Britain’s biggest care home operator is to close seven loss-making sites in Northern Ireland, in a move that affects hundreds of patients, as it struggles with rising costs and a £500m debt burden.
The private equity-owned Four Seasons Health Care said the decision was difficult but unavoidable, with the announced closures throwing the sector’s funding struggles into sharp relief just a day before the chancellor’s spending review.
Four Seasons said the main reason behind the move was that the homes were “operating at a loss and no longer viable”. “We have [in effect] been paying a subsidy for them to continue to provide care. We regret that we cannot continue to sustain this position,” a spokesman said.
The care homes affected are: Victoria Park and Stormont in Belfast; Antrim; Garvagh; Donaghcloney near Banbridge; Oakridge in Ballynahinch; and Hamilton Court in Armagh.
Four Seasons, which is owned by private equity firm Terra Firma, is at the forefront of a funding crisis hitting the whole sector. Leading care home operators have said they would close or sell homes if the chancellor failed to provide more funding in his autumn statement.
In a letter to George Osborne, Four Seasons joined Bupa UK, HC-One, Care UK and Barchester in warning that extra costs would mean “thousands of older people could be left without a home”.
Justin Bowden, national organiser for the GMB trade union, said the closures would have “devastating consequences” for residents and staff. He said the sector was in “slow motion” collapse because of the shortage in funding and predicted the crisis would put yet more pressure on the NHS because older patients who could not be cared for at home would seek beds through A&E departments.
There are approximately 400,000 people in residential care homes across the UK and the ResPublica thinktank has predicted a shortfall of 37,000 beds by 2020 if a funding gap of £1.1bn is not met by the chancellor. Care homes are being squeezed by a fall in the fees that local authorities contribute to residents’ care and a rise in staff costs. The latter will increase further when the “national living wage” comes into force next April.
ResPublica says the industry can no longer cope with the failure of a major operator, having weathered the collapse of Southern Cross in 2011. Southern Cross was then the UK’s biggest care home group and rival operators took control of its homes when it foundered.
Bowden said: “The care sector is in desperate need of funds. It isn’t that they aren’t making a profit, they can’t even cover costs. This is not a lifestyle choice for over 65s or about a healthy granny going into a care home. There are young disabled residents and of the elderly more than 50% have dementia with the majority having underlying acute medical conditions. They can’t be kept at home with domiciliary care.”
Andy Graham, who works at Oakridge care home in Ballynahinch, told BBC Radio Ulster he was angry that staff were not given advance warning. A total of 393 staff will be affected across the seven homes.
“I’m totally disgusted,” he told BBC Radio Ulster. “I feel more for the residents’ families, they’re going to have to get re-homed. It’s not nice at any time of year, but especially with Christmas just around the corner.”
Another worker at one of the affected homes, who asked not to be named, told the Guardian: “I am absolutely disgusted. We were told it has to do with the living wage. If they had their way we’d be on £4 an hour, it’s nothing to do with the living wage, it’s to do with the way they spend money with managers getting bonuses while we take staff cuts.”
The staff member said patients and their families were “distressed” by the decision. “These are good homes because of the staff. These families have built up good relationships with us and now at their time of life their loved ones are being told to move and be with strangers.”
Four Seasons said none of the homes would close before the end of February 2016.
Its future as Britain’s biggest care home operator remains in doubt after it revealed widening losses as a result of rising costs and lower occupancy, with third-quarter results showing a £25.4m loss, 53% higher than the same period a year ago.
It is also struggling with its £500m debt burden. Four Seasons must meet annual interest payments of £50m, which it pays in two tranches: in December and June. It has enough cash to cover the forthcoming December payment of £26m.
