Economic and environmental sustainability in the care sector

Economic and environmental sustainability in the care sector

Of all the issues facing the care sector, there can be few bigger than that of economic sustainability. If the numbers don’t stack up, providers will fail and others will be deterred from opening, worsening a sector that is already struggling to offer the levels of care required by our society.

According to Markel’s report The Care Sector: Navigating Turbulent Times, 9% of providers feel they are no longer able to continue offering services. This is most prominent among small companies – at 14% and those based in the south-west, where a quarter of businesses feel they are on the edge.

Financial stress

“The care sector is facing huge financial pressures with many local authorities on the verge of bankruptcy, meaning that the provision of care to large parts of the public which is funded by the local authorities is not in a good place,” says Janet Shreeve, founder of Shreeve Care Services. “Providers are being asked to provide more, for less money.” This is being compounded by the ongoing increases in other costs such as office space and staff, she adds.

Anita Astle MBE, managing director of Wren Hall Nursing Home, expresses that “Two-thirds of the people that we support are funded by the NHS, but the funding shortage exists there too,” she says. “About 12% of the funds we get each week have not changed since 2013, and even though the other elements of the fees have had an increment – it’s never in line with inflation. If we don’t keep up with inflation, we’re not going to able to maintain the services we provide.”

"If we don't keep up with inflation, we're not going to be able to maintain the services we provide"

There are ways in which providers can improve their efficiency, however. Markel’s research finds the most common is through investing in technology, put forward by 42% of respondents. Better integration across the NHS and social care is also seen as a positive while having bigger and more specialised providers is cited by 38%. Small firms, with fewer than 10 employees, believe investment in staff training and leadership are the most beneficial options.

The potential benefits of technology

Technology has the potential to alleviate many of the financial pressures care providers are under, says Günter Vos, sales director international at Kepler Vision Technologies, as well as improving patient care. “Technology can save costs from two important standpoints: the care workers and the patients,” he says. “Using AI or other innovative tech can help to free up workers’ time and improve the general mood. With happier staff, you will experience lower labour turnover and save on recruitment.” Technology can also look to do aspects of a job that aren’t possible for humans, he adds, which can lead to higher standards of care and fewer injuries.

The use of digital systems can create more opportunities for different care models, as well as easing the administrative burden. “There are opportunities for blended models of care, with virtual care and technology-enabled care, and talk of AI will continue to increase these efficiencies,” says Lee Gilbert, marketing director at care management software firm Nourish Care. “But the increase in demand is growing at a far greater pace than the efficiencies created by digital transformation.”

Any transformation programme will itself introduce a degree of upheaval, warns Charlotte Rowe, care practice manager at Markel Care Practitioners. “It’s not just about change management or upskilling your staff; change in itself creates risks,” she says. “Any change requires embedding, and as an organisation you need to invest in that.” Conducting a thorough risk assessment ahead of any project is vital, she adds.

Using AI or other innovative tech can help to free up workers' time and improve the general mood

Alongside concerns around economic sustainability are fears that environmental sustainability may have fallen by the wayside, in the wake of both Covid-19 and the ongoing financial strains. But the two issues are linked, as taking steps to improve environmental performance can also lead to significantly reduced expenditure in other areas.

Dr James Crosby-Wrigley, head of sustainability for commercial and industrial energy supply and usage at Advantage Utilities, points to the benefits of an integrated approach to energy management, where organisations only use what’s needed. “For example, more sophisticated heating controls can be tuned to only operate when they are required,” he says. “Additional examples relate to more efficient technology to replace the existing infrastructure. This can be in the form of LED lighting, voltage optimisation devices and modernised heating equipment such as ultra-high efficiency boilers. These all provide quick wins with short paybacks.”

In the longer-term, options that should be considered includ investing in self-generating sources of energy – such as solar panels. “A significant proportion of a care home’s electrical demand can come from solar PV,” he says. “This is a renewable energy generation source with low emissions and within four to five years will provide near zero-cost electricity for up to 25 years.”

More information

Read Markel’s deep dive into the pain points of the care sector.

The Care Sector: navigating turbulent times
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Published on
January 23, 2024