One of Britain’s biggest care home groups went into administration yesterday, leaving thousands of elderly residents and their families fearing closures.
Two holding companies behind Four Seasons Health Care, which operates 322 homes, collapsed under debts of around £625million owed to a US hedge fund.
Around 17,000 people live in Four Seasons care homes and the group employs more than 20,000 staff.
The care home sector is facing a £3.5billion funding shortfall, and there have been repeated warnings that operators are buckling under the pressure of rising costs and cuts to council funding (file image)
The firm insisted the decision by two of its holding companies to call in administrators did not mean its homes were earmarked for closure as the operating companies – which run the homes – have not collapsed.
Group medical director Dr Claire Royston said: ‘This does not change the way we operate or how our homes are run, or prompt any change for residents, families, employees and indeed suppliers.
‘Our priority remains to deliver consistently good care. It marks the latest stage in the group’s restructuring process and allows us to move ahead with an orderly, independent sales process.’
However, charities said the problems at Four Seasons were symptomatic of the social care crisis in Britain and called for urgent reform.
The care home sector is facing a £3.5billion funding shortfall, and there have been repeated warnings that operators are buckling under the pressure of rising costs and cuts to council funding.
Administrators will now seek to sell the business groups – Elli Finance (UK) and Elli Investments – which owe about £625million to US hedge fund H/2 Capital Partners, which previously ordered the sale of Four Seasons. The move to call in administrators was hailed as the biggest care homes failure since Southern Cross went bust in 2011.
Two holding companies behind Four Seasons Health Care, which operates 322 homes, collapsed under debts of around £625million owed to a US hedge fund
Unions accused the Government of ignoring the ‘reckless’ financing of care home companies by private equity groups while the GMB said the care system was ‘crumbling’ because of a lack of funding.
More than 400 UK care home operators have collapsed in the past five years, according to research by accountancy firm BDO, including 101 last year. Former pensions minister Baroness Altmann demanded better financial regulation of operators, claiming it was a ‘matter of life and death’ for frail and vulnerable residents whose health could deteriorate rapidly if faced with the stress of having to move to a new care home.
She said: ‘There should be proper scrutiny and regulation of the financial position of these companies. We need to change the requirements on people running care homes to ensure they have the financial security to offer a home for life.’
George McNamara of charity Independent Age said: ‘While private providers can walk away, it is families and local authorities who are left to pick up the pieces.’
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