Black Swan Care Group overcomes the pressures of the sector to expand
- Credit: Archant
The struggles of the country's second-largest care home operator is symptomatic of the challenges faced by the industry, the boss of a group bucking the trend has warned.
Growing staffing costs and cuts to council budgets are piling pressure on care providers according to Tom Lyons, managing director of Black Swan Care Group.
Four Seasons Health Care, which provides services for 17,000 elderly and vulnerable people, has been locked in crunch talks with creditors as it teeters on the brink of administration.
Mr Lyons said he was keeping a watching brief on the situation in case an opportunity arose to rescue some of the group's homes.
His company, which runs a string of homes across East Anglia, has expanded rapidly by turning around struggling facilities.
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With an aging population care homes may seem a good investment but the combination of pension increases and a raise in National Living Wage put pressure on an industry in which more than 50% of overheads are staffing costs.
Despite these challenges Black Swan has grown swiftly and by January will have made four acquisitions in 18 months.
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Mr Lyons said: 'We have grown from a turnover of £3m when I started, in 2008, to £12.4m last year [to May 31 2017] and we will be more than £17m this year.'
With around 450 beds across the group the company employs 550 staff and currently has 16 homes across Norfolk, Suffolk and Essex, with a deal for a 17th home, in Norfolk, about to be completed.
'We are still trying to grow quite aggressively but it is about buying the right properties,' Mr Lyons said.
Around 15% of Black Swan's residents are publicly funded, their costs covered by the NHS or local councils, and Mr Lyons said times were particularly tough for operators primarily working with the public sector.
He said: 'We have a model that works but I have looked at publicly funded beds and we just can't make the figures work.'
A care provider can command up to 41% more for a private resident than a publicly-funded one in the same home.
Mr Lyons said if there were tax breaks or benefits to providers on workers then it would help to bring the overall cost of care down making public beds more feasible.
Black Swan began as a consultancy business and has partially returned to that sector with Mr Lyons and other members of his top team helping to advise struggling care homes.
One area which Mr Lyons said continued to be a struggle for many homes was keeping up with the changes to the Care Quality Commission's compliance requirements.
'All of our care homes are 'good' or 'outstanding' but we spend so much money trying to make sure our homes are compliant,' he said. 'Especially in Norfolk this is a serious issue.
'I think there has got to be more joined up thinking between social care and health care to try to drive efficiencies.'