Care group expects to grow

TIGHTER criteria for state funded care has hit profits at an Essex-based care firm's community care division, but its overall trading remains “in line” with its forecasts, it says.

TIGHTER criteria for state funded care has hit profits at an Essex-based care firm's community care division, but its overall trading remains “in line” with its forecasts, it says.

Colchester-based Care UK plc said despite the pressure on public sector funding, it believed its combination of high quality service and cost-effectiveness should enable its health and social care arms to grow.

“As expected in the current economic climate, local authorities and primary care trusts are increasingly adopting tighter criteria regarding the placement and funding of services,” managers said in their interim management statement.

“This is most evident in the community care division where rising eligibility criteria for state-funded care continues to restrict growth despite the policy preference for community-based care.”

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As a result, it had not seen the “normal” second half increase in hours of care delivered and volumes remained at a similar level over the past four months, hitting the profitability of the division, it said.

“Considerable attention continues to be focused on improving the performance of this division and we expect to see recovery to an acceptable level over the next two to three years,” it said.

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Its occupancy and fee rates within its residential care business continued to be “satisfactory”, and two new purpose-built care homes in Slough and Chelmsford which opened in March continued to make “good progress”.

The firm has a new 92-bed care home coming on line in Portsmouth, and planning permission in place for another 74-bed operation in Crowborough, East Sussex.

“Almost 90% of the group's care homes enjoy good and excellent ratings from the Care Quality Commission, making Care UK one of the highest rated care home operators,” it said.

Within its specialist care division, there has been “pleasing progress” in its mental health services and learning disabilities remained “satisfactory”, the company added.

Its health care division continued to perform ahead of the previous year and to exceed expectations, it said.

The group's Clinical Assessment and Treatment Support service in Greater Manchester, which started up in February, has seen a steady growth in patient numbers , although this had been “materially slower” than its original contract projections.

“The sponsoring strategic health authority and primary care trusts remain supportive of the contract and we are working collaboratively with these bodies to increase activity levels,” it said.

It was disappointed with the protracted timetable and complexity of arranging leasehold agreements after the Department of Health announced the continuation of the first wave of independent sector treatment centres, but said it was reassured that payments would proceed as planned.

“We believe that the group's centres meet the criteria for continuity and we are working with the DoH and local PCTs in order to achieve service continuity when the initial contract periods expire,” Care UK said.

The firm said it would be “enthusiastically” entering the debate on the Government's green paper on the future of social care, “Shaping the Future of Care Together”, dealing largely with the funding of care for older people.

The group's net debt at the end of July this year was around �171million compared with �176m at the end of March. It said it had received compensation from the Department of Health for four contracts and expected to agree a final claim shortly.

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