UK Healthcare & Education Update - January 2017
With bed blocking, mental health failings and councils suggesting council tax increases to combat underfunding in social care all hitting the news this month, Ploy Radford, Editor, HealthInvestor gives us her point of view on the current situation in the Last Word.
Recent M&A activity
- Tracscare has acquired 6 Supported Living services and a specialist ABI service from Embrace.
- HC-One has acquired 20 home care provider Helen McArdle Care, now rebranded HC-One North East.
- Ethypharm have acquired speciality pharmaceutical provider Martindale Pharma for €300 million.
- Complex care provider Badby Park has acquired South Park Care Centres in Darlington.
- Primary Health Properties has acquired Carden Medical Investments for £7.2 million.
- LDC has invested in Fishawack, a group of healthcare communications agencies.
- Sunflower Medical, a healthcare furniture manufacturer has been acquired by ESI Process (UK), a subsidiary of Indutrade.
- Phoenix Equity Partners has invested in Rayner Surgical Group, a developer and manufacturer of ophthalmic implants and pharmaceuticals.
- HgCapital owned IRIS Software Group has acquired PS Financials, which provides accounting, purchasing, budgeting and reporting software to 2,900 organisations, with a focus on Education.
- LocalGlobe has invested £2.4million seed round in Show My Homework, an online homework platform, build by EdTech company Satchel.
- CASCAID, a careers guidance provider, has acquired Moving On magazine, which is distributred to every school, college and sixth form in England.
- EC English, a language school provider, has acquired Kenilworth Language Institute in Ireland.
- French Nursery Group Les Petits Chaperons Rouges has acquired Midlands based Magic Nurseries in their first overseas investment.
Government needs to take its cue on social care funding from outside Westminster
At the end of last year the national papers were getting excited over the government’s announcement that councils could raise taxes by 6% over the next two fiscal years to fund social care. To kick off the New Year, Surrey Council decided to show all and sundry exactly what an ineffectual amount it thought it was and confirmed that it in fact planned to raise council tax by 15%.
David Hodge, the leader of the Conservative council, said: “Demand for adults’ social care, learning disabilities and children’s services is increasing every year. So I regret, despite us finding £450 million worth of savings from our annual budget, we have no choice but to propose the increase in council tax.”
Of course this raise beyond the government cap on acceptable tax increases means the council will have to hold a referendum on the matter, and residents are unlikely to vote for the increase. The move is in all likelihood a publicity stunt to illustrate how dire the social care funding situation is, and no doubt to take the heat off the council when they inevitably have to cut services.
Whatever your view on the Surrey’s move, when a Conservative council tells the Conservative government that they need to do more through such a drastic method, you know things have gotten really bad. Which doesn’t exactly bode well for 2017.
Arguably the most prominent way in which the funding crisis makes itself apparent is through staffing shortages. Recruiting and, crucially, retaining workers is one of the hardest challenges a provider faces and vacancies and churn just push costs up. Convincing people to carry out the tiring and far from glamorous task of caring for the elderly and the infirm for minimum wage is tough. You can earn the same wage and have a simpler work life stacking shelves at the local supermarket.
Recent research by law firm Charles Russell Speechlys (CRS) has suggested that one way to entice workers away from supermarket aisles and into care homes is to adopt an English equivalent of the Scottish carers living wage. From 1 October 2016, carers of all ages in Scotland had to be paid a minimum wage of £8.25 an hour. The national living wage is £7.20 an hour and only for those aged 25 and over.
Of course, for this to work for providers, CRS points out, it needs to be part funded by government. As Surrey Council and the existence of a Scottish carers living wage highlight however, government appear to be deaf to what the rest of the country is saying about social care. It looks like to ensure the whole country gets a fair funding deal then, bigger publicity stunts may be needed in 2017.