I had the pleasure of attending the Anthony Collins Solicitors (ACS) seminar on 24th May – ‘Moving on from the National Living Wage’.

There were 8 interesting and engaging topics on the programme presented by the ACS team as well as input from 2 senior associates from Carterwood, a Surveying firm. Of course initially, the discussions panned through the facts, figures and impact of the Living Wage on care providers, as you would expect – a subject matter we know all too well unfortunately.

One of the topics that really grabbed my interest was ‘Care Business Transactions’, presented by Senior Associate David Lee, a conversation I wasn’t expecting or maybe ready for. A bold discussion based on the buying, selling and merging of social care businesses. Now, don’t get me wrong, I know these conversations have been taking place already and we have seen it happening in reality as some of our members tell us they are now part of a larger group or are considering mergers to enable sustainability of services. I guess until this session though, I was viewing the situation through a different lens, and now I need to wise up, this is becoming more and more common as a ‘solution’. Whilst it may not be ideal, buying, selling, merging is realistic as an option whether we like the idea or not.

The key message was if in the current landscape, the impact of reaching £9 per hour by 2020 means that your business isn’t going to be sustainable, get yourself ready… if you are operating well and finances are fine you should, guess what, get yourself ready. None of us have a crystal ball of course but to be prepared, whatever side of the deal you potentially may be on, is vital. In fact even if you have never contemplated buying/selling/merging it would still pay dividends to be in position to have all the info about your business to hand, today.

David covered 4 key steps, in much more depth than I have here of course:

  • Due Diligence – Be prepared! Before you go to your accountants first consider all taxes and expenses etc. Complete an ‘Information Request’, gather all info.
  • Data Room – Get organised! Get your records and evidence together, be on the front foot as it were.
  • Seller Limitations – Remember, the buyer is in charge… set the boundaries and expectations initially.
  • Goodwill Hunting – The approach doesn’t have to be adversarial. The best way forward is for the buyer and seller to set out as much as possible before getting to the legal teams, agree key terms at the outset.

David mentioned that when buying you need to consider whether it is an Asset Sale or Share Sale. If the former, there will be a change of operator which could mean a change in Registered Manager – therefore the impact on inspection and CQC should be considered. Also, quite rightly, David spoke about the importance of keeping staff motivated post purchase and controlling the purse strings for troubled services.

Another useful session looked at tips for dealing with commissioners. The overarching message was ‘relationships with commissioners remains key’. I echo that 100%, as no doubt you do. I would love ARC England to somehow assist with that and we will take this forward. It was clear that greater responsibility is being passed from the Local Authority to providers and firmly place risks of the NLW to providers. Of course, there is legislation in the shape of the Care Act but the statutory guidance that goes along with it may actually have more ‘teeth’ when challenging commissioning practices and rates…

Also ‘changing workforce terms and implementing new structures’ was very enlightening. There are many options that employers can look at to essentially save money: reviewing staffing structures, paring back enhanced entitlements, introducing a whole new pay model, revising sick pay terms etc. Probably things you have already looked at as the wage bill has increased.

The whole seminar was extremely interesting and I would urge you to attend any future events, this blog really doesn’t do it justice. Going forward, I am sure our members will have the opportunity to tap in to the expertise of ACS in some way.

From the morning it became clear that we can’t really move on from the living wage as such, we have to embrace it and look at working with it. There are options to consider though and actions to be taken. I guess it’s time to have eyes wide open to the possibilities, as uncomfortable as they may seem.

Lisa Lenton
ARC England Director