Up to 1,000 care homes are predicted to close as financial pressures heaped on the sector by coronavirus could soon make business unsustainable, experts have said.
At least two homes have already shut their doors temporarily. The closures are expected to trigger a domino effect across the long-term care sector, which employs more people than the NHS and is estimated to be worth about £31bn.
William Laing of research firm LaingBuisson predicted huge losses for investors and said that about a tenth of the UK’s 10,000 care homes could go bust. The total impact could be far greater, as research by the National Care Association (NCA), a trade body, finds that three-quarters of care providers have serious concerns about their viability post-coronavirus.
NCA chief executive Nadra Ahmed said the sustainability of the sector was yet to be decided and would depend on whether people are willing to put their parents into care homes once the pandemic is over. “There’s a crisis of confidence at the moment and if people are too scared to go into homes in the future profitability could disappear,” she said.
Many providers were surviving on very thin profit margins even before the pandemic and now are struggling to cover the costs of staff absences, extra personal protective equipment (PPE) and expensive agency workers. Often just one or two empty beds can make or break a home’s profitability, said Martin Green of charity Care England.
Before Covid-19 they were operating with occupancy of about 90pc, data from LaingBuisson shows. Mr Laing said the significant number of deaths in care homes and drop in the number of new residents was likely to drag that down to 75pc. “That puts care homes on the borderline where business is no longer viable,” he said.