The Adult Care Services Cabinet Panel of Hertfordshire Council met on Wednesday, 3 June 2026, to discuss the development of nursing home provision in the county. The panel considered a new social investment model (SIM) to increase the availability of high-quality nursing care, which would involve attracting external investment to fund the construction of new homes.

Development of Nursing Home Provision in Hertfordshire

The panel discussed the growing demand for nursing care in Hertfordshire, driven by an ageing population and an increase in residents with complex needs, particularly dementia. This demand is projected to create a shortfall of 839 affordable beds, leading to an £18 million annual cost pressure by 2032. The council has a statutory responsibility to ensure a sustainable and high-quality care market, and traditional methods of increasing provision are no longer viable due to rising borrowing costs and construction inflation.

To address this, the council has developed a Social Investment Model (SIM). This model aims to attract long-term capital investment, primarily from local government pension schemes, to fund the development of new nursing homes. Under SIM, institutional investors would fund and develop the homes, while the council would enter into long-term lease arrangements and sub-lease the properties to care operators. This approach allows the council to retain strategic oversight, ensure quality and affordability, and share risks appropriately.

The proposed programme aims to deliver between six and eight new nursing homes, creating approximately 600 additional beds. Of these, 150 to 200 beds will be secured as affordable capacity for council-supported residents. The first homes are expected to open from 2028.

During the discussion, councillors raised several points:

• Model Change: Councillor Tony Kingsbury asked why the model was changing from previous direct council-led development and why the new approach could be implemented more quickly. Josh Dunn, a director at Newton, explained that increased borrowing costs had fundamentally changed the market. The new model incentivises investors and developers to expedite projects, and building multiple homes simultaneously allows for economies of scale.
• Bed Shortfall: Councillor Rachel Carter clarified that the 839-bed shortfall referred to affordable beds that the council would need to fund, and that the overall demand for beds in Hertfordshire would be higher. Christian Tissard, Head of Commissioning for Older People, confirmed this, stating that the programme would address only a portion of the overall gap.
• Design and Ownership: Councillor Carter also inquired about the specification and design of the homes and whether the council would retain ownership. Christian Tissard explained that the design would be a partnership, with the council having strong influence, and that the investors would aim for designs attractive to both self-funders and council-supported residents. The ownership model is flexible and will be explored further.
• Quality and Environment: Councillor Carter and Councillor Lesley Greensmyth expressed concerns about the design of the homes, ensuring they are not too clinical and provide a good quality of life for residents, particularly those with dementia. Officers assured the panel that homes would be designed to dementia-friendly standards and would be attractive places for anyone to live. It was clarified that individual homes would typically have around 75 beds, with the 150-200 figure representing the total number of affordable beds to be delivered across the six to eight new homes.
• PFI Lessons: Councillor Wendy Rouse asked about lessons learned from Private Finance Initiative (PFI) schemes, particularly regarding maintenance. Josh Dunn stated that the SIM model was designed to be straightforward, with fixed lease payments that only increase with inflation, separating maintenance and operating costs from the council's liability.
• Other Councils Using the Model: Councillor Chris Lloyd asked if other councils were using this model. Josh Dunn noted that while Hertfordshire had a history of developing care homes, the social investment model using pension capital was newer, with some examples in Scotland.
• Risks and Timescales: Councillor Lloyd also raised concerns about planning, land ownership, and potential provider failure. Josh Dunn explained that developers would hold the planning risk, and the council would retain provider risk. He also noted that the average planning duration for nursing and residential homes in Hertfordshire was 129 days, with investors offering long-stop dates for planning and delivery.
• Public Health and Prevention: Councillor Lloyd emphasised the importance of public health initiatives to encourage physical activity and reduce future demand for care services. Officers confirmed that the council's Connect and Prevent approach included work on increasing resilience, supporting independence, and linking people with exercise classes, and that links were being made with public health on these matters.
• Local Government Reform (LGR): The potential impact of LGR was discussed, with officers confirming that the programme was designed to be flexible and resilient to future structural changes.
• Workforce and Recruitment: Councillor Stuart Roberts raised concerns about the availability of resources to manage the project and the recruitment of quality staff to deliver care. Officers confirmed that additional resources had been identified within the Connect and Prevent Transformation Programme and that the procurement of care providers would include clear expectations regarding workforce strategy and retention.
• Pension Funds: Councillor Calvin Horner and Councillor Stuart Roberts highlighted the opportunity presented by pension reforms, noting that local government pension funds were actively seeking infrastructure investments like this.

The panel was asked to recommend to Cabinet that it:

a. Agrees the Social Investment Model as the preferred option for delivering additional nursing capacity. b. Approves progression of the model to implementation, including identifying investors and developers and entering into necessary legal documentation. c. Delegates authority to the Executive Director of Resources, in consultation with relevant executive members, to enter into contractual and lease agreements. d. Approves the inclusion of the Hitchin Road, Stevenage scheme in this approach. e. Notes the need to secure external resources for delivery, such as legal and financial advice.

The panel agreed to move to Part Two of the meeting to discuss confidential financial and location-specific details. Following the Part Two discussion, the panel formally agreed the recommendations from Part One.

The meeting concluded with thanks to the officers involved for their work on this innovative approach to addressing the county's nursing care needs.