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Bishop Fleming

BISHOP FLEMING PUBLISHES A BENCH-MARKING REPORT FOR SOUTH WEST CARE HOMES

Homes with less than 25 beds are most at risk

The care-homes team at South West accountancy firm, Bishop Fleming, has created the region‘s first “bench-marking” report, enabling care-home owners to compare their business to competitors within the region.

A key message from the survey of South West care-home businesses reveals that smaller homes, with less than 25 beds, are most vulnerable to commercial viability.

The Bishop Fleming survey identified that more than two thirds of the region‘s homes (72%) rely on public-sector funded fees for their residents, with 86% reporting that those fees are less than £400 per week.  More than 20% are receiving public sector fees of less than £300 per week.

But almost half of South West care homes (49%) are charging between £400-£500 per week for self-funding residents, with 38% charging more than £600 per week.

Tim Godfrey, head of Bishop Fleming‘s care-homes team, said:  “In our experience, the homes commanding above average public funding are those that shout the loudest and provide the highest quality care.  Care-homes that are able to move away from state-funded residents can charge fees that reflect the true costs of providing hotel quality accommodation and 24 hour care”.

While 60%  of the region‘s care-homes enjoyed a profit increase in the past year, more than a quarter (28%) saw their profit reduced by more than 10%.

“The balance of cost-control and quality-delivery is crucial to profitability”, said Mr Godfrey.  “The new star-ratings have a massive impact on people‘s choice of homes, and are vital for ensuring high occupancy rates, which will make or break smaller homes with up to 25 beds”, he added.

Almost half the region‘s care homes (49%) are enjoying 95% occupancy rates.

“But 14% of South West care homes are currently recording less than 80% occupancy, and will be struggling in the current economic climate.  Most of those homes, we suspect, are the smaller ones with less than 25 rooms.

“The new star-rating assessment system will be pivotal for those smaller homes, which should be driving up occupancy by driving up quality.  They should consider dual registration (residential and nursing services), or sole focus on nursing or dementia-care”, said Mr Godfrey.

For more than two thirds of South West care homes (67%), their staff payroll represents more than half their costs.

“Care-homes must cut down on overtime payments and employ more part-timers”, said Tim Godfrey.

“A care-home spending £50,000 on overtime could employ 10 part-timers and save £6,400 in National Insurance payments alone – and boost the home‘s team spirit”.

Almost two-thirds of South West care-home owners fear that occupancy levels and fee-rates are under threat:  but Bishop Fleming‘s sector specialist has a different view.

“While demographics suggest a long-term sustainable future for the region‘s care-home sector, Government policy is focused on ‘stay in your own home‘.  The forthcoming general election is unlikely to change this picture”, said Bishop Fleming‘s Tim Godfrey.

“There is no doubt that the South West‘s care-homes will be a winning sector, because this region is a location of choice for pensioners.

“But there will be winners and losers.  The winners will be the homes that can attract the self-funding residents and command the higher public-sector fees by delivering the best quality”, said Mr Godfrey.

“We might lose a number of the smaller care homes, with less than 25 beds, but we shall see this region sustain its role as a national leader in providing care home services”, he added.

Copies of the full Bishop Fleming Care Homes bench-marking report are available from the firm‘s website:  www.bishopfleming.co.uk

ENDS                                         25th February 2010

For further information, contact:

Tim Godfrey, Bishop Fleming:  01803-291100
David Sturgess, Sturgess Van Damme:  01275-349011 or 07768-078656

 

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