(Solution) ICS Learn 5C001 1.3 External factors with negative and positive impact on Residential Care Industry
Solution
1.3 External factors with negative and positive impact on Residential Care Industry
Increase in Inflation (Negative Impact)- in the residential industry, this lead to an increase in overall operations. Their operations are in resourcing, operations and sustainability. Inflation means a surge in the costs of basic commodity, medication, food and rewards advanced all important for residential care.
The outcome of inflation is reducing the capacity for procurement therefore organisation pressured or populations/communities (Dao et al., 2024). For the care homes in residential industry, costs are used in recruiting qualified resources particularly since this is the most significant expense.
Inflation similarly leads to interest rates change (a strategy to manage inflation) affect ability for organisations getting capital to finance their operations. As evidenced in Bank of England (2025), an increase in interest rates with 6% lead to a similar surge in loans financing. Considering Calmere House, Kristen had already highlighted they have been incurring immense costs for staff and utility impacting quslity of services advanced.
Hence, inflation rates affect viability of access to capital with deterioration of servces provision, dissatisfaction and residential costs. Their implications are long-term where the residential care industry encounter challenges managing their operations in the economy.
Ageing Populations (Positive Impact)– In Office for National Statistics (2025), report identify by year 2041,
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