What will mega mergers mean for older residents?
Mon 18 Jul 2016
Much has been made in the housing press of the recently reported proposed 120,000 home ‘mega merger’ between Sanctuary Group and housing&care21, and they are not alone. Consolidation in the social housing sector is gathering pace.
However, is bigger necessarily better, and will it work in practice for older residents?
Since the beginning of the year there have been continued reports of the crisis in care homes, with providers experiencing difficulties in sustaining the level of care and support which they and their residents properly demand, particularly where individuals are not self-funding.
We are seeing local authorities increasingly require that staff be paid at the higher London living wage, as opposed to the national minimum wage, but without providing the additional funding to cover those costs. Likewise, the usual ‘one-third, one-third, one-third’ extra care and supported housing provision is often being phased out, with local authorities finding it difficult to fund any but those with the highest bracket of care needs.
The HCA in a recent report, Delivering Better Value for Money: Understanding Differences in Unit Costs, questions whether the ‘efficiencies’ achieved by a larger landlord are really as good as they sound.
The report concluded that the regulator, whilst considering that value for money is an integral part of providers’ compliance, must and should ensure that providers and their boards are properly challenging themselves to make the best possible use of their resources for the delivery of their social purpose and objectives.
Boards in the registered provider sector, as well as those in the wider charity world, are reminded to ensure that they do appropriately challenge and question the decisions which are put to them by their operating staff, with transparency over costs highlighted.
Coupled with the requirements to reduce rents (from 1 April 2016), which whilst currently exempted for the supported housing sector are not guaranteed to last, efficient use of assets and resources will be in all providers’ minds. Registered providers should not, however, consider just the headline costs, but also have regard to value for money obligations, and the wider and more esoteric function that they provide, particularly in the older person sector.
Registered providers are in the business of providing not only houses, but homes. That does lead to the question whether a faceless giant of a landlord is really conducive to the continued provision of effective care and support, particularly coupled with the often invisible nature of the older person sector?
I would argue that whilst the importance of the provision of suitable housing for older people can never be ignored, financial constraints and demands must be prime factors in determining an RPs continuance.
That said, to ensure the continuance of the care it provides, RPs and other providers must take a long hard look at themselves to determine who and what they actually want to be, and what their objectives truly are. Providing care and support without identity, and treating individuals and residents as mere numbers, does not sit squarely with the true nature of care and supported housing.
Whilst the benefits are often cited, there are downsides to mergers: in our sector there is an element of government control over rents, and monopoly power can drive lesser competitors out of the market.
There are also job losses, which often go hand-in-hand with the economies of scale and the removal of duplication. The impact on those who remain within the organisation needs also be considered: individuals working for the faceless corporate entity may feel less inclined or less well respected within their working environment.
There is often a reported loss of productivity in the swallowing up of a smaller organisation, where individuals feel that they can hide away, or there is perceived a need to re-skill or up-skill to ensure prolonged employment.
There is much to welcome from consolidation, but when providing homes for the elderly and infirm a greater degree of consideration needs to be given.