Today, The Northern Echo launches a series of special reports looking at the fragile state of our care sector. In the first in the series we look at fears that hundreds of care homes across our region will close within the next five years.

THE region could face a shortage of care home beds with many “not fit for purpose” homes at risk of closure in the next five years, a report has warned.

Property consultancy Knight Frank predicts that 6,500 care homes with about 140,000 beds are at risk of closure across the UK, in the next five years.

The North-East and North Yorkshire reportedly lost 1,299 beds between 2017 and 2020 and hundreds more could go because of the impact of Covid-19 – at the same time as demand is expected to surge due to an ageing population.

The Northern Echo:

Julian Evans, Knight Frank’s head of healthcare, said: “For four or five years there has been a national crisis in terms of bed provision, Covid has crystalised what we already knew.”

He said the sector faces a perfect storm and the coronavirus crisis has turned low-profit homes into “zombie businesses”.

This is due to the death toll during the pandemic and more families currently choosing to keep older relatives at home when possible.

He said: “A care setting is probably the safest environment to be in, if the buildings are right, with professional guidance and staff set up to manage infection control better than retail, offices and houses.

“They are managing the pandemic brilliantly but there has been significant scaremongering which has impacted the sector.

“Marginal businesses have become zombie businesses.

“With a lack of placements national occupancy has fallen from about 89 per cent pre-Covid to 79 per cent and PPE and additional costs have reduced profits of homes that cannot survive.

“That will kill off a large number of care homes.

“I think we have a 12 month lead in.”

The Northern Echo:

Mr Evans said those most at risk of shutting are the smaller, independent and older properties which are “not fit for purpose” and have little or no profit to reinvest in upgrades and operating costs.

These are often the homes that look after less-affluent residents who rely on local authority funding to pay for their care which is means tested, he said.

“You cannot run any business if the funding isn’t there or it becomes a loss leader, so many operators then focus on the private market.

“I’m afraid you then see operators who try to manage within local authority funded market and you see the consequences – CQCs ratings go down, it struggles to get the right calibre of staff, it isn’t investing properly in the property.

“I’m afraid in the local authority market funding in inadequate. ” added Mr Evans.

One thing working in the North-East’s favour is the number of care home built in the early 2000s, because companies saw land was relatively cheap in the region and worth investing in properties.

But around 80 per cent of care homes are more than 40 years old and Mr Evans thinks it will get tougher for care companies to secure loans to renovate.

The lack of profits to reinvest in the buildings and a gap in the money paid by local authorities for care and the true cost of providing adequate care, including increased nursing needs, will make it impossible for some to stay open.

The problem with the nation’s care home stock is just part of the problem, with urgent action needed to recruit and value 40,000 nurses and more social care workers, Mr Evans said.

He echoes calls from much of the sector on the Government to address funding of the social care and says that will come down to increased taxation.

Mr Evans said: “Covid has shone a light on social care but I fear we will get back into old ways within 12 to 18 months once life to normalise.

“Boris Johnson, Matt Hancock and Keir Starmer as a collective need to come together to restructure social care funding.

“Senior leaders within social care need to put pressure on Downing Street.

“We’ve been talking about it for 20-plus years, Covid has crystalised the situation and we must deal with it as an emergency.”