Is the care business doomed?

Hardly an hour, let alone a day, goes past without another commentator expressing gloom on the economy - property prices slumping, living costs rocketing, stock markets falling, oil prices fluctuating, sterling doing badly against worldwide currencies......but haven't we been here before?

The Bank of England Base rate has been held at the current 5% since April 2008. Looking back to October 1989, it was 15%, falling back to 14% upon the UK's joining of The European Exchange Rate Mechanism 12 months later.  Understandably the market began to cool as those owners on fixed interest rates became concerned as to the long-term viability of their businesses. The advent of Care in the Community in 1993 cooled demand further for a while and brave souls who had both bought and/or negotiated fixed interest rates prior to its dawning were faced with a worrying future. Preserved Rights for those in residential care before April 1993 guaranteed fees for that group, but this was phased out by April 2002. Current news of the issues facing a couple of the major corporate care providers has also recently emerged into the public domain, providing commentators with more ammunition to spread gloom on the market.

But in all this, we need to remember......

Life expectancy improves year on year and now with an ageing population the demand for care has increased over that in the latter part of the last century. The method of funding this increased demand is something to address on another occasion.

The care business mirrors the hospitality industry in many ways in terms of service and accommodation expectations. However, it is not always the homes that are the most modern in terms of facilities and décor that are the best in terms of care.

Provided they are fit and healthy, to-day's elderly in their 80's are yesterday's 60 year olds and for this group, demand is growing for more independent living units where residents retain their independence but can be sure in the knowledge assistance is to hand as and when required, either virtually or in the form of a warden. Potential isolation is generally overcome by the availability of some communal space.

Care at the other end of the age spectrum is also changing, with the demand for places for children and young adults ever on the increase. As with the older population, care for this sector has shifted from family and local authority provision to the private sector and consumer expectations have heightened.

Whilst sales are being transacted in the current climate, Banks are undoubtedbly being more cautious in their attitude to lending. However, we have contacts with a very experienced firm of brokers who in turn have the established contacts to provide funding in even the most complex cases.

In many respects, the care business is certainly not doomed, but the provision has to adapt to suit the changing market.