Going Strong in Tough Times

To say that the Balhousie Care Group is going through a period of growth would be rather an understatement. Recent or current plans for expansion at the Scottish group include building a 50-bedder in Pitlochry and a 48-bed home in Dundee.

Then there is a 20-bed extension to a home in Arbroath, a 10-bed expansion to the Balbeggie care home and the addition of another 16 beds in Crieff. And there are various acquisitions in the pipeline.

The group has 500 beds and is on the target to have doubled that by the end of next year.

The activity of the past few years indicates the level of confidence that Tony Banks, Managing Director of Balhousie Care, has in the care sector.

‘Families are dispersed all over the world so they can't look after the elderly like they did. As we'll probably have a wealthier elderly population in the future because there are more home owners.'

And with the money comes choice, he says: ‘Care is not a one size fits all.'

Although there is a rise in retirement villages and close-care accommodation, people want options much more than they did in previous generations.

But Mr Banks is also braced for challenges. ‘Funding is going to be tighter and we're going to come under increased pressures because of cost of oil and transportation of goods. There is also the increased minimum wage and the increased holidays. So we are going into tough times.'

For Balhousie Care, one of the biggest challenges during a time of expansion is planning the permission process.

‘It's holding up projects for months and months, if not a year,' said Mr Banks. ‘We have one project that's been with planners for eight months. And that's for refurbishment, not extending.'

Finding the right staff is a perennial issue for the care sector, but even this may become trickier than in the past.

Mr Banks believes the foreign labour that has been so valuable to the care industry may start to dry up.

Eastern Europeans, who have become valued members of staff for care providers over the past several years may now return to their home country. Those who feel they have saved enough money are likely to want to open their own business back home.

The care sector is evolving, as every market does, in response to changes made in society.

For example, green issues are likely to become more important to the care industry, says Mr Banks.

The topic increasingly interests society - banks now advise their eco policy and it is common for local authorities to collect recycling from residents' homes - and this will further drive the trend in the care sector.

It is inevitably easier to ensure new builds are environmentally sound and Balhousie Care is doing this by considering innovations such as heat pumps in the ground instead of conventional heating.

But the group is also looking at its existing buildings, which form the bulk of the portfolio, with measures such as solar panels in extensions.

Heating and lighting costs are Balhousie's biggest expenditure after staff. So, Mr Banks says, adopting energy efficiency measures is good business, aside from anything else.

‘You're always trying to control your largest costs. Some you can't do anything about, but energy is something you can control.'