Newsroom

17.10.2012
Castleoak CEO Mel Knight on extra care (article from CCMN)

This article appears in the latest edition of Community Care Market News, published by Laing & Buisson

Melville Knight is Chief Executive of Castleoak Group, the care sector’s development and construction specialist. He also leads Castleoak’s involvement with the CarePlaces Fund and sits on the board of Your Care Rating.

How do you define extra care?
There seems to be a very wide range of interpretations of the term “extra care” which does cause some confusion. We try to keep it simple and would describe it as housing designed with the needs of frailer older people in mind and delivering varying levels of care and support on site.

Residents – whatever the tenure (rented, outright purchase or shared ownership) - have their own self-contained homes within a wider community setting with access to a range of care services as required.

What are the positives of extra care from a business perspective?
For those providing care or housing services to older people, extra care is a very useful option. It offers a form of accommodation and care which offers the resident a strong possibility of living in greater independence for longer.

Demand for this type of accommodation should be strong. After all, demand is to a large extent driven by need and the demographics are overwhelming, with a rapidly growing older population.

Extra care delivers operators with a range of revenue streams – development profit from the land, rental income from the building and fees from the provision of care services.

Why do residents choose extra care?
Quite simply because extra care delivers the half-way house that many older people have been looking for.

It delivers them with a far greater sense of personal security than they could have living entirely independently as care, support and community life are all available. At the same time their independence remains much greater than would be the case if they moved into another form of residential care.

What facilities should an extra care scheme provide?
This is the $64 million question and it really revolves around the extent of communal space, which can be expensive to deliver.

If the ratio of living space to communal facilities is wrongly calculated – for example if a scheme is overly ambitious in respect of the latter – it can render the whole project unviable. So the communal aspiration must pay proper regard to the financial model or it will be a non-starter.

In our experience, we would break down communal facilities into three broad categories:

  • Necessity – communal lounges/activity areas, bistros/coffee shops and staff facilities
  • Desirable – hairdressing/beauty salons, restaurants, arts and crafts rooms, libraries and IT suites
  • Nice to have – cinemas, gyms, swimming pools, hydro therapy pools

Whether schemes are for outright purchase or mixed tenure, decisions about the extent of the communal facilities will have a major implication on whether or not they stack up financially.

What care services should be available to extra care residents? How can extra care schemes help residents when their needs increase, for example, if dementia has worsened?
The care services delivered in an extra care setting should mirror those available in any other domiciliary context and should be a combination of domestic and personal care.

It is not realistic to think that more intensive medical care can be delivered within an extra care setting and, for those residents requiring full scale nursing or dementia care, the care home remains the only realistic option.

This is patently the case with severe dementia which can be disruptive in a community setting although research seems to suggest that other residents are generally sympathetic when one of their number develops dementia – though less so it seems if a newcomer with dementia is parachuted into the community.

So extra care is not a panacea for all ills.

Living in an extra care scheme should, however, make a material difference to the social welfare of residents – reducing isolation and giving a sense of community and belonging which surely improves mental well-being.

Is extra care for everyone?
The short answer, of course, is no.

It is not suitable for people with acute nursing needs or with the most severe forms of dementia. A care home still remains by far the best option for them and their families.

There will also be those who, though needing much lower levels of support, will be resistant to anything which they see as institutional care and nothing we say or do will convince them otherwise. Forcing people is clearly not an option and so we need to recognise that we have a lot of work to do to make sure that more people see the extra care offer for what it really is – a chance to live in relative independence for much longer with support available as and when required.

Extra care is very helpful for older couples where their individual support needs may be different. Of course, it doesn’t remove the difficult choice they face if one of them finds that their needs develops to a point where a higher level of residential care and support becomes necessary.

What factors prevent/stimulate the growth of extra care?
Let’s focus on prevention as this is the key issue of the moment.

Prior to 2008, and the banking meltdown which triggered the global recession, it might not be unfair to say that extra care was, to use the Olympic idiom, a gold medal contender.

It ticked the right boxes and the Department of Health created grant funding for the development of schemes – the rationale being that spending money in this way would keep older people healthier for longer thereby reducing strain and cost within the acute sector.

Of course, that argument still holds water but, in an age of austerity, capital spending of this sort is not seen as critical and so the grants have largely disappeared and so too – surprise, surprise – have many schemes which have remained on the drawing board.

The hunt for funding has been no easier for private schemes either. Extra care projects are capital intensive and it is proving challenging to attract the required levels of equity and debt funding.

Funding, therefore, is probably the biggest single deterrent to development at the moment. However, if the market can be made more responsive/liquid - through better product understanding and more flexible entry/exit solutions - this should help to attract alternative sources of funding.  That said, we can take some heart from the recent announcement by Liberal Democrat Care Services Minister Norman Lamb that the government fund available to stimulate the market in specialised housing will be boosted from £200m to up to £300m.

Should more local authorities commit to extra care in the same way Derbyshire County Council has with its £200m investment?
The Derby announcement was a very welcome piece of bright news to shine on an otherwise rather cloudy landscape!

Of course, it would be great news if more local authorities followed suit but, even after the government’s recent announcement about an additional £100 million for specialist housing, we shouldn’t be holding our breath in expectation. The perilous state of local authority finances across the country means that for the foreseeable future announcements like this will be the exception and not the rule.

Do you think that extra care is a safe financial investment for the future?
Ironically, given how little funding is coming forward – yes I do. However, the caveat to this is that a number of things need to happen:

We need to improve awareness amongst prospective purchasers and their families about the extra care offer (and the alphabet soup of other options) 

Speed of sale is notoriously slow - the sector needs to develop more flexible solutions to remove barriers to entry - eg. rent, rent to buy, guaranteed buy back

Schemes need to be more outward facing to attract additional revenue streams - community hubs - to help pay for communal facilities and, as a beneficial bi-product, creating a more vibrant community

How would you describe a well-designed extra care scheme?
This is a subjective view but I would put forward four factors which define “well designed” in this context:

  • A scheme needs to blend aesthetically with the community in which it fits. This does not rule out so called signature buildings which clearly stand out rather than blend in but there needs to be a design relevance
  • A good scheme needs a genuine community coherence offering shared accessible services to occupants of the scheme and other local residents and including opportunities for volunteers
  • In purely practical terms, a well designed scheme will be one that delivers residents with an appropriate balance of independent living space, care and support and communal facilities. The design should facilitate the creation and maintenance of a vibrant community enriched by local resident involvement
  • Finally, of course, well designed means one that meets all the above criteria and is still affordable!

Do you think there are enough extra-care style developments up and running in the UK at the moment?
There is an under supply of purpose-built care accommodation for older people needing care and this includes extra care.

There are certainly enough extra care schemes in existence for their efficacy to have been assessed. Indeed, the work of the Personal Social Services Research Unit at the University of Kent and the Housing LIN has confirmed extra care’s effectiveness in delivering positive person centred care and in reducing hospital admissions.

However, I would have to say that I believe more developments are needed across the care spectrum.

Do you think extra care schemes can be developed for people with all kinds of budgets or is it just for those who can afford to buy into a scheme?
As a means of delivering effective care, extra care should have a role to play across the wealth profile. It certainly shouldn’t just be the province of the wealthy.

As I have argued, in response to earlier questions, in order to do this we need to make sure that extra care as a concept is more widely understood and we need to be realistic in our aspirations about what schemes serving different groups can deliver in terms of communal facilities. Budgetary realism is critical if we are to see more development.

In some cases, grants will be needed from the public purse but this can be justified by the savings made in the acute sector and, to a lesser extent, in more intensive forms of residential care.

Personally, I believe that the middle market offers a real opportunity – and one that is relatively untapped. This should mean far more schemes being offered on a mixed tenure basis - open market sale, shared ownership and rent.

How do you see extra care schemes developing in the future? Will we see more schemes popping up?
I certainly hope that extra care will remain a part of the landscape of options for older people and that we are able to take the lessons that have been used thus far on the schemes built to date and to apply this to future needs and financial circumstances.

The generally weak state of the economy, and the government austerity measures, mean it is hard to envisage any sudden upsurge in activity anytime soon. However, organisations and individuals will be looking hard at finding new and imaginative ways of funding schemes and I’m sure that with time we will see a return to previous levels of development of these schemes.

This article appears in the latest edition of Community Care Market News, published by Laing & Buisson

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