The Impact of COVID-19 on the UK Care Sector
Avison Young’s Healthcare team is preparing its clients for a multitude of potential scenarios and outcomes in the health and social care sector.
There is much speculation about the post-COVID-19 future of real estate, and Avison Young’s Healthcare team is preparing its clients for a multitude of potential scenarios and outcomes in the health and social care sector.
Perhaps more than any other, there will be recriminations about how well prepared the care sector was for a pandemic.
For the last six weeks the sector has faced deep operational issues on the front line, caring for the element of the population that is most vulnerable to the ravages of coronavirus: the elderly and those with underlying health conditions. The number of deaths in care homes is high and exacerbated by the absence of adequate PPE, staff on sick leave, and the logistical difficulties of effective resident isolation. Whilst these issues are all currently front of mind for care home owners, the financial worries of falling occupancy and long-term damage to business are growing by the day.
The peak of the virus has now been identified and we expect a partial release of lockdown to come shortly. However, that is unlikely to meanthat some form of normality will return to the social care sector any time soon. Operators of home care and care homes will desperately want to see their staff and residents/clients return to a normal life, but protecting the vulnerable will need to continue for much longer than for the wider public, and the stresses and potential damage to business will continue and almost certainly need further government support. Testing should now be at or near the Government’s targeted 100,000 per week and many care workers have signed up to be tested. The long term health of care providers and the protection of their clients is an imperative to sustain the vital services they provide.
So, what will this mean for the physical real estate that underpins the delivery of crucial care, and those who invest in this sector?
For the remainder of 2020, everyone will want time to breathe, to reflect and to mourn. There will be a period of reflection and investigation out of which we predict some changes will start to emerge – both out of necessity and out of desire:
- some operators of older and non-en suite care home facilities will have found it impossible to operate isolation effectively; so there may be an accelerated closure of small, older homes in the short and medium term
- there will be a wide and manifest recognition that social care is a vital infrastructure and will demand to be treated as such
- integration of the various sections of health and social care has been shown to be fledgling at best, and integration will demand proper commitment and funding from governments to advance it; and
- new care home design will likely change to better bridge the social care/hospital care divide
These advancements will all require strong government support.
Furthermore, Avison Young would like to see, and help create, a better integrated care system, and a better funded sector. Specifically, we support:
- a revised planning system to fast track health care development of all types; NHS, Primary Care, Care Homes, Retirement/Extra Care Living. These developments form part of vital infrastructure
- a review of private sector funding to facilitate further development of NHS real estate assets
- care homes bridging the gap between hospitals and home (step up/step down) with enhanced medical facilities and equipment as part of a properly integrated health and care system; and
- a reconnection of healthcare with town centres. The changing face of the office and retail sectors provides the opportunity to bring our doctors’ practices back to, or keep them in, town centres and develop urban extra care schemes where the occupants can enjoy services and facilities bespoke to their scheme and also the retail and cultural offerings of the town.
The care sector provides a vital service to those in need, and offers a steady investment opportunity.
It’s clear that the COVID-19 pandemic has revealed cracks in the sector that will need to be thoroughly investigated and remedied to provide for an ageing population that continues to rely on the healthcare system, particularly care homes. The sector will provide a pool of opportunities for operators, developers and socially conscious in vestors in the years to come.
