11 April 2019

How can planning policy help tackle the under-supply of care homes? By Martyn Jenkins

Recently I have been looking at how the UK’s ageing population is increasing the demand for care homes. Worryingly, against this backdrop, the care home market is facing a wide spectrum of challenges which as we highlighted in our last blog, has led to an acute shortage of bed spaces across all English regions.


So, what can be done to help address the imbalance?

Now this is where it gets difficult. Sketching out the problem is one thing. Coming up with solutions is a little trickier.

While there are a number of social and financial issues to consider, I have identified three potential ways that planning policy can tackle SOME of this imbalance, given that it is clear there is no silver bullet solution.

1. The use class system and planning policies are constricting care home developments

As an economist, and someone who is relatively new to planning, one element of planning legislation strikes me as a constraint, which, through some minor policy alteration could be resolved. Local authorities also have a role to play.

Currently care homes do not have a definitive use class, treading a fine line between Class C2 (residential institutions) and Class C3 (dwelling houses). Typically, whether care homes fall within one of the two classes depends on the type of accommodation physically built (i.e. whether individual units are self-contained or are shared facilities) and the level of care provided.

For example, a traditional residential care home where residents benefit from meals and shared facilities would typically fall within a C2 use. However, what is not as clear cut are schemes where residents have self-contained accommodation but benefit from communal facilities and can choose to receive differing levels of personal care.

This ambiguity throws up issues throughout the planning process…

Firstly, disagreement over use class between local authorities and developers can lead to planning appeals and costly delays, hindering the delivery of such schemes.

Moreover, the two use classes have different affordable housing requirements. Affordable housing is often sought by local authorities for C3 schemes, but rarely for C2 schemes. There is a grey area for schemes that offer optional care packages.

The categorisation of a development falling within a C2 use class instead of C3 therefore has significant impacts on the viability of the scheme.

Planning policies could also be better written with the needs of different care home providers in mind. In my view, such schemes should not be required to provide any affordable housing because the national crisis in delivering accommodation for the elderly outweighs any other planning factors. However, this requires direction from the Government through revised national planning policy.

Change is needed because the current system is unclear, delays applications, and in some cases, can prevent schemes coming forward altogether. It does not facilitate the development of care homes as much as it could or as quickly as our research suggests they are needed.

A potential solution: Create a separate use class (say C5) for the development of all care home schemes, regardless of the level of self-containment and care provided. Then revise national and local planning policies to absolve such schemes from providing affordable housing. This will avoid any ambiguity, prevent costly delays and generally improve delivery.

2. Local Authorities need to take the initiative

It is clear there is a wider need for policy led action to tackle what is a growing national issue.

The National Planning Policy Framework (NPPF) requires local authorities to objectively assess the need for specialised accomodation (eg care homes) based on a number of factors such as demographic profiles and market signals. However, it fails to provide clear recognition of the severity of the current situation and the urgency needed in addressing it. As a result, many authorities aren’t going far enough to address the imbalance between demand and supply.

This theory is backed up by research by law firm, Irwin Mitchell who found that two-thirds of local authorities have no elderly accommodation policy or site allocation for such schemes. And less than 10% have both in place.

This begs the question: do local authorities have clear policies for addressing the housing needs and requirements of older people? In short, for most, the answer is no.

Local Authorities therefore need to take the initiative and go beyond the limited guidance provided in the NPPF and remove the barriers to delivery. This will also help address competition for land between open market housing and specialist residential care scheme providers, as well as removing the need to demonstrate the principle of these schemes in policy terms.

A potential solution: Create a national “care home obligation” for all local plans to allocate sites for elderly accommodation. This will go further than the current NPPF requirements. 

3. A mind shift is needed

Underpinning any action to meet the UK’s need for care homes is an understanding of the housing need of our ageing population. This, in my opinion, requires a mind shift amongst those in public office, away from a focus on younger generations and towards those of older age for whom which policy has been somewhat left behind.

Indeed, the Government has committed to help those at the beginning of the property ladder with initiatives such as the ‘Help-to-buy’ scheme and stamp duty relief for first time buyers. But proportionally little has been done for those at the other end of the ladder. In fact in many cases, constraints in public sector funding has only compounded the growing issue, with a study by the Competition and Markets Authority highlighting a £1bn shortfall in public sector funding for care homes.

While it is clear young people need help to get on the property ladder (believe me I am one of them!), we cannot continue to neglect the housing needs of our ageing population. Policy needs to be tailored towards the support of older residents too.

It should also be noted that the provision of specific elderly accommodation can have beneficial effects in relation to the overall housing crisis, as it may free up existing family housing stock through elderly residents down-sizing into “assisted living accommodation”.

A potential solution: The government should commit to tackling the current imbalance by ensuring that in addition to the annual housing delivery target of 300,000, a further 50,000 is allocated to the development of specialist accommodation for older age groups. With almost a quarter of the population set to be over 65 by 2039, this should be a priority for government.

Summing up

As alluded to, there is no overall quick fix to what is a highly complex, and often emotive subject. However, given the demand for care is only going to get progressively higher as the UK population continues to age, it is fast becoming imperative that action is taken across government, society and those in planning.