Care Homes: Insurance Indemnity

Baroness Wheatcroft Excerpts

Wednesday 19th May 2021 Lords Chamber

[Lord Bethell (Con)]

The noble Lord is right to point to provisions for the future and for future pandemics—or any future waves. I reassure him that arrangements are in place to ensure the safe transition of patients and residents from the NHS to care home and back again, but that is not a reason to turn the insurance arrangements of the care home industry on their head. Care homes simply cannot have the kind of risk-pooling arrangements that suit major NHS institutions.

[Baroness Wheatcroft (CB)]

My Lords, huge numbers of care homes are very dangerously financially leveraged, having been bought by private equity over the last decade, when at least £1.7 billion was ploughed into these purchases. Interest payments are heavy and insurance payments going up will add to their burden. Can the Minister assure us that before local authorities pay these privately owned, leveraged care homes, the CQC or some organisation will examine the financial stability of individual homes?

[Lord Bethell (Con)]

My Lords, the financial stability of the care home sector is, as the noble Baroness rightly pointed out, something that we monitor extremely closely. There will, of course, always been new entrants and new departures from such a rich and varied sector. That is not something to be regretted; it brings innovation and new opportunities to the sector. She is right that the potential increase in insurance payments is something that we need to factor in to the finance. That is why we have brought in the designated settlement support scheme and increased the support from local authorities for social care.