Care home closures doubled

The number of care homes going bust, have doubled in the past year according to one of the UK’s top accountancy firms.

Figures from Wilkins Kennedy Chartered Accountants and Business Advisers show 73 care home went into administration over the 12 months up to 30 September 2011, representing a 109% increase from 35 in the previous 12 months. 

Wilkins Kennedy says a growing number of care homes are struggling with high rents and debt as income from local authorities fall due to cuts in public spending.

Some care home providers have been caught by ‘sale and leaseback’ practices whereby providers sold their homes then leased them back, guaranteeing annual increases in rent to the new leaseholder.   

In 2009/2010 the number of care homes in the UK totalled 17,500, providing 450,000 places.

Recent insolvent care homes include:

• Southern Care Group – The North Wales based care home firm went into administration in October 2010. It employed 270 people and cared for up to 300 elderly people at the time.
• Winnie Care Group – The Cheshire based group employed more than 250 people when it went into administration in April 2011. Eight care homes were put up for sale as a result.
• Grosvenor Care - A Stockport care home operator employing 150 people and operating four care homes when it went into administration in July 2011.
• Ascot Care Homes Holdings Limited - The company managed five care homes in Scotland and West Yorkshire before going into administration in December 2010.

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