Care home market remains ‘fragile’
Tuesday, 29 July 2014
A new report from the Institute of Public Care (IPC) shows that significant problems continue for the care home market - three years on from the collapse of Southern Cross.
the wake of the demise of Southern Cross in 2011, and following the development
of the Market Oversight regime in the Care Act, the Care Quality Commission
(CQC) has published a major IPC report which reviews the state of the care market
which is part of Oxford Brookes University, found that recruiting a trained and
well paid workforce is likely to be a major issue for the future, and that the
older persons’ care market continues to be fragile.
report notes that “very few of the providers and financial advisors we
interviewed ruled out the possibility of another Southern Cross style crisis.”
and the management of debt, remains a critical issue for a number of the
larger care providers. Equally, a rise in property values alongside demands of
regulation and lower levels of Local Authority funding may persuade some
smaller care home providers to cash in their assets and leave the market.
the Care Act itself which whilst welcomed by most providers, still creates a
level of uncertainty in the market particularly between those who self-fund
their care and those in receipt of state funded care.
report suggest that the most likely characteristics of provider failure is that
of a large care home provider which does not own the properties in which they
operate, and where they have a concentration of homes in a limited number of
authorities in less affluent areas.
Andrew Kerslake, IPC Associate Director and co-author of the report, commented:
“We are now three years on from the Southern Cross financial collapse which put
at risk over 30,000 older people under its care. Unfortunately our report shows
that the Care Market remains fragile and the management of debt remains a very
have made a number of recommendations to the CQC which we hope will ensure that
there is an improved market oversight and help to reduce the risk of a further
a collapse on the scale of Southern Cross from happening again.”
The IPC recommends that CQC be
- The mere fact of identifying a provider as being
at risk may itself weaken their financial position.
- The data CQC receives from its inspections needs
to be fed into its intelligence capability in order to inform its Market
- The development of the wider market intelligence
role is an important precursor to the market oversight regime and as a part of
CQC strengthening its role in the care sector.
copy of the report is available to read on the CQC website. Further information is available on the IPC website.