[ad_1]
Scottish-registered care home businesses are in better financial shape than their counterparts in the rest of the UK – but many are still struggling to stay open.
Research by Opus Restructuring and Insolvency, looking at the latest accounts of 444 Scottish care companies, found that they had a better financial rating by business health monitoring firm Company Watch – of 53 out of 100 – compared to 49 in the rest of the UK.
A quarter were in the Company Watch ‘warning area’ and therefore at a one in four risk of filing for insolvency. This figure was 28% south of the border.
Only 14% were ‘zombie’ companies with negative balance sheets – against 20% elsewhere in the UK.
This outcome may well reflect the support given to independent care home operators through the National Care Home Contract (NCHC), which sets the rates paid by councils for publicly-funded residents – and which previously guaranteed a 4% profit margin.
Now the Convention of Scottish Local Authorities (COSLA) has effectively imposed a ‘take it or leave it’ 6% uplift in rates for the current NCHC renewal at a time when inflation has pushed up costs, interest rates have soared and there is an urgent need to raise staff pay rates to stem the rising tide of job vacancies in care homes.
In a recent BBC interview with Karen Hedge, deputy chief executive of Scottish Care, which represents independent operators, she said the deal was the best COSLA could realistically offer, but “still doesn’t cut it”.
Care industry leaders have warned that on average one care home in Scotland is closing every week.
Opus Restructuring and Insolvency partner George Dale said: “This is a tragedy unfolding in front of our very eyes, with increasing numbers of homes closing when there is already a shortage of capacity to cope with rising demand from a rapidly ageing demographic.
“Not only is it a financial disaster, but deeply worrying for residents and their relatives, rightly concerned at the health and social impact of the disruption of moving elderly and vulnerable residents, possibly far away from their friends and family.”
In June, Hogganfield Care and Skye Care appointed provisional liquidators, meaning that the Hogganfield Care Centre – a 44-bed nursing home in Millerston – and the Skye View Care Centre – a 24-bed dementia centre in Airdrie – will close.
In May, MHA Auchlochan, the owner and operator of the Auchlochan Garden Village retirement complex near Lesmahagow in Lanarkshire, also filed for administration.
That followed the news that in April, one of the UK’s longest continuously operating care homes, Balmanno House in the west end of Glasgow, filed for administration.
The previous month, administrators of Craigard Care agreed to sell three care homes and transfer the 165 staff, following completion of the sales later this year.
Don’t miss the latest headlines with our twice-daily newsletter – sign up here for free.
[ad_2]
Source link