Roundtable: Investing in infrastructure for #ageing communities to enable independent living

Raina Summerson, Chief Executive Officer, Agincare

Baroness Sally Greengross OBE, Chief Executive, International Longevity Centre

Paula Broadbent, Retirement Solutions Director, Engie

Moderator: Michael Voges, Executive Director, Associated Retirement Community Operators (ARCO)

MICHAEL: I’d like to start by addressing the corona virus pandemic. Do you think there will be any long-lasting change to how society addresses the ageing challenge coming out of the last few months?

SALLY: This is going to have a much deeper and more serious effect on all our lives than anything I’ve ever known in my quite long life. Our infrastructure is going to need to change. I don’t think we’ll ever go back to exactly where we were before this crisis in terms of infrastructure or any of our other rather recent systems of care, work or living. For example, I don’t think people will go back to working full time in offices and there will be a lot of office buildings which are going to become redundant. This could be a big change of direction in which we’re all involved.

PAULA: At Engie, we, like everybody, consider this is just such an unprecedented time that we have to innovate to find new ways to navigate the crisis. There has been a huge change in how we operate. I agree completely with Sally about how things will change going forward. This is going to have a huge impact, but we’re quite confident that it isn’t all going to be negative. For example, some people may know Engie is very committed to the zero-carbon agenda, and there has been a renewed optimism that we can make real strides in this area off the back of the pandemic.

MICHAEL: So, looking forward, maybe not just six months, but maybe a year, two, three, five years. How will this change the care home sector and especially investment in the care sector? Do you think this will be seen as a sector which is suddenly difficult from a reputational, operational or financial point of view? What is the long-term impact?

RAINA: There are probably two avenues now – public and private. The private pay market expanding very rapidly. Up until COVID we were already seeing some issues around land prices and build costs with the competitive nature of the market. We were seeing people having much lower and slower occupancy fill-up rates, which obviously affected the appetite to invest in that market. We watch that space, but actually, our primary customer bases is less the private pay market and more our local government CCG partners. And I think for that space, occupancy is going to be absolutely key as well and so that will obviously deter investment. We could see some benefits for land prices and build costs in the future, depending on how short lived or lengthy the recession will be.

I think for us, it really is about the public parts – and when we’ve got easement of the CARE Act, which also affects our clients. I’m worried about some of those easements and how they might affect public funding and activity in the coming months. That would affect us if things just slow down. That said, we deal with people who are at the point of need. They don’t come into our care homes unless they really need care and unless other avenues have been exhausted in terms of home care, living care, extra care. I think it’s going to be a time of consolidation, and we’re going to have to keep an eye on our overheads. It’s going to make us more careful of our expansion in our five-year business plan.

I do think this crisis will affect some of the private market. We’ve already seen some of that heading into tools and services and complex care anyway, and I think that this will probably make that situation continue.

SALLY: That speaks to something I’ve been pondering. I think we might get a new status for social care coming out of this crisis. If social care workers get a higher status, that will be excellent. It will be very costly. But I’m sure it’s going to happen because of the publicity around what’s been going on. That’s good in many ways, but what about the expense?

MICHAEL: Let’s talk about specialist housing now, and especially housing with care developments, which I know internationally are being looked at as an alternative to the acute hospital. Sally, you’ve been a great advocate of the wider housing with care agenda in the UK and internationally. What’s the future for the housing with care sector or retirement community sector after this?

SALLY: Well, I would start by saying that over many, many years, the happiest group of older people that I’ve seen are living in housing with care developments. It seems to be the answer to a lot of people’s needs. That is, you get company and so are not isolated, but you’re safe. I believe so passionately in this sort of housing as being the answer, particularly in the UK, to the very, very deeply felt movement or deeply felt tradition in this country, of living and ageing in your own home.

There’s a huge opportunity here for housing with care if it can be brought into the mainstream. What we need is the care home sector and the housing with care sector and housing to come together with the NHS instead of all being separate and work on a coordinated plan. Our systems are so fragmented, and don’t talk to one another nearly enough. If there’s a lesson to be learned from this terrible time we’re having with COVID-19, it will be that the ridiculous division between NHS and social care is quite unacceptable. Bringing them together is the only way to rid ourselves of this terrible lack of resources going into social care because the people running the health service really don’t talk to the people running local services or social care.

You’ve got to move the management to comprise all of these people together at the local level. The funding then goes somewhere locally and comes from the NHS and from local authorities working together. We’ve got to get to a different management system and eliminate the rift between health and social care. I think if there’s a single priority, it’s to get that right. We wouldn’t be in such a terrible situation if we had a coordinated approach, instead of one where NHS is separate to social care and never the twain shall meet. We’ve got to get over it and use this current reality as an opportunity to do so.

MICHAEL: International comparisons are interesting here, too. The level of sustained intra-community transmissions of COVID-19 in care homes haven’t been repeated in housing with care specialist housing schemes in other countries, as well as the UK. I think this is for two main reasons. One is that you can more effectively self-isolate inside your apartment or your own house. The other one is that there’s lower instances of potentially asymptomatic care workers delivering visits throughout the day. We’ve seen specialist housing have not as bad an experience as other sectors.

Paula, you’ve just entered that sector. Do you think that the contrast between how care homes are faring versus specialist housing or other housing will influence your investment decisions going forwards?

PAULA: No, not at all. I think this has strengthened our direction of travel. Our cost efficient zero carbon focus comes from every operation that we do right across the hospital, social care, local authority services, transport infrastructure - it all feeds into that. The focus is about ageing in place. The picture that Sally has just painted could have just been taken from our strategy. Would start to think about being a care provider at this moment in time? No, I wouldn’t be making a business case for that. But I did make a business case to say we needed to start investing in and creating not just the infrastructure, but actually some of the assets required to create the efficiency we want.

Reflecting on Sally’s points, clearly, social care is absolutely essential and is just as essential as the NHS. You just need to look at our demographic stats to then consider where are we going to be going forward. For example, we’ve got a shortfall of probably 400000 care home units by 2030 in the UK and 80 percent of the growth in households brought by 2041 is projected to be by somebody from the over 65 age group. These are really stark figures. I do agree with Sally, that it is about looking for a holistic approach so that we have harmonious services. The zero-carbon component is critical here as well.

MICHAEL: Raina, have you looked at alternative housing-with-care options recently?

RAINA: Two of our sites already have housing with-care onsite. We also operate about fifteen extra care or assisted living support contracts across the country, and work with various landlords in the kind of housing care arena. We would be keen to explore potentially being a landlord and an operator and looking at an operating model in a different way.

Housing-with-care is an area we love. We see stability. We see some really great outcomes for people who live in those services. The two that we have are interesting because they’ve been disposals by operators who aren’t really interested in that cross-fertilization of services. But like Sally and Paula, I’ve always seen the value of having that full range of services. We deal with local authority contracts largely and my worry always is that they will try and get care homes on the cheap. Some of that model of housing-with-care and independent living is polluted and can get mutated. You really need to be committed to that philosophy in a proper way rather than just thinking it’s a cheap option in place of a care home. That is my concern about that market. It needs to be with the right intent and the right philosophy behind it.

MICHAEL: What change would you like to see come out of the pandemic, for care and care infrastructure?

PAULA: For me it is that flexibility and collaboration is more vital now than ever before. People and organisations will need to be bold in their commitments and seek out and find opportunities to partner and collaborate to create solutions without it being a burden on just one organization.

RAINA: I think something positive coming out of COVID-19 is that social care will have a different profile, there will be renewed emphasis and push for better integration of services. That has to be underpinned by a system that funds that. It has to be that social care isn’t overtaken by NHS and absorbed into a complex bureaucratic system that takes away some of the necessary innovation. I think the sense of community has been a huge positive coming out of this crisis, from public health to transport to climate change, all of those things hopefully will come together to create an environment where people question what it means to age well in this society and what do we need to do to make that happen. And some of the community spirit that’s come out will hopefully drive that awareness in the younger generation as opposed to it being just by people who work in the sector or are directly affected.

SALLY: What we are really talking about is a new approach to the coordination by different sectors. And if we can bring together the different sectors at a level which is below central government, but locally so that the NHS is now not a thing apart. We could also think about the inter-generational aspect of housing. We have a very exciting possibility here because young people need housing, and older people need young people… And we have to do all we can to benefit from what is a terrible crisis.

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This article is an extract from the Longevity Trends Report 2020 - mid year update

The report captures Longevity Leaders' extensive research into this space, including the most important longevity trends of 2020 that businesses, policy makers, scientists and the general population need to be aware of.

Download the full Longevity Trends 2020 Report