In the UK and across continental Europe there is significant strain on government budgets and healthcare systems. Private investment in care-based living can play a vital role in tackling the shortfalls.
There has been a structural shift in how long-term care is provided, caused by aging demographics, an increase in chronic health problems and growing populations. Since 1987 there has been a >50% reduction in NHS hospital beds, the majority of which were for those with behavioural health including autism and learning disabilities. The shift is to provide care within the community, and the Care Act 2014 places responsibility with local authorities.
The Kings Fund report that 836,000 people received care within the community (2021/22), but only 42% of requests for support resulted in care being received, and with an 11% increase in requests since 2015/16 local authorities do not have the capacity to satisfy the large and growing supply/demand imbalance for the necessary adapted accommodation in which to deliver community-based healthcare provision.
Furthermore, the National Housing Federation (2021) estimate there are 8.5mpeople with unmet housing need2, coupled with UK housebuilding at an all-time low, there is little opportunity within the public sector to rectify the imbalance. Even with the recent funding commitments in the Autumn Budget this is unlikely to change to any material extent. Therefore patient, long term private capital is becoming a greater part of the delivery of these assets, and with 25-year cross party-political support, it is an essential element to protect the public health system and to deliver cost savings to the public purse.
Civitas Investment Management (Civitas), a pan-European investment advisory firm, invests into such care-based living assets, which deliver care to individuals within the community. The properties are typically smaller lower density developments which have been built or specifically adapted to the needs of the underlying residents who require long term care.
The Civitas model is demand led – working in partnership with local authorities and care providers to establish areas of unmet demand, Civitas then acquire and adapt, or forward-fund the development of high-quality properties to meet the identified needs. Civitas work with a core group of trusted partners for development, property management and care delivery and the properties are all on long-term index-linked leases, with the rent ultimately paid by local/central government. Although Civitas own the real estate and have no legal responsibility for the care delivery, as a socially responsible landlord Civitas also places great importance on the quality-of-care delivery and established a highly experienced independent Quality Assurance Board to monitor the quality of care across the portfolio, in addition to the primary regulatory oversight undertaken by the CQC and care providers.
The community-based quality of care element is critical – enabling people with long term needs to continue living in the same area near to family and friends, whilst getting the required levels of care. This contributes to feelings of belonging, acceptance and leads to increased independence, ultimately improving outcomes for individuals and their families.
Civitas believe that when done well, with an experienced specialist team, private capital is a great benefit to UK social infrastructure, including the NHS and government budgets and with the sector requiring €47bnof investment by 2030, there is a growing demand for this type of investment.
With the new government undertaking a pensions review, it will also be considering the benefits of the LGPS investing into local economies. With additional investment from LGPS pools into quality alternative real estate and infrastructure assets such as this, it would further alleviate pressures on stretched local healthcare services, boost local infrastructure and economy whilst delivering stable indexed-linked returns for their underlying pension funds.
