By Brenda Steele:
This article in the Highland Times caught my eye.
Rhoda Grant MSP (pictured) has asked NHS Highland to start daily testing of all care home staff and residents who tested negative at the Skye care home hit by an outbreak of the virus.Home Farm Care Home remains at the centre of the island’s outbreak as 57 residents and staff test positive for the deadly virus.In an email marked urgent to health board interim Chief Executive Paul Hawkins, the Highlands & Islands MSP said testing at Home Farm Care Home should be carried out every day with immediate effect for all the staff and residents who tested negative when mass testing was carried out on 29 and 30 April. Army personnel have been deployed to the Skye after residents died at the care home at the centre of a coronavirus outbreak on the island. Five residents have now died at the care home.
I have a few questions for the Labour MSP about her request to Paul Hawkins at NHS Highland.
What is the turnaround time for testing?
Where is the nearest lab?
Who is going to arrange for transportation and pay the costs?
Does this Labour MSP think that ScotGov and NHS Highland have a magic money tree?
I would like her to bear in mind this is a private care home – part of a large chain – as Talking-Up Scotland Collective readers will know from this
Footnote: the Highland Times report does not mention once that Grant is a Labour MSP. Why not?
Talking-up Scotland 'Albatraz' 
If the owners were as good at setting up company structures that ensured profits squirreled away to aviod tax
Then you should know that all good businesses ensure that within their fiscal structures that their is a 10% contingency fund untouchable and set a side for the purpose of ensuring that the Company can deal with unexpected events survive and come out the end more able to conduct its proper affairs
Why the hell do the clever chappies in the press NOT realise this
Ah but we do know why they are blindsided
Any Hack worth his salt could rip these parasites to shreds in a simple paragraph
And a most apt headline
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I agree with this. I also think there is a general point to make concerning the residential care sector.
Many people thankfully have long been on constant high alert for any intrusion of commercial interests into our national health services. Perhaps after this pandemic, we will all be more informed, alert and concerned about the wholesale commercialisation of residential care for the elderly and the vulnerable. I’m grateful to the TuSC for providing useful insights and I hope they continue.
Whilst there is no charge of illegality here in the commercial model, it remains important to understand more about how and for whom ‘wealth’ is being generated on the back of payments for care from elderly and vulnerable individuals directly and from the taxpayer on residents’ behalf. To what extent is wealth being generated for a ‘rentier class’ focused specifically on the care home sector?
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Following on from posts concerning the commercial business models operating in the care home sector, here are details of recent care home acquisition in Scotland
This report is from 9 March 2020.
Source: https://www.hl.co.uk/shares/stock-market-news/company–news/archive/impact-healthcare-acquires-several-care-homes,-forward-funds-another
We learn here that Impact Healthcare REIT (real estate investment trust) has agreed to acquire nine homes in Scotland from the Holmes Care Group, as part of a wider increase in the former’s care home portfolio. These deals would bring Impact Healthcare’s property portfolio to a total of 99 care homes and 5,253 beds across the UK.
Here in summary are the characteristics of the deal with the Holmes Care Group:
– the acquisitions are on a sale-and-leaseback basis
– the lease is on fixed terms of 25 years with no break clauses
– there will be annual upward-only rent reviews linked to the retail price index, with a floor of 1% per annum and a cap of 5% per annum
– a subsidiary of the Holmes Care Group will continue to operate the homes after completion of the deal
– the net purchase price before transaction costs was €47.5m
– the initial rent is €3.5m, reflecting a yield of 7.4%.
At the time of the above report completion of the transaction awaited regulatory approvals from the Care Inspectorate.
It appears that long term sale-and-leaseback transactions are a common practice in the sector with financial intermediaries like Impact Healthcare REIT prominent.
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The amounts should be in pounds sterling.
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If every care home in Scotland had the same rates of infection and deaths,you might argue that there has been a systemic failure by the care inspectorate and that would definitely be a direct responsibility of the SG to rectify.
Some care homes have suffered more than others and the failures are probably down to local management.
At the very least,there is a case for the inspectorate having more powers and the ability to remove licenses from under performing care homes.
Care should not be just a business opportunity and we need to address these failures in future if we really do care about how our elderly see out their lives in a reasonable manner.
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So today, thanks to the TuSC’s content, I have been prompted to learn about REITs! Apologies to those that know all this already.
Impact Healthcare is a London Stock Exchange-listed, health focussed real estate investment trust (REIT). Its annual report for the year ending 31 December 2019 notes profit before tax of £26.3 million. It then explains that:
“As a REIT, the Group is exempt from corporation tax on the profits and gains from its property investment business, provided it continues to meet certain conditions as per REIT regulations. For the year ended 31 December 2019 and the year ended 31 December 2018, the Group did not have any non-qualifying profits except interest income on bank deposits.”
What are REITs? These ‘real estate investment trusts’ are described as ‘tax efficient’ property investment companies. They were first developed in the USA but were introduced in the UK in 2007. And yes, a REIT’s profit from its property rental business is, with certain conditions, except from corporation tax.
Source: https://www.pinsentmasons.com/out-law/guides/tax-treatment-of-reits
“Profits and gains of the tax exempt property rental business will not be subject to tax in the hands of the REIT. Profits and gains from any other activities carried on by the REIT remain subject to corporation tax in the normal way. The company will be treated for tax purposes as two different entities – the tax exempt property rental business and the non-tax exempt business. Special rules apply to how income and expenditure is divided between the two businesses.”
Essentially tax liability relating to profits made by the REIT on property rentals is transferred FROM the REIT itself TO the investors in the REIT, based on the dividend payments (the ‘distributions’) these investors (corporates or individuals) receive.
“Distributions from a REIT in respect of tax exempt business are known as property income distributions (PIDs). UK-resident individuals will be subject to income tax on PIDs at the normal rate of income tax, with a current maximum rate of 45%. Corporation taxpayers will be subject to tax on distributions from the REIT at the normal rate of corporation tax rather than being exempt from tax on dividends. For both individuals and companies this is higher than the rate of tax paid on dividends, but as the REIT itself will not be subject to tax there should be more income available to distribute.”
Impact Healthcare REIT has zero employees: “As an externally managed business, the Group has no employees and therefore does not require any employee related policies.” Its annual report for 2019 can be seen here:
https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=sl.ra.full&id=cd00f642-c8ba-43d9-93f4-217a63a79e98&user=HZfNkLoiKn4yX5UY42XBHZGc5K80af9UMf0kSlrJLE7GYeVk%2bcsmdOYCxcOGsBVy&r=1
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I learned during 2014 that reading the risk register in annual reports of notable companies sometimes provide ‘interesting’ insights. So upon ‘discovering’ the existence of the company Impact Healthcare REIT today – a major commercial investor in care home properties – I located its most recent annual report (published in April 2020), and had a look at its risk register.
In the context of the corporate media’s pressure on the Scottish Government’s position over discharging patients from hospitals to care homes, I think it is notable.
The risk register recognises this: Risk – Pandemics/ Probability: high/ Impact: major
It then states:
“The immediate risks of an outbreak are REDUCED OCCUPANCY at care homes and the lack of availability of key workers at the care homes as a result of infection or a requirement to self-isolate. (my emphasis)”
“Should a pandemic take hold and not be capable of being contained, it could compound and enhance a number of principal risk, not least general economic conditions, default of one or more tenants and ability to meet our financing obligations.”
And then most interestingly, on ‘mitigation’: “As the NHS prepares for a continuing and growing outbreak of the COVID-19 pandemic, our tenants have noticed AN INCREASE IN DEMAND FOR BEDS as the NHS seeks to relieve pressure on hospitals. This INCREASE IN DEMAND COULD HELP MITIGATE THE EFFECT ON REDUCED OCCUPANCY if an outbreak occurs in a care home.”
So have I got this right? This major care home investor sees increased take-up of beds by people discharged from hospital to a home with a Covid-19 outbreak as a positive (mitigating) factor to counter reduced occupancy in these homes due to other, unspecified causes.
Not quite the message being communicated by the corporate media when criticising government for these transfers! And why a silence on this beneficial ‘mitigation’ from the commercial care home sector?
(Link to Impact Healthcare REIT’s annual report: https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=sl.ra.full&id=cd00f642-c8ba-43d9-93f4-217a63a79e98&user=HZfNkLoiKn4yX5UY42XBHZGc5K80af9UMf0kSlrJLE7GYeVk%2bcsmdOYCxcOGsBVy&r=1 )
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Aye! Come what may, business is business……..
When will ordinary people get the message that ANY private company exists primarily, and frequently only to make money for its investors? That is why there are ‘companies’ at all .
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“real estate investment trusts”…were first developed in the USA but were introduced in the UK in 2007.
UK Government 2007 = LABOUR
UK Prime Minister 2007 = The Clunking Fist himself, Gordon Broon
Says it all really that that PFI loving Mercenary BritNat prick allowed these to be legal in the UK!!
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This thread, as in many others, shows how ordinary individuals can pretty quickly get information on companies.Is this not the kind of things the “ACE REPORTERS” in our media are supposed to be able to do?
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Citizen Journalism in practice.
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