Ben Barbanel, Head of Debt Finance at OakNorth discusses the crucial role that lenders play in supporting public-private partnerships
The UK’s social care sector continues to be one of our biggest and most important industries. There are now more than 1.6 million people working for organisations that provide social care and support services to people all over the country[1], with the economic value of the sector totalling a massive, £55.7 billion[2]. In England alone, the sector has created c.18,000 organisations, seen the development of just under 40,000 physical sites, and experienced an increasing wage bill that now totals just under £26.6 billion (up from £19 billion in 2026)[3].
It’s a testament to the industry’s resilience that it has managed to continue growing despite significant uncertainty and challenges faced over the last few years. One of the most pressing issues has been the persistent staffing shortages, with one in ten positions remaining unfilled. The situation has been exacerbated by new immigration policies effective from March 2024, which restrict overseas care workers from bringing family members to the UK. This policy shift has heightened the need for better recruitment and retention strategies.
Looking solely at public-private partnerships (PPPs) within the wider care industry, there is no doubt that these have directly enabled a greater delivery of efficient and cost-effective medical facilities. For over 30 years, PPPs have offered innovative and entrepreneurial approaches to providing the services demanded of modern healthcare by the public. They have enabled access to private sector expertise and innovations that often bring specialised knowledge and skills that can improve the quality and overall efficiency of public projects. Furthermore, private companies will very likely offer more innovative solutions and technologies that the public sector might not have considered or have access to, outside of using PPPs.
The outsized positive impact of these partnerships, in addition to the overall growth of the UK care sector, would undoubtedly not have been fully realised without the role of specialist lenders. At OakNorth, we are proud of the role we play in supporting this vital sector. From funding the development of state-of-the-art medical centres like the Harehills Medical Centre in Leeds to providing follow-on funding to existing customers such as My Choice Healthcare and Springfield Healthcare, our commitment to the sector is unwavering.
Our unique approach to lending – building a granular, forward-looking view of performance and risk – enables us to better understand and support borrowers throughout the loan lifecycle. As a result, we’ve been able to continue confidently lending to the UK’s care sector, helping to drive positive outcomes for our customers.
All of this highlights how specialist lenders can fill the funding gap to provide the necessary financial resources and expertise to ensure the sustainability and growth of the care sector and PPPs. Lenders also conduct thorough due diligence to assess the financial viability and risks of the project. This includes evaluating the creditworthiness of the private partner, the feasibility of the project, and potential revenue streams. Moreover, by structuring financial agreements, lenders help in distributing risks appropriately between public and private partners, ensuring that risks are managed by the parties best equipped to handle them.
Looking ahead, the future of PPPs in the UK will be shaped by a variety of factors including economic conditions, government policies, technological advancements, and societal needs. As our population continues to age, there will likely be an increasing demand for healthcare facilities and PPPs as a way to leverage private sector expertise to meet these needs. With continued investment, funding, innovation, and a focus on sustainability, we are confident that PPPs and the wider care sector will continue to grow stronger.
@oaknorth
oaknorth.co.uk
[1] Prospects – Overview of social care
[2] Skills for care – The value of adult social care in England
[3] Skills for care – The state of the adult social care sector and workforce in England
Image depicts, Ben Barbanel, Head of Debt Finance at OakNorth