A local view from Santander

A local view from Santander

As anybody who has worked in the healthcare sector for any length of time will know, the last five years have been a time of immense change. And that’s before the new coalition government came in with a determination to cut back on spending. And while we’re told health budgets should be ring-fenced, protected from the deepest of cuts, even the most optimistic observers accept that more change – and more challenge – is inevitable.

For care home operators, the challenges take several forms. True, there has been expansion in spending on health generally, but the past couple of years have seen ongoing pressure on fees, in part because local authorities have taken the opportunity to change their delivery method from residential care to care in the home through domiciliary care.

At Santander we’ve noticed several trends that have developed in response to that. Firstly, care home operators are starting to specialise into different categories of care, ranging from just the purely personal care of the elderly within the home environment, with a degree of independence retained, to much more specialist, acute care.

In our experience, more care homes are now going down the specialist route in order to attract local authorities and PCT referrals that are now more demanding and discerning in how they spend public money.

And it is fair to assume that we will see an acceleration of the march towards specialism, because obviously there’s a need to develop such specialist beds in response to the needs of referral bodies. That’s a reflection of the change in healthcare provision as well as an acceptance of the pressure on local authority and PCT budgets in the medium term. It also means that operators will need to invest in training of staff, upgrades to existing facilities and perhaps construction of new accommodation. That will need to be financed, something Santander is working very hard on with its clients.

That ties in with the second area of pressure: the continued depression in the housing market. Those running care homes have always paid attention to house prices, since so many residents fund their private care through selling property. And while things aren’t as bad as a year ago, the market is still sluggish.

Naturally all this combined will mean more of the same: change. The changes and pressures of the next few years will test the mettle of operators across the country. And we will be working with our healthcare clients to ensure they have the right financial solutions in place to meet those challenges.

John Ramsay, Regional Director, Anglia, Midlands, South West and Wales, Santander Corporate Banking

Sunday, August 22, 2010