Published: February 17, 2022
Commentary from Scott Hutchinson, Relationship Manager at Unity Trust Bank, on investing in social care.
As we reflect on the past 12 months and look ahead to the new year, it is clear to see that the social care landscape is changing across the UK.
Despite facing the challenges caused by acute levels of staff shortages, rising operational costs, staff burnout and mandatory vaccinations, operators remain resilient. They should be celebrated for their significant efforts and contribution to society.
In addition, just as the pandemic exposed the extent to which the sector has been underfunded, Brexit simultaneously created its own level of uncertainty. As we approach the second anniversary as a non-EU nation, Independent Age has estimated that new immigration policies could result in a UK social care workforce gap. This could be as high as 750,000 people in the next 15 years.
In the UK, we have an ageing population. The reality is that most of us will require some level of support, particularly towards the end of our adult lives. However, the thousands of people that have been turned away for vital social care since the pandemic began demonstrate how the sector is becoming overwhelmed. This is putting the future provisions of quality care at risk. At the same time there will be an increase in the potential level of reliance on the NHS.
Despite this demand, the lending priority for mainstream banks has shifted in recent years. There has been a focus on completing large-scale deals that will offer strong long-term returns. Meanwhile, private care providers are juggling the rising cost of running care homes and pressures to upgrade facilities in the journey towards net-zero. Additionally, new strains of Covid have the potential to take staff away from the front line.
Although challenges pre-date the pandemic, Derek Feeley’s Independent Review of Adult Social Care in Scotland last year outlined how, in order to improve support for the sector, the first step is to shift the perception. Rather than a financial burden, social care is a vehicle for independent living, and a means of enabling collaboration.
At Unity Trust Bank, we understand the importance social care providers have within communities large and small. We are upholding our commitment to invest in customers that are making an important impact, even for those with smaller assets. Lending decisions are guided by our double-bottom line strategy. We assess not only the level of business success but also, most importantly, the value of service brought to society – both now and for the future.
For example, I recently approved an application for the acquisition of a Scottish care home. It began to underperform after its owner passed away. Upon inheriting the business, the family continued to deliver care by working closely with a third party. They have now been able to use Unity’s funding to acquire the home and enhance the quality of its service. This follows a number of deals across Scotland, including a seven-figure loan for a family-run care home in Ayr. Funding will enable its expansion through the acquisition of two additional homes in Fife.
As spending pressures increase, support from socially-minded lenders like Unity will be crucial to ensure the supply of quality care is able to meet increasing demand. Even in Scotland, where annual social care spending is the highest per head in Britain, there is still an urgent need for funding. We must to recognise that increased investing in social care is an investment for society as a whole.
