Hertfordshire Plots Up To Eight New Nursing Homes In Ambitious Social Investment Drive

Hertfordshire County Council is moving forward with plans to deliver up to eight new purpose-built nursing homes across the county, as senior officers warn that without intervention the authority faces a significant and growing shortfall in residential care capacity over the coming years.

The proposals, which have received backing from the council’s resources and performance cabinet panel, centre on a so-called Social Investment Model (SIM) — an approach designed to attract institutional investors into the local care market while enabling the council to secure long-term, affordable provision for residents without shouldering the full burden of direct capital development.

According to a council report considered by the panel, demographic change is placing considerable strain on existing care infrastructure. An ageing population, combined with increasingly complex health and support needs, is driving up demand for nursing care at a pace the private market alone is unable to match.

Officers have warned that the county could face a shortfall of more than 800 nursing home places within six years — and that the cost of sourcing placements outside Hertfordshire to plug the gap could climb to as much as £18 million annually.

Jackie Albery, Director of Planning and Resources for the council’s adult care services, told panel members that the option of direct council-funded development had become increasingly difficult to pursue, citing rising borrowing costs, construction inflation and delivery risk as key barriers.

Under the Social Investment Model, the council would seek to partner with institutional investors — with local government pension funds cited as one potential category of funding partner — attracted by the prospect of stable, long-term and low-risk returns with strong social value credentials.

Those investors would finance the construction of new, purpose-built nursing homes. The council would then take on long-term leases for the completed buildings, sub-leasing them to independent care providers who would operate the services and care for residents on a day-to-day basis. Income generated by the care providers is expected to cover the leasing costs incurred by the authority.

Officers believe the arrangement would deliver between six and eight new homes, creating in the region of 800 additional nursing beds. Of those, up to 200 places would be designated as “affordable capacity” — reserved for residents whose care is funded or supported by the council.

Beyond simply adding bed numbers, the council argues the model would bring wider systemic benefits. By stimulating purposeful, planned development rather than relying on opportunistic market supply, officers say it should bring greater stability to the local care market and improve residents’ access to care within their own communities — a goal the Liberal Democrat-led authority has emphasised as a priority.
In the longer term, reducing dependence on out-of-county placements is expected to deliver improved value for public money, with high-cost external arrangements replaced by more cost-effective local provision.

Ms Albery told the panel that, subject to formal approval, the first new homes under the programme could open from 2028.