07 September 2007
Modern and personalised social care services will not emerge unless councils offer innovative businesses a secure return on their investment, a report from the Commission for Social Care Inspection has said.
The CSCI's September 4 report Safe as houses? reports on the findings of a study into the drivers of investment in social care services. It finds that investors generally seek a return on their investment within seven to ten years and are more concerned with secure income streams than property appreciation.
'Contracts with local councils, which almost guarantee an income stream, [were] a, if not the, significant element in the investment decision,' the report states. 'In general, businesses with significant council contracts [were] seen as lower risk than those without such contracts and which operated wholly within the privately funded part of the market.'
Market analysts suggested that as much as £250bn worth of private equity investment might be prepared to invest in new services, such as sheltered housing, if the investments were 'safe' enough.
Denise Platt, the CSCI chair, said securing that investment would depend on councils offering the necessary security.
'We've found that providers often rely on councils for contracts, therefore councils need to signal the need for new care services that really meet the needs of people,' she said. 'Where councils lead, investors will follow.'
PFsep2007
