With a spa, cinema and wood-panelled hall, Reigate Grange in Surrey, where Ann King was abused, is part of a growing trend for luxury care homes. Fuelled by global investors’ desire to capitalise on older people’s property wealth, luxury care applies a cruise-ship sheen to the grittier reality of dementia and the end of life.
The logic for investors is simple. People aged 65 and over in the UK now control 51% of Britain’s wealth, up from 42% in 2008, the year of the financial crash, according to the Resolution Foundation. A large minority of older people can afford £100,000-a-year care home fees because they have houses worth far more that they no longer need. A person in a £1m home who survives for the typical two years of a care home resident would still leave £800,000 in their will.
When Welltower, a US real estate investment trust, announced a deal this summer with the property billionaire Reuben brothers to co-own the UK luxury chain Avery Healthcare, David Reuben remarked that he was investing “at the precipice of unprecedented growth of the UK seniors population”. A joint press release described it as a “multi-year growth opportunity”.
Indeed, the Alzheimer’s Society forecasts that the number of people with dementia in the UK will increase from about 900,000 to 1.6 million by 2040, a huge “market” under the current UK healthcare system in which the NHS often does not fund dementia treatment.
Underlying profits are running at about 30% of revenue for a luxury chain such as Barchester, owned by the Jersey-based Grove Ltd, whose owners have been reported in the last year to include three Irish billionaires, Dermot Desmond, John Magnier and JP McManus, the annual LaingBuisson report into UK social care suggests. “There is plenty of money there and it will continue for a few decades,” said its author, the industry analyst William Laing.
Laing said there was so much property wealth that care companies could easily raise prices higher than the £2,000-a-week King paid at Reigate Grange, and still fill beds. He forecast an increase of 27,000 care home residents in the coming decade – requiring 400 new care homes, many of which are likely to be high-end. The elite market will not be much affected by recent policy changes limiting care fees to £86,000 a person because the “hotel costs” fall outside the cap and can comprise 70% of fees.
But does more money buy better care? Higher fees should, and in some cases do, allow operators to hire more care workers and to pay and train them better. But Laing has bad news: “There is no correlation between how much you pay and the care you receive.”
Signature Senior Lifestyle says it pays staff above average and everyone undergoes mandatory training. Overall, homes that are run for a profit perform less well on average in inspections by the Care Quality Commission regulator (77% good or outstanding) than not-for-profit homes (86% good or outstanding), his research shows.
Avery Healthcare’s current CQC ratings are 80% good or outstanding and 20% requiring improvement – the same as the average for all care homes in England.
Barchester said it was “committed to delivering the highest quality care” and 82.7% of its homes were rated good or outstanding by regulators. Avery was approached for comment.
Signature said CQC “rates our homes significantly above the sector average; 97% of our homes are rated as good or outstanding, of which 14% are rated as outstanding – placing them in the top 5% of care homes across the country”.
It said it split the fees “between offering luxurious accommodation and meeting the specific care needs of the people that choose to live with us”, adding its staffing level was higher than an average care home with “a far higher level of clinical expertise than average, with dedicated nursing and dementia managers”.
Figures this week have, meanwhile, exposed a desperate staffing crisis across the whole care sector. While 500,000 new staff are needed by the middle of the next decade to keep up with rising demand, the workforce shrank last year by 50,000 people, leaving 165,000 vacancies in England alone.
Average pay across the sector is £9.50 an hour, although luxury care firms often pay more. A fifth of care workers are considered to be in or on the brink of poverty. Care home residents’ groups have warned: “Lives and dignity are at risk.”
