something that will have to be addressed by successive governments if the complete breakdown of the adult care system is to be avoided.
On the issue of those with the means - be it through private savings, equity release after downsizing a home - the opportunity is there, not only to safeguard their own future care, but also others.
By buying into the industry and investing in one or a number of purpose-built care homes suites, the savvy investor will not only be investing in one of the biggest markets, elderly care, but also be part of an ethical move to turn the sector around making it profitable - and of course sustainable for future generations.
The statistics of future elderly needs (from Age UK2) speak for themselves.
The concern is that, faced with these dramatic statistics, current care homes places are being reduced as rapidly as the population needing them is increasing.
The Health Secretary said that although the situation in the industry was "very concerning … ”, he expected "many" private firms would be willing to fill in - because they see the potential for profit.
"If there are people who are exiting the market because they don't like the much greater scrutiny over standards of care, then that's their choice - but I think it's the right thing for us as a society.
"At the same time I would also say that in many parts of the world businesses, because many of these organisations are private businesses, are looking at the ageing population as one of the biggest commercial opportunities.
"Because this is an area that all of us are going to spend much more money on as time goes on, both for our own care and those of our loved ones.
"So it's important not to take a short-sighted approach as to the opportunities in that market.
"This is a section of the economy going forward where were are going to be spending more and more money, both publicly and privately."
2 Age UK - Later Life in the United Kingdom (May 2016)