Bosses from one of the UK’s largest independent social care providers have moved to reassure staff after announcing they had called in administrators.
Four Seasons Health Care Group, which runs more than 250 care homes across the nation as well as some hospitals, has gone up for sale after becoming insolvent.
“Years of chronic underfunding have left services at crisis point”
Chiefs at the company said there was no immediate threat to employees or patients and that funding was in place to ensure “continuity of care”.
However, critics warned that the collapse was another sign of a social care system in crisis.
Dr Claire Royston, group medical director of Four Seasons Health Care, said: “Today’s news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers.
“Our priority remains to deliver consistently good care,” she added.
Dr Royston said the move marked the latest stage in a restructuring process by the group.
Alvarez & Marsal Europe has been appointed as administrators of Four Seasons holding companies, Elli Investments Limited and Elli Finance, which carry the debt.
However, Four Seasons confirmed the operating companies that lead its care homes and hospitals were not in administration and would continue to be run as normal by the existing leadership teams.
The group said it had secured sufficient operational funding to ensure patients received “continuity of care” during the independent sales process period, which is expected to be complete by the end of the year.
The Care Quality Commission, which has responsibility for oversight of the care home market in England, said it did not expect services to close as a result of administration.
Debbie Westhead, CQC interim chief inspector of adult social care, said: “CQC’s market oversight function is fully aware of today’s developments and will continue to closely monitor the position.
“Our market oversight regulatory responsibility is to advise local authorities if we believe that there will be likely service cessation as a result of likely business failure,” she added. “We do not believe this to be the case at this time.”
However, Ms Westhead said the CQC would keep the situation under close review.
“Our priority remains to deliver consistently good care”
Simon Bottery, senior fellow at the King’s Fund think tank, said the problem facing Four Seasons demonstrated the “extreme pressure” that the social care system was under.
“Despite recent moves to shore up social care providers, years of chronic underfunding have left services at crisis point,” Mr Bottery said.
“As the Competition and Markets Authority has identified, many care homes that rely on publicly-funded residents are now financially unsustainable,” he added.
Mr Bottery said the social care system “desperately” needed a wholesale reform.
He questioned the whereabouts of the government’s social care green paper, which was promised two years ago and is expected to carve out a new future for the sector.
Unison assistant general secretary Christina McAnea said: “The company has been teetering on the brink for some time. While today’s announcement won’t immediately affect jobs or the running of care homes, it should act as an urgent wake up call to the government.
“Care of the elderly is too important to be left to the many companies whose business models hinge upon huge levels of private equity serviced debt. This is a reckless approach and no way to run the UK’s care sector.
“When unsustainable care companies crash, it’s local councils that have to step in and pick up the pieces – even though years of cuts have left their finances in no fit state to do so,” she said. “Much more funding is needed, but not without major reform of social care.”
Meanwhile, Judith Jolly, health spokeswoman for the Liberal Democrats, said questions must be answered by the government as to how such a major care home group had collapsed.
“Another social care crisis is unfolding on the Tories’ watch as they repeatedly delay confronting the funding and structural problems in social care,” she warned.
The news comes on the same day that Nursing Times reported that a children’s mental health hospital in Four Seasons’ profile has been shut down following a restructure of services by NHS England.
Meadow Lodge, in Chudleigh, Newton Abbot, had recently been inspected by CQC, which gave the service a rating of “inadequate” amid patient safety concerns.