Four Seasons closing seven loss-making care homes

CASH-strapped Four Seasons Health Care is closing seven of its privately-owned care homes in Northern Ireland.

The Wilmslow, Cheshire-based company says the closures, which will affect 254 patients and 393 staff, are because the homes are operating at a loss.

Four Seasons runs 62 more care homes across Northern Ireland, and is the UK’s biggest private care home operator.

A spokesman for the company described the decision to shut the homes as “difficult and unavoidable” but it was not a result of the company’s perilous financial position “except to say we can’t continue to operate loss making homes”.

“They have been operating a loss for some time. We have been supplying a subsidised private care home service for the community, but now we just can’t continue to do this.

“This is an issue about social care funding. The funds that were being paid for the care, didn’t even meet the cost of the care and in some cases didn’t even meet the staffing costs.

“The problem is that there is a squeeze on the revenues that care providers receive.”

He also said the national shortage of nurses meant it had been difficult to recruit and retain permanent staff of the right calibre.

In October, the company appointed advisers to carry out an emergency review of its finances.

The private equity-owned firm, which is backed by Terra Firma, the private equity group headed by Guy Hands, has debts of more than £500m which attracts annual interest payments of around £50m.

Four Seasons recently told The Times it had been hit by a “significant step up” in its payroll costs.

Ian Smith, the chief executive, called on the chancellor had to help to address the funding crisis.

“If the cost burden of the national living wage is not offset by increased local authority funding for elderly social care, then a significant proportion of care beds in Britain will become unviable,” he said.

“A recent report has said there are 37,000 beds at risk as operators close homes or increasingly focus on self-funding residents.”

Mr Smith said if more beds became unviable, the effect on the NHS might be “far beyond the challenges imposed by events such as seasonal flu outbreaks or winter bed pressures.

“This is so serious that the government should take notice and the government should act.”