With a new Labour government in place, major changes are anticipated for the later living sector. Andrew Harrop, general secretary of left-leaning think tank the Fabian Society, has been a useful source of information on this front, as he has been working with the Labour Party in recent months to work up policy detail.
Speaking at the recent ARCO annual conference, Harrop reiterated the intention to accelerate housebuilding and add an additional 1.5m new affordable homes within the next five years. His advice is to have a strong plan for affordable provision, as a means of attracting support from government and other key stakeholders.
Social care on the agenda
The thinking is that, with a “super majority”, Labour can afford to adopt longer-term thinking and be truly ambitious in its goals. Many previous governments have failed to get to grips with the social care crisis this country now faces. Albeit not an immediate priority for the government, Sir Keir Starmer’s longer term vision is to create a National Care Service, which will include a goal of keeping older people healthier for longer, in their own homes. It looks like the ultimate aim will be to deliver this via national government, local councils and licensed care providers – and no doubt there will be much greater government regulation around the provision of care. Side-by-side with this will be a focus on fair pay and worker’s rights for those working in the later living sector – something to keep a watching brief on.
The later living sector also continues to wait with bated breath for an update on the Older People’s Housing Taskforce. ARCO chair and Audley Group chief executive Nick Sanderson, who has sat on the taskforce, noted at the conference that the final report was delivered to government in the weeks before the election was announced. Although the delay in the report being acted on is disappointing, Sanderson made the point that there will hopefully be some benefit in the report not having been picked up by the Conservative government, as it may mean that the new Labour government will be keener to make it its own. In the background, ARCO and those involved with the OPHT have enjoyed a useful dialogue with the civil servants involved in this area, and there was general optimism over the actions that will be taken once the government picks this up.
Crunching the numbers
Insight into how the later living industry might significantly step up delivery, and in turn affordability, was provided by Tom Scaife, Knight Frank’s head of senior living, who emphasised that the numbers stack up better with larger-scale developments. Currently the average service charge for a two-bedroom flat in an integrated retirement community is about £9,000 per annum. The median income for a 75-year-old is approximately £18,000 pa. Consequently, forcing service charges down without sacrificing essential services has to be a priority for the IRC sector.
In larger-scale developments, it is much easier to keep service charges at a manageable level, given that there are more residents to share the costs. Developers who had been surveyed by Knight Frank felt that the ideal size for an IRC is between 125 and 150 units – this size allows efficiencies of scale without becoming so big that they become burdensome in terms of initially selling units and ongoing management.
Trust and oversight
The regulatory oversight of the sector in the UK, compared to more developed markets such as New Zealand, came under the spotlight again, particularly in relation to consumer protection within the fees structure. While there are pockets of innovation and greater transparency and clarity within the new tenure models starting to hit UK markets, the next step is standardisation and regulatory enforcement. This will build trust in the product which is a key component of growth.
Talking of trust, Will Bax from Retirement Villages Group also spoke at the ARCO Conference about the company’s new Thrive scheme in Chester, where it has instigated a new contract with residents focusing on being “affordable, certain and simple”. The idea is that lower weekly management fees are subsidised by the deferred management fee, there is a guaranteed price on exit, management fees are frozen on exit, and there are no refurbishment obligations on residents on exit, nor administrative or sales fees.
For a shot of reality, Bax shared the stage with three inspiring residents who are living in IRCs. They pointed to the importance of trust and communication in the ongoing management of the developments they live in. Key to this is the right staff, at the right levels, who can encourage resident engagement and deal with any concerns in a timely and efficient manner, so that IRCs can really deliver on their USP – that they are thriving communities.
Looking ahead
No ARCO conference would be complete without an element of future gazing and alternative thinking. This year’s contribution came from Peter Ward, a freelance journalist and author of The Price of Immortality, which investigates the pursuit of eternal life. In the context of later living, he got the room thinking about the pros and cons for older people seeking a longer life and the role of providers, particularly from an ethical point of view.
Elsewhere on the agenda, the growing use of wearable tech and robotics in improving quality of life and health outcomes, particularly in Asia, was discussed. Certainly, such moves should be explored to free up staff time for those precious interactions that the residents have told us are so important to their experience in later living communities. Unlocking delivery is only part of the solution; we need to also make sure that consumers are motivated to drive demand.
Photo © Sven Mieke/Unsplash
Amy France is head of later living at Forsters
