Predicted surge in demand for care

Author: Local Government Chronicle - Sep 17, 2009

A 15-year decline in demand for care home places has come to an end ahead of a predicted surge, according to a new report on the UK independent care home industry.

But providers have been warned that revenues from local authority-funded places are unlikely to keep track with inflation when the public sectors purse strings come under intense pressure in the next Comprehensive Spending Review.

The Laing & Buisson consultancy said a “clear shift” had occurred from a falling to a growing market, with the number of projected residents at independent sector care homes projected to rise from the current 419,000 to 424,000 in five years’ time and 459,000 by 2019.

Its annual report on the sector said self-funders now made up 41% of demand in the private sector and that residents of independent care homes topping up council funding for their places may be more widespread than previously thought.

Laing & Buisson said that a dip in occupancy rates seen earlier this year was the result of an expansion in the number of places outstripping increases in demand.

Chief executive William Laing said the next couple of years could prove to be a breathing space before a dramatic surge in demand for places and unprecedented budgetary pressures.

“This may prove to be the calm before the storm,” he said.

“The care home industry is in reasonable shape at present, but looking further forward there is a real risk that 2011-12 will witness below inflation baseline increases from local authorities as central government ends its policy of fiscal stimulus, as grant support is cut and as councils’ financial situation deteriorates markedly.”

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