Looking back to 2020 and into 2021, I hope that the more positive news and the start of the vaccine roll out provides a more positive impetus for many. Through strong risk governance and resilience many businesses will have learnt from 2020 and seek to rebuild and continue innovation into the ‘Build Back Better Britain.’
The changing market conditions brought upon us by the pandemic clearly shifted consumer trends with staffing constraints affecting the entire sector. This was seen in the care sector by reduced referrals and enquiries for care home admissions, with an uptake in live-in care and supported living.
2020 has seen increasing staffing costs and businesses stretched whilst coping with staff in isolation, shielding, and helping to look after family members. With rising insurance costs, IPC costs, and other overheads, investment in real time financial recording continues alongside an accelerated move to digital care planning, Emar and administration control. This all aids the running of a more efficient business, able to look forward, with strengthened governance.
The initial PPE challenges have now been resolved, with the care sector able to maintain a continuous moving stockpile. With enhanced infection control and new facilities, in part financially assisted with the IPC grants, the sector stands ready for further pandemic waves should they happen.
As a result of Covid-19 the design of existing facilities and new care homes are reinforcing the need to update and refurbish, looking at larger rooms for social distancing, wet rooms, additional storage space, larger corridors, visitor pods and increased landscaping for outdoor areas.
On the upside, care home occupancy is starting to rise in some areas, including respite care for medical reasons, nursing and dementia services, with respite care continuing to be offered if an individual is on a waiting list for care at home. 2020 has made more informal caring easier, with family members able to form bubbles, made possible with sectors enabling work from home (where possible during the lockdowns and stricter tiers). The availability of these unpaid carers is likely to come under pressure in 2021 as employees are encouraged to gradually return to the workplace in some form. Demand for care homes and supporting living at home will therefore no doubt start to return to pre pandemic levels, which I consider is likely to happen within approximately 12 months.
In 2021 we are expecting to see an upturn in sales and acquisitions in the care market as pent up demand returns to the table. The pandemic has resulted in increased financial due diligence and this is expected to continue. If you’re looking to exit, it is advisable to look at the current business structure and decide whether it is fit for purpose prior to going to market. On the other hand if, as a provider, you are seeking to grow your service, looking at the business structure in what will be an evolving tax climate in 2021 is also to be recommended. A business restructure can breathe new life into a business environment, and 2021 could see a resurgence of this.
The retirement village concept continues in its infancy in the UK and over the next decade is expected to grow as the baby boom generation seek to retire and downsize.
A further impact of the pandemic is a strengthening of risk governance and Board resilience and scenario planning, discussing and having evolving plans ready for any scenario. It is recommended that risk and contingency planning are revisited on a monthly basis alongside updated real time cash flow forecasting so that business agility can be actioned at short notice. The availability of multiple supply lines is an example of this. 2020 has given providers the impetus to review staffing structures within a business and to enhance and create roles such as champions and heads of hospitality and testing. Team well-being is another area which continues to be enhanced not only in the care sector but in society as a whole, alongside environmental improvements as we look towards a greener and more sustainable socio-economic society.
As the vaccine roll out brings confidence back to society the demands for the care sector will continue to grow. I have not addressed the sector funding debate in this article, but it is one that will need to be addressed as 2021 unwinds in what will also be a challenging year with light at the end of the tunnel. The pandemic has taught us not to stand still and 2021 will see the sector continue to innovate to address business contingency and sustainability.
This just leaves me to say ‘Merry Christmas’ from the care team at Albert Goodman and we look forward to supporting you in the New Year.