04/09/2015
The largest home care provider in the UK has to resolve a deepening funding crisis that if left unsolved, could mean that thousands of elderly residents will need to be re-housed.
It transpired that the company has lost £25m over the last 3 months, and is paying more than £50m a year on interest due to debts of over £500m. According to the latest accountancy figures, the after tax earnings were just £51.5. With the compulsory increase of the National Living Wage in 2016, Four Season’s future is precarious at best.
The company employs over 30,000 staff and cares for over 20,000 residents and was amongst a group of the five largest companies to write to George Osborne earlier this month. The firm warned that it would inevitably collapse within two years if it is not subsidized by the government. Profits will take a £10m hit when the over 25 £7.20 per hour wage is introduced.
According to The Telegraph, “In a letter to George Osborne, Four Seasons joined Bupa UK, HC-One, Care UK and Barchester in warning the extra costs would mean "thousands of older people could be left without a home".
Four Seasons has allegedly begun to sell off some of its properties in an effort to remain in business. Worryingly, investment and funding might prove very difficult due to the difficulty in making a profit on care homes as a result of increased staffing costs from next year. Failure to see private and government investment could ultimately result in the collapse of many companies in the industry, resulting in an increased reliance on NHS facilities.
Whilst Four Seasons has a substantial private client base, it is nevertheless still heavily reliant on local authority investment. Unfortunately, social care spending on the elderly has dropped by 17% over the last five years. With just 85% of its rooms currently occupied, Four Seasons is feeling the strain.
Justin Bowden, the GMB national officer summarised the difficulty that is being faced, saying: “the crisis in care is not the result of the rates of pay staff receive. It is the product of chronic underfunding by successive governments and society’s failure to face up to its responsibility to care for those who paid tax and national insurance all their lives, in their times of need.”
The lack of funding for the care industry has simply exacerbated the impending crisis and collapse.
John Kennedy, who conducted an inquiry into the sector last year, said: "The Government, regulators and care home providers need to come together to improve funding and pay, cut bureaucracy and inject humanity back into the system we rely upon to look after our loved ones and ourselves."
Written By:
Daniel James
www.danieljamesbio.com
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