Speaker1: [00:00:00] That's an outright lie. They're not doing that. Never be afraid to surround yourself with people cleverer and more able than you. It's not illegal. It's all politics. Care homes will close. By not excluding social care, they've shot themselves not in one foot, but in both feet. There is nobody with any business experience. The benefit to the NHS would be huge. Care home business is about people and property. They're not in listening mode. We need more funds to the front line, not more civil servants. That's the last thing we need.

Speaker2: [00:00:32] Voices of Care, the healthcare podcast.

Speaker3: [00:00:37] Doctor Robert Kilgour. Welcome to Voices of Care. It's been a long time since we've wanted you to come on board because we're really keen to talk about Scotland. So thank you for making the trip to see us today.

Speaker1: [00:00:48] It's a pleasure to be here. Looking forward to it.

Speaker3: [00:00:51] I wanted to kick off with the scene. Your view of social care in Scotland? The budget, a couple of months ago was lauded by the finance minister as a record investment. You've gone on record as saying that the sector's sleepwalking over a cliff edge. You can't both be right.

Speaker1: [00:01:11] No. Well, I think, the sad thing is the demographics for the sector are really, really good. But obviously the perennial problems staffing and funding. And that is the same in Scotland. The two key issues and problems. The same as in England. But one of the things that certainly in England, when the government ministers say, oh, we're putting an extra 880 million into social care. They're not, that's an outright lie. They're not doing that. What they're doing is giving local authorities 880 million for social care which includes children's services. That's quite a large chunk of that 880 million. And also it's not ring-fenced. So as happened during the pandemic, money given. And I had these arguments with Rishi when he was chancellor, about, oh, but I've given 3 billion to social care. You haven't Rishi, because you give money, governments give money to local authorities and they have loads of leaky buckets all over the place. And by the time it does get to the front line of social care, it's a vastly smaller number. And anyway, even if all that, every single penny of that 880 million got to the front line, it's still woefully short of what's needed. And they know that.

Speaker3: [00:02:47] And that's the surprising thing because again, going back to the Scottish budget, 21 billion I think was the number that was lauded around health and social care, Scottish Care Chief Executive, I'm sure you know, Donald Macaskill has talked about the fact that it's a betrayal of the sector.

Speaker1: [00:03:03] Yes. Well, I mean, both the budget in October, UK budget and the Scottish budget. I mean, care homes will close and vulnerable elderly will die as a direct result of these budgets.

Speaker3: [00:03:21] Basically the addition of the employer's National insurance.

Speaker1: [00:03:25] Yes. Well in England, there's a triple whammy. There's the National living wage issue, which is less of an issue in Scotland and which I'll explain in a second. And then you've got the double whammy on employers' National Insurance, where the increase of 8.7%, of 13.8 to 15, we keep talking about it being 1.2%, and I hate that it's 8.7%. But the biggest kicker is the lowering of the threshold from 9100 to 5000. And the three sectors hit the hardest by that are hospitality, retail and care. And it really, in England I think it was it's 12.5%, 13% added costs from the budget. And yet I've seen some local authorities in England not that I have care homes currently in England, but I've seen some give no increase this year and it varies between one, two, three, some three and a half. I think the highest I've seen is one in Wolverhampton that was 6.6%.

Speaker3: [00:04:41] So way less than the burden of additional costs. Now you hinted earlier Robert, it's very similar the demographics and the market in Scotland. But there are some distinctive features of the Scottish social care market. I wonder if you just briefly...

Speaker1: [00:04:56] Well, there are less private funders, for example, in Scotland than in England. That's a fact. Particularly obviously compared to, say, the South of England, but Renaissance Care, for example, we operate currently 19 homes across 11 different local authority areas out of the 32 in Scotland. And we have 900 registered beds and 1500 part and full-time staff. Now we have 70%. We are a private business, but we have 70% of our residents are local authority residents and 30% are private funders. So we are a private business, a private company, but we are in the main providing a public service. Incidentally, at about half the cost per resident per week that Scottish local authorities spend of taxpayers' money on running their own care homes.

Speaker3: [00:06:03] Now, that's an interesting point because the commissioning issue is one that's big here in England. But looking at Scotland again, someone not renowned for mincing their words, I think you've talked about rank hypocrisy in terms of the commissioning in Scotland with the fee rates.

Speaker1: [00:06:20] Well it is. And also there are a higher percentage of care homes in Scotland that are local authority-run. It's about 15-16% of care homes in Scotland are either local authority or NHS. It's mainly NHS Highland because Highland local authorities don't run the care homes, NHS Highland do. And 84-85% is...

Speaker3: [00:06:47] Independent sector.

Speaker1: [00:06:48] Ah well, are they independent and voluntary sector combined? Now that's much higher than in and actually on the National insurance employers, national insurance, those same local authorities that are running at in fact about £2,000 per week per resident when they're paying us £960 a week. So double the cost, more than double the cost per resident per week. They're going to get fully refunded for the extra employers' National insurance effects. Both the 8.7% increase from 13.8 to 15, and also the effect of the lowering of the threshold. They're going to get extra money to pay for that. But we're not even though we're providing in the main a public service.

Speaker3: [00:07:41] And you're getting paid half the rate. How is that not a scandal?

Speaker1: [00:07:47] Well, I've had a KC look at it recently at not inconsiderable cost to me personally. I just decided I needed to do this. But is there a case for a judicial review because particularly the Scottish Government are funding extra money to already profitable, if you like, local authority care homes. They're giving them extra money for the employers' National insurance increases. And yet they're not doing that for us who are providing a much better value for money for taxpayer service. And the KC's opinion has come back saying it's very unfair, very wasteful of taxpayers money. That's for the auditor General to look at. But it's not illegal and not worthy of judicial review, which we're still trying to tweak a little bit and going back on a couple of points, but it's not looking healthy in that regard. But I am planning on further outing this disparity, this difference between what the Scottish Government are funding local authorities and what those same local authorities funded by the Scottish Government, are funding us.

Speaker3: [00:09:12] For the same service.

Speaker1: [00:09:13] For the same service. And it's something that in England there's a smaller percentage of care homes that are local authority owned and run. But in Scotland it's bigger. And so, you know, we're competing with and who is commissioning beds in our care homes locally. It's the same local authorities, so they're obviously going to fill their own care homes first, which is another imbalance. So there's quite and then there's the perennial, I mean, this I know it's a bigger number in Scotland. Sorry, in England, but in percentage terms I think it's a bigger percentage in Scotland where the bed blocking in NHS hospitals in Scotland it's about 2100.

Speaker3: [00:10:05] They're record numbers.

Speaker1: [00:10:08] In Scotland, which on a percentage basis is probably higher I think than in England. And that's four and a half to five times more expensive per person per day bed blocking somebody in hospital, as opposed to them being at home with a home care package or in a care home. Now it's a double tragedy because not only for you and I as taxpayers, is it four and a half, five times more expensive for these 2100 people that are clinically, unlike in Germany and Japan, where by law, if somebody clinically no longer needs to be in hospital, a place has to be found for them in the community or in a care home. That's not the case in the UK. And you get this territorial budget fighting between the local authorities saying we don't have the money. We'll leave this person in hospital and NHS desperately trying to get them out. And what that means, not only is it bad for you and I as taxpayers, arguably more important, it's bad for the person in hospital because that, well, receiving the care. But they're no longer receiving the care that is best for them, because what's best for them is to be out in the community, either with a home care package at home or in a care home. And then what happens is they deteriorate while they're in hospital, waiting to be assessed and to be found a placement and invariably they deteriorate so much in a matter of weeks or a few months that they're never going to come out of hospital and they die in hospital.

Speaker3: [00:12:03] And I mean, that's an immense tragedy. You've also talked about the effect just to go back to the social care financial impact. I think Public Health Scotland produced a report in 2023 highlighting the fact that 1 in 5 care homes in Scotland had closed in the previous decade. You've used the word a tsunami of care home closures. I guess that's your prediction still?

Speaker1: [00:12:26] Well, my prediction, if we see, as with defence overtaking social care as government priority number one, I see little or no chance of Rachel Reeves softening, not backtracking or excluding social care from the employers, National insurance changes, but even some kind of delay of part of it by 12 months would smooth and reduce the number of care homes that are going to close. But my worry is certainly in Scotland, second half of this year and the first half of next year, I think is going to be a lot of care homes that are going to close. In fact, some of my friends that run small care home groups have been saying to me that if there's no change, even softening a little of the employers' National insurance changes and we get what we suspect will be a 5 to 6%, but nothing more increase in but that's to include national Living wage increases too. So nothing really for employers. National insurance increases, and the 1 or 2 friends of mine with small groups have said they're going to have to go cap in hand to their bank because they will be likely to breach banking covenants.

Speaker3: [00:13:56] Which puts them at significant risk.

Speaker1: [00:13:57] Because of the effect.

Speaker3: [00:13:59] Of the debt ratio.

Speaker1: [00:14:00] Of the employers, National insurance twin increases and the small fee increase. And because of the higher percentage, as we talked about at the beginning of local authority residents in Scotland, generally to private funded residents, and that has a bigger effect. And I don't think there's any business, a political point, I suppose, but it's all politics. But actually it should be about people, not politics. But sadly it is. But when you look at the current Labour Government frontbench. There is nobody with any business experience unless you call somebody who's business secretary that's a trainee solicitor and you know that.

Speaker3: [00:14:53] A long time ago in my memory.

Speaker1: [00:14:54] A long time ago. But you know the difference between a fully qualified solicitor and a trainee solicitor, but the person in charge of the business department in cabinet doesn't. And there's nobody on the Labour front bench who has any business experience whatsoever. They have no idea of what we deal with day in, day out which is very disappointing, very sad. And they also have no understanding of I mean, Rachel Reeves has said we want and need these changes to businesses, employers, National Insurance to raise the 22-24 billion to reduce NHS waiting lists. Well, by not excluding social care. They've shot themselves not in one foot but in both feet, because what's going to happen is care homes are going to close and they have no concept of what that means when a care home closes.

Speaker3: [00:16:00] The burden on the NHS.

Speaker1: [00:16:01] What happens is there's more bed blocking, there's more cancelled operations, and there's larger NHS waiting lists. So they've shot themselves in both feet. And so and one of the things which when you look at the care home beds that are closing year on year and you look at the number of care home beds that are opening, new care home beds are opening, There are more closing than opening, but it's not a massive gap. And I think, well, yeah, it's an issue, but it's not. But you need to drill down more into that because the vast majority of the beds that are closing are local authority-funded residents, and the vast majority of the beds that are being built are private funders. And when you look into that, and it's the local authority ones that then lead to more bed blocking, more cancelled operations, longer NHS waiting lists.

Speaker3: [00:17:04] So it's a hell of a time bomb. You mentioned the Labour government and they have gone on record, of course, you know, with the commitment to potentially at some point create a National Care service. And I want to talk about that because Scotland's independent review of adult social care, Derek Feeley. A former First minister, Nicola Sturgeon said the creation of the National Care Service was the most ambitious reform since devolution. I think you regarded it, you called it a grand marketing exercise.

Speaker1: [00:17:33] Well, the National Care Service is an interesting one. Actually, you mentioned the Feeley report, which I engaged with, and I thought there were a lot of good things. There were a lot of good things in there. But the National Care Service I welcomed initially and said, if this is to be a genuine attempt to get more funds to the front line and improve care at the front line, then I'm all for it and all for engaging with it. But if it's a grand marketing exercise for having a nice line in the next SNP election manifesto, then I'm not for it. And you got to the point where Unison, GMB, Scottish Care, COSLA were all in total. I mean, that's quite a unique achievement by the Scottish Government to get all these bodies in complete agreement that it was badly thought out, lacking in detail, and was really all about central control away from local authorities. And they have spent £30 million on this without one single hour of extra care being delivered.

Speaker3: [00:18:55] And of course, Maree Todd was very excited about it back at the Glasgow Science Centre in October 24, and of course, it's now been scrapped.

Speaker1: [00:19:04] Well, I think she's on maternity leave at the moment I think. But yes it's been, it's been scrapped but I really despair at the attempts to set up a national care service when they didn't engage with the stakeholders, they failed to engage in a meaningful and serious way with the stakeholders. When stakeholders were asking for details and whatever to say, oh, look, you know, trust us, we'll get the detail. We'll deal with that later in the detail. These are the people that can't build two ferries. You're not going to trust them to work out the details later.

Speaker3: [00:19:53] And I guess then quickly pausing there on that debacle, given the fact that it was promoted so significantly, some key lessons, I guess, for England, Wes Streeting's ambitions for a national care service. Engage with the stakeholders and provide detail.

Speaker1: [00:20:11] And what we need is more funds to the front line which needs it now. Not in a few years time. We need more funds to the front line, not more civil servants. That's the last thing we need. And that was the problem in Scotland, and we have finally got to a point where it's completely kind of neutered. And it is just really a kind of covering so that they can say that they are intending at some point to introduce it, but they're not sure what or when, and they're going back to the drawing board saying we will meaningfully engage with all stakeholders. But meanwhile, there's spent £30 million on this with not one single hour of care being delivered.

Speaker3: [00:20:59] I think a salutary lesson for the Labour government here with its ambitions. Now, all of this landscape overview with challenges and failing to deliver promises, particularly around funding, etc. I think caused you to say enough's enough and take some action. And I'm thinking of your setting up of the Social Care Foundation. Can you tell us a little bit about that? And there's been some exciting moves quite recently about it.

Speaker1: [00:21:26] Yeah. I was an occasional adviser in Number 10 to Rishi Sunak and his team on social care. And obviously saw that an election, back end of 23, saw an election was coming in 24 and I was looking beyond the election and likely Labour victory. So I wanted to have a platform and something cross-party to encourage and support meaningful reform of social care across party. And so that's why I set up the Social Care Foundation. But I didn't when I was working on advising and helping the officials in Number 10 on looking at and holding and co-chairing round tables in Number 10 on bringing people like Martin Green and Jane House and others into James Tugendhat and others into Number 10 to mainly talk about, right, an election is coming. There's not going to be major reform of social care before the election, but is there some low-hanging fruit that could be done between now and the election so I had it on the back burner a bit initially and then the elections and I stepped it up once the election happened.

Speaker3: [00:22:56] Taken place.

Speaker1: [00:22:57] And got it geared up more and was ready. We published one paper and was ready to move forward, but then we had the budget and that was a game changer, really for it, because I decided that I needed for my own mental health to take my usual sort of Mr. Angry sort of mode and direction and speak out as I did during Covid for more support for the care sector. I really wanted it to grow and do what I originally envisaged doing, but I felt I wasn't the right person to do that.

Speaker3: [00:23:47] And so you appointed Damian Green as chair.

Speaker1: [00:23:49] And I caught up with Damian post him sadly losing his seat in the July election and pitched it to him and he has grabbed it with both hands and I love working with him. A lot of people forget he's an ex-journalist, I suppose once, once a journalist, always a journalist, but he really he really can. Apart from the fact he has a long and proven track record, as you've discussed in your podcast with him. When he chaired the all-party parliamentary group on it. He really knows his onions in that point of view. And having been deputy Prime Minister and in the cabinet for a number of years. So, I was delighted when he accepted the invitation to chair that. And we haven't publicised it yet. But, you know, some of the people that are going to be on it on the advisory council of about 11 or 12, we'll be announcing that soon in the next few weeks. And, we're really excited about, in fact, we've got our first advisory council online get-together end of March. Yes, it is end of March.

Speaker3: [00:25:04] So lots to hear from the Social Care Foundation. I wanted to touch upon one aspect of that because, you've been on record as saying, and unfortunately, the history is strewn with examples of politicians trying to solve social care funding dementia, tax. Death tax comes to mind in both Conservatives and Labour. You've called for people to politicians to take the brave pill. I know, you're a rugby union fan and you'll know that the name of Jim Telfer, the great Scottish coach.

Speaker1: [00:25:35] Yes. I met him once, actually.

Speaker3: [00:25:36] Well, he was on record when he was asked about rugby players. He said great, great ones, he says. He said there were honest ones and then the rest, which in his own inimitable way, and I guess your call for the brave pill.

Speaker1: [00:25:48] Or the Yes Minister or Yes Prime Minister sort of, Sir Humphrey phrase. Where, oh, that's a courageous decision, Minister. And I know Damian feels this way too that, that it's time for courageous decision. I mean, social care is bigger than the NHS. Pre-COVID social care, it was always NHS first, social care second. And during Covid, not initially, but during it. It became a bit of better of a balance. But post-Covid has gone back to NHS first, social care second. And you cannot fix the problems in the NHS without fixing social care. I mean, I've been in the sector since I opened my first care home.

Speaker3: [00:26:50] In 1989.

Speaker1: [00:26:51] Four Seasons, I had a full head of hair then and now this is what...

Speaker3: [00:26:55] I had a lot more hair than this.

Speaker1: [00:26:57] Well, this is what, although I tell my four children it was. It was their fault. It's their fault that I've lost my hair. But, I've never been prouder than I was during Covid of the amazing work that care staff did at the front line. They were truly amazing and I did my tiny contribution bit of lobbying behind the scenes and publicly and writing about the need for more support and more funding for social care. But it is very sad. And in a way, it's not rocket science. If 10% even of this 20-odd million that was put in, that's been put into the NHS was put extra into social care, the benefit to the NHS would be huge.

Speaker3: [00:27:53] It would be a multiplier effect.

Speaker1: [00:27:55] Oh, completely. And also people forget that social care is a contributor to the economy.

Speaker3: [00:28:02] On a big scale.

Speaker1: [00:28:02] I mean, I know you and Damian talked about that, and I think it's about 5 billion in Scotland and 60 billion.

Speaker3: [00:28:08] 68 billion in in gross value.

Speaker1: [00:28:11] Gross value. And it's something that but also the complete nonsense of delayed discharges and this budgetary thing. We do need more integration. I know Andy Burnham in Manchester has done a reasonable amount of that. If you haven't had him on, you should.

Speaker3: [00:28:33] I would be delighted.

Speaker1: [00:28:34] To particularly talk about that.

Speaker3: [00:28:35] Andy if you're listening with a recommendation.

Speaker1: [00:28:37] And he knows his onions as well.

Speaker3: [00:28:40] A former minister.

Speaker1: [00:28:41] A former secretary of State for health, although it was called health at the time, but for health and social care. And that's probably the biggest integration experiment is the one I mentioned. And it's had its ups and downs, whatever. But that is what is needed.

Speaker3: [00:29:00] So we're talking about the need for honesty, etc.. So these are the big questions that I hope people will be listening. I wanted to spend the final part of the podcast, if I may, Robert, to look a little bit closely at your own journey as an entrepreneur, and particularly with your first love of business, as you've called it, which is the care sector. 1989, the Berlin Wall fell.

Speaker1: [00:29:21] I'd forgotten about that.

Speaker3: [00:29:22] And Robert Kilgour set up Four Seasons, one of the great.

Speaker1: [00:29:25] Well, it's soon to be no more. All good things come to an end. But, it was by accident. I'd had a hotel in Edinburgh for five years. But found the busier the hotel got with the bar, restaurant and bedrooms, the busier it got, the more I had to be there. And I had a young family and I wanted to spend some more time with the family. And this is pre-cash cards and whatever it was all cash. So the more cash it was about the more staff the busier you got. Absolutely. So I sold the hotel. I was very pleased with that. And I was looking for something next to do that was less involving me. I like seven days a week involvement, but less involving me at the front line. And so I bought a closed hotel in Kirkcaldy, my home town, and was going to convert it to 31 flats. And there was a grant at the time, we're talking about 1987 of 6500 per flat. And that was going to be my developer's profit. But between buying that property to do the flat development and submitting the flat plan to the Fife Council planning department, they changed the rules on grants which meant any development over six flats got zero.

Speaker3: [00:30:56] Right, okay. Change of plans.

Speaker1: [00:30:59] Change of plans. And I had put all the money that I'd made from five years of the hotel into buying this building and doing the plans for the flats, and so I was scrambling around to find something to do with this building. And a friend of a friend of a friend told me about care homes. I had never heard of. And so I went and visited a few in Edinburgh. And one of the directors of one of the companies I went to said, oh, I'm a QS at an architectural firm. I'll introduce you to them and I'll work with you and help you turn this building.

Speaker3: [00:31:37] And the legend was born.

Speaker1: [00:31:38] And that became, by accident, the first care home. And my intention was to develop it. And I got 100% finance from British Linen Bank, part of Bank of Scotland, to do the development. Funding and interest rates doubled in that construction period. I wasn't able to fix rates till the home was registered, but obviously they had doubled in that period and I moved into the care home, literally to try and fill it up because I needed to fill it up and then sell it. And I was in charge, believe it or not, of admissions until I was sacked, if you like, because I admitted I can even remember his name. I admitted a Mr. Plunkett and he barricaded himself in his room, broke up his furniture and set fire to his furniture. So I was sacked by the care home matron and deputy matron from any more admissions. But we got it filled. And once we got it filled and I said, right, I'll sell it now. And then I thought, actually, it's doing quite well. Why don't I leverage that to do another one and then another one and then another one.

Speaker3: [00:32:54] It became one of the very largest, of course, care home groups, legendary business.

Speaker1: [00:32:59] Well, when I left, in fact, I had breakfast this morning, I bumped into John Moulton of Alchemy, who I did the deal with, of course, we were catching up. And this morning at a working breakfast for the Jobs Foundation that I'm involved in. And what happened was that we went from the one that opened in June 1989, in Kirkcaldy, and we ended up when I left in 2000 with 101 UK-wide and over 7000 staff. And I was exhausted and I signed a three-year non-compete when I left, etc. but I said I'd sign a 30-year non-compete because I don't want to go anywhere near a care home ever again.

Speaker1: [00:33:42] But I missed it. I missed it because the care home business is about people and property, and I discovered in those few years of doing other business ventures, some of which I'm still involved in that I really missed it. And so I set up Renaissance Care.

Speaker3: [00:34:00] With two care homes, as I remember.

Speaker1: [00:34:03] And celebrated 20 years last year?

Speaker1: [00:34:06] Last year. So that was in 2004, and we're sitting at the moment at 19 care homes. And we're looking at in fact, I'm close to tying up a 20th one for June. But equally, we're also, as a lot of care home groups are having to do, is we're looking at potentially closing a service potentially very soon because of the budget impact. If there are no budget changes, which I think is most likely there won't be. And if we don't get a decent fee increase, which I think is most likely, then we will probably very similar to a lot of care home operators. We're going to have no option but to look at that as part of, we're already looking at things like CapEx and energy saving investments that I'd got in place three-year programs of stretching them out to over six years.

Speaker3: [00:35:11] To manage the cash flow.

Speaker1: [00:35:12] To manage the cash flow.

Speaker1: [00:35:14] There's lots of different ways. There's no silver bullet of how to deal with, because the extra cost to Renaissance Care is £900,000.

Speaker3: [00:35:23] From the employers' National Insurance.

Speaker1: [00:35:24] Purely from the employers. The two changes to employers, the 13.8 to 15% and the lowering of the threshold is going to cost, unbudgeted and unexpected, is going to cost Renaissance Care £900,000. And that's not a one-off.

Speaker1: [00:35:43] From next month, from April every year. And the threat to the flood or tsunami of care home closures and the effect of that on the NHS. It staggers me that the. And funnily enough, I think the Scottish Government Kate Forbes for example, deputy First minister, she does understand social care and the care home and the effect of these pressures on care homes. But the UK government doesn't seem to get it at all. I have through backchannels been communicating with Stephen Kinnock and Wes Streeting, but it's a complete silence. They're not in listening mode. Now, whether they are completely sort of snaffled by the Treasury which I suspect is the case, but it's so shooting yourself in both feet by doing this. It's very disappointing.

Speaker3: [00:36:55] No, it is. And I think aspiring people who want to enter this sector will be looking very closely.

Speaker1: [00:37:01] I don't want to put people off.

Speaker3: [00:37:03] I mean, you're scheduled to double the size of Renaissance Care.

Speaker1: [00:37:07] The first thing we've got to do is make sure that we are in a strong as possible position, despite all these attacks from the current government on employers' National insurance side. And we're close to, we feel we've got that handled that we're going to survive and be okay and make enough money. And the key thing is to make enough money because I own over 90%. Well, I own about 90%. I think the senior management team have 10%. And the key thing is to make enough money every year to pay your corporation tax to then what's left to reinvest in your facilities. Because if you're not reinvesting and going on this upward spiral if you're not moving.

Speaker3: [00:38:00] Stagnate.

Speaker1: [00:38:00] Well, actually, if you're not moving forward, you're going back and you're going down.

Speaker3: [00:38:05] Now, on that point, just penultimate point before my final question is you've been on record as saying now in the past, you're well aware, obviously, Four Seasons, Southern Cross, there have been massive care home groups, some of which have done very well and others that haven't. You've gone on record as saying that the specialist regional approach that Renaissance Care epitomises is probably the best way.

Speaker1: [00:38:29] The days of the southern... Remember Southern Cross had because actually I mentioned John Morton. John Morton and I, funnily enough, looked at one point at buying Southern Cross when it had seven hundred...

Speaker3: [00:38:43] Things went wrong.

Speaker1: [00:38:43] Well, it had 754 care homes, 14 of which were owned, 740 of which were leased.

Speaker3: [00:38:51] And leased back. Yeah.

Speaker1: [00:38:52] And it had a market cap on the stock market of just under £5 million. But those days are gone. I think the days... You need certain economies of scale because the care home business was pre-COVID, looking at the care home business pre-COVID to post-Covid, it's a lower margin business post-Covid, with things like the extra clinical governance required, quite rightly, and post Covid, etc.. And actually, I would go to the next stage and say pre-the-budget October, albeit the budget measures are coming into place in April 25, next month, but it's going to be an even lower margin business post-October's budget measures coming into place in April. And so you need to have a real handle on the finance. I mean, there were some lessons learned that I had, if you like, from Four Seasons, that we had too many outliers when we were expanding. We had too many homes all over the place. So at Renaissance Care, I've tried to grow it and continue to grow it in clusters that you can support, both in staffing. In Aberdeen, we've got six homes, so we've got six maintenance people, one in each home, which means you've got a maintenance team of six that you can call on just like that. But sometimes if you want to be in an area, a cluster starts with one and then you do bolt-ons. So clusters not having a senior management team in place before you expand was a mistake, right? We expanded at Four Seasons and then oh we need.

Speaker3: [00:40:51] The talent to lead it.

Speaker1: [00:40:52] We need the talent. So I've tried to put that in place up ahead. And equally finance-wise. Accountants who listen to this will be shocked. But at Four Seasons, our management accounts were usually published internally 6 to 7 weeks.

Speaker3: [00:41:15] After the month end.

Speaker1: [00:41:15] After the month end.

Speaker3: [00:41:16] Okay.

Speaker1: [00:41:18] But it was a different world then. Margins were different, but 6 to 7 weeks, right?

Speaker3: [00:41:23] Not great visibility.

Speaker1: [00:41:24] Not great visibility even internally, let alone to your funders and bankers and stakeholders. So, I have used technology and embraced technology and health and social care traditionally has not been good at embracing technology. But during Covid, we went from down here to up here. And I was determined coming out of Covid, that we didn't drop back, that we did use that heightened use of technology to drive forward, and we've got Nourish across all our care homes and we've got business modelling across the business.

Speaker3: [00:42:01] It makes a huge difference.

Speaker1: [00:42:02] It's good for budgeting. It's also good for plugging in potential acquisitions. But the other key change post-Covid is the staffing.

Speaker3: [00:42:10] The flexible staffing I was going to mention.

Speaker1: [00:42:12] Yeah, because I felt coming out of Covid, around sort of April 22, I felt that the boot was going to be on the other foot in the new world. Post Covid, people's work-life balances were completely changed in Covid. I know that with my four children, that completely changed their attitude to work-life balance. So we introduced flexible working. We introduced compressed working so that the managers to help them not get burnt out is that they can do their full week in four days, for example. And on the flexible, will say to you, okay, you're a single parent. What hours suit you? And because we're a relatively small company, I mean, bigger companies like HC-One, Barchester, Care UK, I don't think probably could do this, but it's one of the, there are disadvantages of being one of the smaller corporates. But there are also advantages where we say, oh, well, what hours suit you for school runs, for this kind of thing.

Speaker3: [00:43:21] It's very tailored, personalised.

Speaker1: [00:43:23] Exactly. And we did the work and introduced that. And one of the benefits.

Speaker3: [00:43:31] Some objection to it though, didn't you?

Speaker1: [00:43:32] Oh well, the senior management team were not mad keen on it, but now they think it was their idea. So, you know, part of my job is to have the vision and the strategy. And 50% of that is to develop that. And the other 50% is to sell it to the senior management team so that they take ownership of it because they have to deliver it at the front line. But it does benefit the bottom line because we're our agency. Usage over the last 12 months has sort of wavered between 1% and 1.5%, and that's...

Speaker3: [00:44:13] Very good compared to the industry average.

Speaker1: [00:44:14] But that's because of things like that. We also have things like free sanitary wear products for all employees, 80% of which are female. And actually, we also have about two-thirds of our senior management team are female, and our board is 50/50 male and female.

Speaker3: [00:44:37] I mean, it's tremendous change. 20 years. Great stuff to look ahead.

Speaker1: [00:44:42] But actually, yeah, if you ask what's the biggest change I've noticed since I opened my first care home in June 1989. I would say dependency of residence.

Speaker3: [00:44:58] And the complexity of care. I guess.

Speaker1: [00:45:00] I mean younger listeners to this podcast will think I'm joking, but I'm not. But several of the residents that moved into my first care home in 1989 brought their own cars with them and kept their cars in the airport. That's true on my children's life. That's absolutely true. But obviously we are providing I feel and I have concerns about it too, that we're providing in the main end-of-life care. And that is a concern, do we have enough palliative? So we are doing a number of different programs with Macmillan and with Marie Curie in that regard.

Speaker3: [00:45:47] What a changed world, bringing their own cars. Okay, but one final question, if I may, Robert. We've got Holyrood elections next year. We've got a very tumultuous period ahead of us. As a business person, hate to remind you that I think you started your entrepreneurial career at Ingliston Sunday Market, selling jeans and T-shirts from what I understand.

Speaker1: [00:46:13] No, I did. And while I was still at university.

Speaker3: [00:46:16] At university. So with all the political uncertainty, elections in Scotland next year, 1 or 2 key things that you'd ask politicians to implement in addition to what you said as an entrepreneur.

Speaker1: [00:46:27] Well, I had a meeting yesterday in Parliament with a Scottish MP, a Lib Dem, and I'm seeing this afternoon, among others, I'm separately seeing an SNP MP, Scottish MP and next week I'm meeting a number of cross-party MSPs.

Speaker3: [00:46:53] Shuttling diplomacy.

Speaker1: [00:46:54] Well, any parliamentarian, whether in the House of Lords, House of Commons, whatever party or in Holyrood that is interested in sitting down over a cup of tea or whatever and learning a bit more about what happens at the coalface, at social care and what are our burning issues and concerns at the moment. It is no guarantee that this will happen, but it's with a wish and a desire that it might lead to better political. I mean, you're smiling because yeah, I may be being, despite my advanced years, being naive.

Speaker3: [00:47:35] It's great.

Speaker1: [00:47:36] Being naive, but it's just something that I have a passion for that you hope that if they are better informed, they'll make better decisions. And that is my sort of fervent sort of hope. I mean, there's lots of things, both low-hanging fruit and bigger issues that could be. I don't see why it needs to take till 2028. But then I know Damian spoke to you about that too, and he's firmly of that, that view as well. But as I said a few minutes ago, I came into the care home sector by accident to get me out of a hole that I'd got myself in, if you like. It's been the best thing that's ever happened to me. I still, as I hope you'll have gathered from our conversation, that I still have a bounce out of bed every morning with an energy and an enthusiasm.

Speaker1: [00:48:36] Mainly, I have to say, because and this is a good point to end, I suppose, on is that I'm not involved in the day-to-day. My father was an entrepreneur, and one of his sayings to me, which I've always followed and still to this day follow, is Robert, as an entrepreneur, never be afraid to surround yourself with people cleverer and more able than you. And I've done that all my career and continue to do that. And actually I love working with really bright people. And it really keeps me on my toes and keeps my grey cells going. And I look forward, as you said, we've got plans to double in size, tough sector and a challenging and tough sector as it is that can also mean if you've got the right platform in the technology senior management team you can actually take advantage of the challenging situation that care is in and is going to be in over the next few years to grow our business. And we're excited about, only in Scotland. We're not coming across the border. We're sticking in Scotland.

Speaker3: [00:50:00] Well, on that hopeful and sagacious note, Robert Kilgour, thank you very much for your time.

Speaker1: [00:50:06] It was a pleasure, thank you.

Speaker3: [00:50:07] Likewise. If you've enjoyed this episode of Voices of Care, please like, follow, or subscribe wherever you receive your podcasts. And if you want to find out more about how we're turning the dial on the debate around health and social care, please visit newcrosshealthcare.com/voicesofcare. In the meantime, I'm Suhail Mirza. Thank you very much for joining us today, and I look forward to seeing you on the next podcast.

Speaker2: [00:50:29] Voices of Care, the healthcare podcast.