Kevin Beirne, One Housing Group Director of Housing Care and Support, which recently entered the luxury care home space with its Baycroft brand, says it is his mission to answer elderly housing needs right across the board.
CHP: Can you tell us a little about your background?
KB: I am an interesting person in that I have only ever worked in the property and healthcare space. I did a degree in Geography where I got really interested in the built environment. I then went onto Oxford Brooks Estate Management school and spent two years there as a post graduate. The second year I spent part time at a local housing association. I did a dissertation on specialist health related housing.
I have been in the sector ever since so it’s by vocation rather than by chance. My career progression has been based on how do we develop specialist healthcare assets that are viable, attractive to investors but are actually game-changing in terms of the health pathways we work with?
CHP: Can you tell us about One Housing?
KB: We are a housing association with an asset base of about 17,000 units from ordinary homes to healthcare-focused properties in London and the South East. We have just opened an extra care facility under the Season brand in Walton-on-the-Naze, Essex and we have opened up an extra care scheme in Orpington, Kent. We are also about to conclude on a site in Tunbridge Wells for a Baycroft care home scheme. We have about 2,500 units in Berkshire.
We are financially independent in that we have understood that in order to provide affordable and charitable homes we need to make some money. It’s much better to have your own money than to rely on the state as it allows our Board and Trustees to make independent decisions about where we want to be.
CHP: How do you reinvest the profits generated by Baycroft?
KB: About 35-40% of our turnover is in the healthcare space. If we build about 1,000
properties a year, just slightly more than half of those go into the private area be it for rent, for our Baycroft care homes or for general private sale. The returns we can make from that help us mix in affordable products, such as Season or our social housing, which our lenders are happy to support us on.
Our strategy first and foremost is to look at unmet need right across the spectrum in the senior living market. I am a protagonist for increasing senior living options right across the market, which are currently desperately lacking. I think it’s sensible for organisations such as ours to try and create a mixed portfolio. It is important to remember that having needs in relation to being older is both tenure and wealth non-specific. We all get older and we all develop needs so it’s important to not define yourself by the wealth group but the type of needs you want to meet and then think about some of the price points that you will do that across.
I like to think of us having a mixed portfolio rather than one cross-subsidising the other. We have learnt that when your product is geared towards hospitality your offering is going to be geared towards slightly different price points and sometimes it’s good to give those in slightly different settings in order to give people what they really want.
CHP: How real is the looming crisis in elderly housing capacity?
KB: It’s very real. The challenge we face now is greater than it has ever been throughout my 25 year career in the healthcare property space. The elephant in the room is our ageing demographic. We have not really properly grappled with how we care for our ageing society and time is running out. The JLL has revealed that we need 70,000 new beds in the next nine years. We are looking at three to four years to open a new care home. It’s really quite a steep challenge to face. I think that number might well be an underestimation because of the way the demographics may pan out.
We are probably going to see an acceleration of providers falling out of the market. It’s not just about need it’s about what consumers want. Unfortunately, a lot of the stock we have won’t quite satisfy the aspirations of older people who are now more consumer focused. That’s reflected in the ethos which we have across Season and Baycroft – that your last home can be your best home.
Our customers want to buy what they like. We are absolutely committed to meeting needs right across the spectrum of wealth and need. The great thing about being a housing association is that rather than having a discussion about affordable or private, I like people to see us as a trusted organisation which is in it for the long term. We are not here to make a profit today in order to satisfy one position. We are here as long term managers and custodians and operators. It’s a misnomer to say public and private, I am interested in being a long term quality operator. We are a member of ARCO and everyone there sums up that position.
CHP: Obviously demographic pressures are particularly acute in the South East. Do you see One Housing as being a key player in relieving that pressure?
KB: Absolutely, it is incumbent on all providers operating in this space to step up to the plate in meeting that challenge to provide that extra 70,000 units. We have gone from no care homes to nine care homes in development in about two years. You have to be ambitious in this space. Nine homes is still a drop in the ocean compared with the overall target but it does show real ambition on our part. But it’s also not about just counting beds but counting the delivery of products that change the market in a way so that our elderly are seeing care homes as a positive choice rather than being a choice that is made for them as a result of the healthcare system.
CHP: I was very impressed with the level of innovation and technology you had in your new Baycroft home in Orpington. Is that something you see as differentiating yourselves from the competition?
KB: Right across the Season and Baycroft propositions we have been working hard with our technology providers, which are mainly Tunstall and Chubb, to try and look at how we can integrate technology into not just our care offering but also our hospitality offering to make sure that our staff have got the best kit in order to work with people on a really person-centred basis.
It’s great to see dementia in a positive rather than a negative light. My heart is uplifted by how we can offer a positive experience by investing in equipment such as our Tovertafel table which is delightful to look at and to work with and which gives a real lift to the residents and the staff working in a home. I’m really quite excited about the sort of technology we are able to invest in. We are seeing a lot more customers coming to us with dementia care needs and I’m excited about how we build on our dementia care to give those residents the best possible care. We have just opened a dementia unit in one of our Season village homes in Haringey.
CHP: Do you intend to keep the Season and Baycroft brands distinct?
KB: Yes and no. Having differentiated brands does allow us to focus on the specifics in that particular market rather than having a one-size-fits-all. We are looking at how we fill the gap between Season and Baycroft – we are calling this project ‘Seacroft’ at the moment. It’s about stepping up the customer experience in Season. We are proud of how we have reinvented the social housing or lower-middle income space there but how do we bring a bit of the Baycroft magic into Season?
The really big prize is opening up the retirement housing lower-middle income market because that’s where all of those home owners are. Seacroft is about bringing a touch of luxury into that mid-market in a retirement housing proposition. We are looking at villages under the Baycroft model but we also want to extend the Season offer into a much more mid-market space. In our last Season scheme in Wallingford, Oxford, 14 shared ownership units sold out on the first Saturday morning. Clearly there is real pent up demand for appropriately valued home ownership with independent living opportunities.
CHP: What is the split between social housing and private pay in Season?
KB: It’s about 70:30 social: private at the moment. That trend is moving to less publically paid for and the number of people coming to us through our own marketing activities is increasing. Lots of LAs are having to up the bar in terms of assessing who gets what. It looks as though the number of people in the publically funded space may be reducing. Pressure is more concentrated in the private space.
We are working towards ensuring there is more consumer acceptance in terms of understanding what a retirement village is. There’s a world of difference between an operator led retirement village and a housing developer who will leave the scene as soon as they have sold 75% of the flats. We have to try and help educate the market about the difference.
CHP: What is the One Housing model for retirement living?
KB: It’s around 80-120 units with a strong lifestyle offer. It has to be customer led. We provide really great care and are proud of that but our customers tell us that is pretty much a given with us at our Season and Baycroft brands. They are looking for something over and above great care, including a restaurant and opportunities to meet and socialise with people. Loneliness is one of the biggest single factors that our customers want to address. And there are other lifestyle opportunities that make it different from the traditional sheltered housing model. They want great care to be available but they would like it to be discreet.
CHP: What kind of care services will you be providing?
KB: We provide all of our care services ourselves. We have a big care division. We have our own quality and CQC focused service development division. I was looking at one of our schemes the other week – Tile House – which has an NHS platform in King’s Cross. They are providing 26 hours of care a week in two-bedroom flats in a village setting. That’s as much as you would get in a hospital. We can cover the whole base. For 99% of our customers we can provide all the care they will need right through to end of life.
CHP: Are sites easy to find?
KB: I went to speak to the CLG planners at the Future of London Forum recently and told them we were really disappointed that time and time again local planners don’t properly account for the needs of older people. There are hundreds of pressures on LAs, but if I was to pick a top three that I would police LAs on, making provision for older people would have to be among them. It is high time that the CLG made sure no local plans got signed off that didn’t include proper provision for older people.
It really disappoints me when I hear LAs talk about wealth depleters and importing older people. That’s simply not the case. Typically our older people move no more than 3 miles. This is about looking after the older people you already have in your locality. If we don’t do that we are failing them and we are going to create insurmountable demand on the healthcare system.
CHP: Where do you see your retirement living model going in terms of rental or leasehold?
KB: I think there is an opportunity to expand the rental market whether that’s straight forward rental or some form of lifetime tenancy which we see in the US. If you look at some of the market pressures and the context of inheritance tax and how people want to invest in later life, then clearly there is an opportunity but that is set against a culture which is focused on owning your own home.
There’s a market shaping job to be done in terms of bringing things to the market. Our challenge is to locate those opportunities by understanding what our customers want and begin to introduce some products and see how they fare. Where products are doing well, that’s where we should invest more and where they’re doing poorly the market’s telling us that not what they want. We must avoid at all cost trying to assume that our customers will buy something because it suits our capital structure. It’s about shaping capital structures around that not the other way around. If we get it right then we could really be into unlocking that market volume in the middle market. Clearly there is significant potential for growth in retirement villages.
CHP: Can you tell us about your partnership with Octopus?
KB: Through their MedicX fund, Octopus brought the Orpington Baycroft scheme to us. We are always looking to work with organisations we feel share our value base. Octopus is a really respected organisation working in the heathcare space. They are solid and financially dependable but mix that with being forward looking and innovative. They have huge experience in bringing this sort of proposition to the market. We are looking at whether the retirement village model might work for our partnership.
We are also working with Castleoak and Frontier and developing some schemes with our own core One Housing funding and development. I think the investment sector sees our strength because of our long term strategy and our balance sheet. We are a sensible investment for the institutional investor looking for a long term programme. It gives them a sense of confidence.
CHP: Going forward how do you see your offer developing?
KB: We want to be focused on our family of residents and providing an environment they can enjoy and feel comfortable in. We want to get to a position where the youngest members of the family are nagging mum and dad to see gran at the local care home to spend some quality time. We want to focus on really high quality care with a great workforce. We want to have great staff faculties. We are working as hard as we possibly can to ensure that we are offering our staff a good financial deal. We recognise that the employment challenge is one of the biggest that we have.
CHP: How do you make Baycroft and Season an attractive place to work?
KB: Our managing directors have been leading a road show. They have spoken to almost every care member of staff in the last 12 months, representing over a 1,000 people. We have our annual Best Companies engagement survey going around. We want to listen to our staff in the same way that we listen to our customers. If that means we have to offer a little more then so be it as I have no doubt our EBITDA will improve as a result. We are looking at an annual guarantee in annual cost of living increases. Our staff want to have certainty in terms of the hours of work and their contractual relationship.
CHP: Do you have zero hours contracts?
KB: We have very small number of flexible workers. We don’t really have zero hours contracts. Our flexible workforce is less than 8%. They are on quite generous contracts. We want to take responsibility as an employer, whether you work on a flexible basis or whether you work full time or part time, and play our proper role as a good employer. There’s a range of staff benefits that we want to bring that people can buy into, including flexible leave arrangements and using our buying power to help people access different markets. We want them all to feel that they are at an organisation that is going to value them the most because we expect and demand the highest level of care. All of our care homes are at CQC Good and our customer service is excellent. We can only expect that if we are investing in our staff in the right way.
CHP: Are you finding recruitment challenging?
KB: We have created a campaigns-based recruitment programme working with a company called Solutions Driven. We are really excited about the number of local people we have picked up, including those who have maybe dropped out of the workforce. We are quite encouraged about the trends we have seen in terms of who we have been able to bring onto the workforce. Nearly a third of our Haringey workforce can see their scheme from their home window. That creates a real sense of community and a real sense of buy-in and makes the care facility a great asset to have as an employment hub rather than something that is not necessarily seen in the most positive light because it’s not somewhere you’d choose to go.
It’s all about making ourselves part of the local community. The employment offer at one of our villages offers some interesting career paths, including hospitality, facilities management, care and property management. There are some good careers to be had in some parts of the country that have not always had the best employment prospects. We were talking to the Isle of Wight LA recently who are strategically investing in this area. They see it as a great opportunity to keep people in the local community who otherwise may have moved away.
The same kind of marketing and campaign-led strategy that brings customers to your door is also the way that we can spread the word that this is an employment opportunity. It’s very much about assessing staff on the basis of their latent and potential talent rather than having to have an experience based process. We are investing huge amounts into training our workforce. We’re really interested in the mind set of our staff.