A new report by Company Watch has found that 1,500 care homes in the UK have unsustainable levels of debt and risk going into administration.
This represents one-third of British care homes.
The high profile failure of Southern Cross care homes a couple of years ago reminded us that private care home providers are vulnerable.
When Southern Cross closed, more than 130,000 residents were left in a challenging position.
Looking at the 4,872 firms operating 20,000 care homes surveyed by Company Watch, 1,149 were rated as ‘financially vulnerable’.
Consequently they have a one in four chance of needing a financial rescue or facing closure in the future.
Company Watch found a further 700 care providers which they defined as ‘zombie’ firms, with liabilities exceeding their net assets.
When choosing a care home, there is so much to consider.
Financial strength is an important consideration, to ensure that the care home you select today is still open for business in the future.
This is important to avoid the expense and emotional turmoil of relocating a care home resident in the future, once they are settled into a home they like.
If you need help assessing the financial strength of a care home as you consider options for a relative or friend, do get in touch.
