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 endorsed a new social investment model to increase the availability of high-quality nursing care, which will involve attracting external investment to fund the construction of new facilities.

Development of Nursing Home Provision in Hertfordshire

Hertfordshire County Council is facing a growing demand for nursing care, driven by an ageing population and an increase in complex needs, particularly dementia. It is projected that there will be a shortfall of approximately 839 nursing beds, leading to an £18 million annual cost pressure by 2032. To address this, the council has identified a social investment model as its preferred solution.

This model will see institutional investors fund and develop new nursing homes. The council will then enter into long-term lease arrangements and sub-lease the properties to care operators. This approach aims to deliver between six and eight new nursing homes, creating around 600 additional beds, with 150 to 200 of these beds secured as affordable capacity for council-supported residents. The first homes are anticipated to open from 2028.

During the discussion, councillors raised several points:

• Rationale for the new model: Councillor Tony Kingsbury questioned why the model was changing from previous approaches and why this new model could be implemented more quickly. Josh Dunn, a director at Newton, explained that increased borrowing costs for the council (up by approximately 300% in the last decade) had fundamentally changed the market, necessitating a new approach. He also highlighted that the proposed model allocates risk differently, incentivising investors and developers to expedite the process. Building multiple homes simultaneously would also allow for economies of scale.
• Shortfall definition: Councillor Rachel Carter sought clarification on whether the 839-bed shortfall referred to beds the council would have to fund or the total beds required. Christian Tissard, Head of Commissioning for Older People, confirmed that this figure represented a structural shortfall of affordable beds that the county council could afford. He added that the programme would only address a portion of this gap due to the risks associated with going further, particularly at pace.
• Design and ownership: Councillor Carter also asked about the specification and design of the homes and whether the council would retain ownership. Christian Tissard explained that design would be a partnership, with the council having a strong influence. Investors would need to ensure the homes were attractive to self-funders and sustainable for 35 years. The council's retention of ownership was described as flexible and would be explored further.
• Quality and environment: Councillor Carter emphasised the need for homes to feel like a home rather than being overly clinical, especially for residents spending their final years there. Officers confirmed that build standards would include dementia-friendly design and that they were looking at exemplar homes that would be attractive to both self-funders and council-funded residents.
• Risks and timescales: Councillor Chris Lloyd raised concerns about timescales, land ownership, planning permissions, and potential provider failure. Josh Dunn explained that investors and developers would hold the planning risk, as they are better placed to manage it. Provider failure risk would remain with the council, as they have a duty of care to residents. He noted that the average planning duration in Hertfordshire is 129 days, but this varies by district. He also mentioned that investors were offering long-stop dates for planning and delivery.
• Other councils using the model: Councillor Lloyd also inquired if other councils were using this model. Josh Dunn stated that while building nursing homes was not new, the social investment model, particularly deploying pension capital, was newer, with some examples in Scotland.
• Public health and prevention: Councillor Lloyd stressed the importance of public health initiatives to encourage physical activity from a younger age to potentially reduce future demand for care services. Officers confirmed that this was part of the council's Connect and Prevent approach, which included work on increasing resilience, supporting unpaid carers, and promoting independence through exercise and other activities.
• Contract length and LGR: Councillor Lloyd asked about contract lengths and how the model would work with potential Local Government Reorganisation (LGR). Officers confirmed contracts would be for 35 years, and that the programme was designed to be flexible and resilient to LGR.
• Pensions reform and investment: Councillor Calvin Horner highlighted that the model aligned with new asset classes being developed by pension funds, presenting an opportunity for investment.
• Scale of homes and dementia care: Councillor Lesley Greensmith expressed concern about the size of the proposed homes (150-200 beds) and how this would impact residents with dementia. Officers clarified that the 150-200 beds referred to the total affordable capacity across six to eight homes, with each individual home being optimally sized at 75-80 beds. They also detailed how design and unit segregation would cater to different needs, including dementia.
• Oversight and recruitment: Councillor Stuart Roberts asked about the council's resource capacity for oversight and management of the project, and reassurance regarding the recruitment of quality staff for the new homes. Officers confirmed that additional resource had been identified within the Connect and Prevent Transformation Programme and that they were working closely with commissioning teams. They acknowledged that internal resource would be focused on LGR, but external legal and procurement support would be sought. Regarding staffing, they outlined clear expectations in the procurement specification for providers regarding workforce strategy and mobilisation plans, and highlighted the council's wider strategy for values-based recruitment and training.
• PFI lessons: Councillor Wendy Rouse questioned how lessons learned from Private Finance Initiative (PFI) schemes, particularly regarding maintenance, had been incorporated. Josh Dunn explained that the new model was distinctly different, with straightforward lease agreements where maintenance and operating costs were detached from the council's direct liability.

The panel ultimately recommended to Cabinet that it agrees the social investment model as the preferred option for delivering additional nursing capacity, approves its progression to implementation, delegates authority for contractual arrangements, approves the inclusion of the Hitchin Road-Stevenage scheme, and notes the need for external resources.

The next meeting of the Adult Care Services Cabinet Panel was scheduled for Thursday, 2 July 2026.