Extracting Profits Through Care Home Real Estate
The Billion-Pound Property Speculation Fuelling Britain's Care Crisis
Chronic underfunding is often blamed for the growing crisis in the UK care sector. But, property speculation may also be driving up costs and pushing down standards, finds a new report by CICTAR.
This new report, authored by Vivek Kotecha for Centre for International Corporate Tax Accountability and Research (CICTAR), investigates how real-estate speculation is contributing to the UK's crisis in long term care for the elderly.
While the current funding debate focuses on the profitability of care home operating companies, the additional wealth extraction that comes from care home property development and rental is often overlooked. Using a top 5 operator in the UK (Care UK) as an example of a group with separate operating and development companies, this report highlights and explores the vast profits being made, and provides recommendations to address the problems raised.
We shared key findings of the report with Care UK. In response, a Care UK spokesperson said:
We pride ourselves on being an industry leader in providing safe, welcoming care home environments for residents across England, Scotland and Wales.
It is not uncommon for private businesses across a range of sectors to arrange their property development in this way and, in our case, it means we are able to create more purpose-built, high-quality, award-winning care homes which provide much-needed capacity across the UK.
It also means we are able to invest more in the wider operation of our care homes, including by providing more training for our hardworking, dedicated staff. This ensures we have a high quality of care in our homes, as reflected by strong customer satisfaction scores; some of the highest regulatory compliance in the sector (including the fact that we run more outstanding-rated homes than any other provider); and consistent recognition which has resulted in us being the most awarded care provider in the UK over the last two years.
We are passionate about providing the very best of care for the 9,000 residents who call Care UK home, and we thank their loved ones for entrusting us with such an important responsibility.
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