Since the onset of the global financial crisis, we have seen many examples of residential care homes closing their doors.
These closures are inevitably distressing for care home residents and their families.
An academic study published last summer found the risk that involuntary moves between care homes put residents’ health and lives at risk is a serious concern.
Relocated care home residents face adverse outcomes to their physical health, wellbeing and even mortality.
Carefully planned and managed residential care home closure is, however, linked to better outcomes than disorderly relocations.
In the local press this week was a story about a residential care home in Merrow near Guildford, set to close after the site was branded “not fit for purpose”.
When speaking to groups of people about care fees funding, I always suggest checking on the financial strength of your chosen care home.
Look for organisations which are financially robust; no or manageable levels of debt and consistently profitable are two main financial factors to consider.
This is often as simple as visiting the Companies House website, paying £1 and downloading a copy of the latest annual accounts.
What you should seek to avoid is choosing a residential care home which faces of a high risk of closure in the near future, due to financial factors.
Southern Cross was a high profile example of a a private provider of health and social care services, facing a financial crisis in 2011, unable to afford its annual rent bill of £240m on its 750 properties.
This was the result of them selling the leases on these properties in 2008, to fund a programme of expansion.
With changes to care fees funding set to be introduced following the recent Care Bill, a new LaingBuisson report found that fees paid by councils have fallen by 5% in real terms over the last five years.
The average fee councils pay for residential care in England is a little over £500 a week. This is around £30 a week less than the calculated ‘Far Price Floor’ for residential care homes with only an ‘adequate’ physical environment.
The LaingBuisson report concluded that care groups with client bases which are primarily made up of council-funded residents could face grave new threats due to council fee rates continuing to lag behind Fair Price levels.
With increasing threats to the financial sustainability of residential care homes as a result of funding cuts and legislative change, reviewing the financial strength of a care provider is one thing you must do before choosing a residential care home.
