In recent years the stock of care home beds has barely increased in the UK. Whilst there has been new supply created from new developments, and the very occasional repurposing of former other-use facilities, these have only just about kept pace with the rate of closure of old homes.
The care homes that have closed have tended to be the older stock of smaller homes that often are a combination of 3-5 Victorian terraced houses that have been linked together across floors. These homes typically have 15-30 beds and 4-8 bathrooms. These homes close as they:
- are not fit for purpose.
- performed poorly in COVID (where patient infection control was very difficult without en-suite facilities).
- are challenging for staff recruitment and retention as staff like to work in new propose built facilities.
- are operationally and economically challenging with split floor levels and very poor energy performance.
- have poor economies of scale as fixed cost are spread across few residents as compared to larger market standard homes with 66-76 beds.
The pace of smaller care home closures has accelerated as the shortcomings above have become starker with a very challenging staff recruitment market in the last few years and the stratospheric rise in utility costs disproportionately affecting the smaller older homes with poor energy efficiency.
Whilst smaller older home closures are reducing the stock of care beds in the UK the supply of replacement new beds is set to plummet over at least the next 3-4 years. This reduced supply of new beds is a result of four significant factors.
COVID
The pandemic shifted the focus of all care home operators to dealing with the crisis that had enormous care, reputational and financial challenges. This meant that for several years there was no focus on signing new agreement for leases on new homes as no one could plan more than a few weeks ahead.
