Investment group advises on care sector strategies

SECTOR WARNING Greg Palfrey, a partner at accountancy group Smith & Williamson
SECTOR WARNING Greg Palfrey, a partner at accountancy group Smith & Williamson
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CARE home owners across the region are being warned of significant difficulties facing the sector.

Greg Palfrey, a partner at the south coast office of accountancy and investment management group Smith & Williamson, which covers Portsmouth and the surrounding area, said care homes were facing crucial decisions in a sector undergoing constant change and wants to remind them of strategies used by successful operators.

The industry is experiencing growing regulatory requirements, rising payroll costs, public funding restrictions, expectation of improved physical facilities, and increasing establishment costs.

Mr Palfrey said: ‘These are all causing a gloomy view of the care home arena across the Portsmouth region but for care home providers it is not all bad news.

‘There is an improving appetite from funders, such as banks and equity houses, for the right business model.

‘The key question many providers face is how to deliver a profitable business model that can satisfy the demand, balancing affordable fee levels and mix of private and local authority funding, with appropriate cost control.’

Mr Palfrey said it was vital care homes keep up to date with constantly changing Care Quality Commission (CQC) requirements, to ensure that “good” or “outstanding” reports are achieved.

He also urged that they develop staff properly, maintain a high proportion of self-funding residents over local authority-funded clients, have a clear business plan for the short and long term, keep strong financial control, and monitor key performance indicators on a regular basis.

He added: ‘While care businesses increasingly appear within our financial warning criteria, there is still a very successful care sector.

‘Success in the sector can be achieved by implementing the strategies described above.

‘Taking the time and having external sources, such as Smith & Williamson, to assist with this is key.’