Backing healthcare during coronavirus
Barclays has been supporting the UK healthcare sector for two decades as one of the biggest lenders supporting clients including care home owners, high street pharmacies, dentists, GP surgeries and more. Barclays industry experts Tony Reynolds and David McHattie shed light on how this crucial sector has fared under the pandemic – and why “keeping the lines of communication open” is key to businesses’ recovery.
The coronavirus pandemic has challenged businesses operating in healthcare, and the key workers they employ, in ways not seen in our lifetimes. While those on the front line have been working tirelessly to treat those impacted by the health crisis, others, such as dentists, have been challenged by closures and reduced service, in order to meet government safety guidelines.
There are almost two million people employed in the healthcare workforce in the UK across the public and private sector. Over one million are employed by the NHS in England alone – with healthcare representing nearly 10% of total GDP spending.
The single most important thing, from a banking perspective, is that it’s critical they stay in touch with us. Those lines of communication should be opened
Head of Public Sector and Health for Barclays Business Banking
Tony Reynolds, Head of Public Sector and Health at Barclays Business Banking, says it’s important to not make “sweeping statements” about how the sector is faring, and remember that specific areas have faced varied challenges.
But, for many in the sector, cash flow has been a key issue. Pharmacies have faced these difficulties, Reynolds says, but have been able to stay afloat due to “the retail element of the business” and key NHS contracts, which ensure a regular income stream. However, closures have impacted businesses that require close contact, like dental surgeries, while others that have been able to remain open have found costs for vital PPE and additional cleaning materials a significant demand on resources.
And, even as some businesses in the sector start to reopen, they will face problems – from potential decreases in public confidence in making visits, to reduced capacity in small spaces to adhere to social distancing measures.
Making sure help is on hand
Care homes have faced a multitude of problems, including maintaining necessary staffing levels in the face of the pandemic and obvious concerns around staff and resident safety.
“A lot of the staff are having to stay onsite because it’s not safe for them to return to their families. Their dedication has been incredible,” says Reynolds.
Fraud has also been a major cause of concern: “There has been an issue with a number of operators losing money to supposed suppliers of PPE,” says David McHattie, Head of Healthcare at Barclays Corporate Banking. Alongside health and safety implications, he says care homes are also under cash flow pressure. Put simply, and sadly, many have faced lower occupancy rates at the same time as facing difficulties admitting new residents due to lockdown restrictions.
Those who own care homes have had to adapt their operating models to these circumstances – and also have concerns about how the crisis could impact admissions and staff recruitment in the long-term.
“Our support now is critical to ensure that residents can continue to be looked after safely in their homes, uninterrupted by the pandemic,” says McHattie.
Our support for care homes now is critical to ensure that residents can continue to be looked after safely in their homes, uninterrupted by the pandemic
Head of Healthcare at Barclays Corporate Banking
Where businesses have needed immediate financial support to cover unexpected costs or wages while furlough schemes kick in, Barclays has been on hand to help by facilitating government-backed loans through CBILS and CLBILS, and Bounce Back Loans of up to £50,000. The bank also offers capital repayment holidays of up to a year, and short-term overdrafts for those with acute cash needs.
“Necessity is the mother of invention”
Both Reynolds and McHattie are hopeful that many areas within the sector will recover “out of sheer necessity” once normal life resumes and say that Barclays’ role in supporting the sector in the here and now, laying the groundwork for future resilience, has been key.
“What these government schemes allow clients to do is to try to protect a very short period of cash flow and extend that over a period of time that is affordable to repay, without necessarily affecting their long-term strategy as a business,” Reynolds says.
Thinking about how the pandemic has “forced the pace of change”, McHattie cites a revolution in digital healthcare, with the widespread adoption of video conferencing both in care homes and healthcare settings. A recent report by PwC found that the number of GP online consultations has risen from 10% to 85%.
As lockdown eases, McHattie and Reynolds say monitoring and protecting cash flow should be a priority for those in the healthcare sector. They also urge businesses to be transparent about how they’re coping, citing communication as an essential part of getting the support they need.
“It is better to engage on these issues in advance of problems,” says McHattie.
“The single most important thing, from a banking perspective, is that it’s critical they stay in touch with us,” Reynolds adds. “If they see any signs of pressure, they should contact us and involve us in the decision making to ensure we are properly able to support them along the journey.
“Those lines of communication should be opened, from the beginning of decision making all the way through to the end.”
Case study #1: Chosen Care Group
Ilford-based Chosen Care provides home care to elderly and vulnerable people. Since 2012 it has delivered more than 1,220,000 hours of support to over 250 clients, and six of its staff have been nominated for Great British Care Awards.
Although many clients are happy for staff to continue their visits during the pandemic, uncertainty and anxiety during the crisis have resulted in an increased number of last-minute cancellations.
A CBILS loan, facilitated by Barclays, has helped the company make salary and rent payments during a challenging time, enabling them to continue helping the community.
“The situation the world finds itself in with the COVID-19 pandemic is unprecedented, daunting and quite frankly feels at times surreal and we are grateful for the government backing of the Business Interruption Loan Scheme, and to Barclays for administering this,” says Bala Natarajan, Director and Chairman of Chosen Care.
“The bank’s efficiency in managing our application from start right through to payment of the loan, was exceptional and showed their sound knowledge and insight into our business. The loan will minimise the need to put pressure on local authorities and the NHS, to process our invoices quickly, as they are facing their own administrative pressures.”
Barclays Relationship Director Julie O’Sullivan adds: “Carers are on the frontline in the battle against coronavirus, and it’s important that companies providing care to our community’s most vulnerable receive support as soon as possible. This CBILS loan means that the Chosen Care Group can keep going and keep helping.”
Case study #2: Mi Casa Care
Mi Casa Care, a social care provider based in Mansfield, provides support to clients in the UK and Spain. Although the company had a successful start to the year, the coronavirus crisis meant that increased levels of Personal Protective Equipment were required to keep staff and clients safe.
A Bounce Back Loan from Barclays, received within days of the scheme going live, has supported Mi Casa Care’s cash flow as it makes additional payments for PPE.
Sophia Harris, Director of Mi Casa Care Ltd, said: “When coronavirus started to have an impact, we knew that we had to better protect our amazing care givers with enhanced PPE for the 600 home visits we carry out each week.
“We would never turn away any client and the BBLS funding will help us to continue to buy the necessary equipment to protect our staff and continue to carry out this service. We’re in a much better position now – it’s freed up capital, acts as a safety net and has meant I can stop worrying. My staff are the most important thing to me – anything they need I will try to get them, as it’s the least they deserve.”
She adds: “We’ve always struggled with recruitment, but we’ve seen a real uptake in people coming forward to come into social care and help – people that have never done it before and are currently furloughed and just want to help the community. Social carers are always trying to provide a better service and to see the overwhelming support from everyone towards the sector at the moment is lovely.”