Care of Elderly People UK Market Survey 2009

This new and fully updated edition of Laing & Buisson’s unrivalled market report presents a fully revised and updated analysis of trends in this £21 billion sector of the UK service economy, much of it derived from Laing & Buisson’s own (2009) surveys, unavailable elsewhere.Key issues, facts and figures highlighted in the report include: 2009 figures confirm that care home demand and capacity has passed an ‘inflection point’. A clear shifthas taken place from a declining to a growing market,with the number of independent sector residents projected to rise from 419,000 in 2009 to 424,000 by2014 and to 459,000 by 2019;Private payers share of demand has risen to an estimated 41% share nationally in 2009;Third party top-ups may be more frequent than previously estimated, according to new figures from Laing & Buisson surveys;Private payers’ market share is projected to continue growing in the future as the rate of owner occupation continues to expand amongst the very old population at risk of entering care homes;Occupancy rates dropped to an average 89.8% across all independent sector care homes by March 2009. Major providers such as Southern Cross and BUPA have also reported a decline in occupancy;The national dip in occupancy in 2009 results from capacity expanding slightly faster (2%) than volume ofdemand (1%);Elderly care home closures dropped again in the year to March 2009;In contrast, there was a spurt in new registrations;A falling off in new registrations is projected in the next two years, as the pipeline of projects startedprior to the credit crunch dries up and as new starts are curtailed by constraints on bank lending untilcredit markets return to normal;Fee inflation reported by care homes has slowed down, to an average of 1.9% for nursing care and 3.2%for residential care according to Laing & Buisson surveys for financial year 2009/10;Average margins should not be adversely impacted in 2009/10 since fee inflation is just above the 2–2.5% that Laing & Buisson estimates is needed in 2009/10 to keep pace with care home cost inflation. It is likely that 2010/11 will see a continuation of relatively modest fee and cost increases, with relatively little impact on margins;This may, however, prove to be the calm before the storm. Looking further forward, there is a real riskthat the year 2011/12 will witness below inflation baseline fee increases from local authorities, ascentral government ends its policy of fiscal stimulus, grant support is cut and councils’ financial situationdeteriorates markedly;The Green Paper Shaping the Future of Care Together, published in July 2009 is, unfortunately,silent on the state funding envelope to be available for long term care of older people in the future.Beneath the rhetoric about the need for change, the essential message from the Green Paper is thatfunding of long term care will continue on much the same basis as at present, with no real change in themeans testing of people with assets over £23,000;The care home sector is preparing for a further upheaval in regulatory processes as services are reregistered under new regulations yet to be finalised under the Health and Social Care Act 2008;Reverberations of the global credit crisis continue to impact on the care home sector, though at anoperational level it has not yet impacted on profitability. Care of Elderly People Market Survey 2009 provides the only independent, authoritative, comprehensive and up-to-date assessment of the present state and future prospects of the long term care market in the UK. It is essential reading for providers, investors, commissioners, regulators, researchers and policy makers involved in this sector.