Exclusive

Britain's biggest care home owners have debts of more than £4.5bn

Just a year after the Government vowed to prevent another Southern Cross, we reveal the complex corporate finances that leave our elderly facing an uncertain future

Britain's biggest private care home owners have combined debts of nearly £5bn, it can be disclosed today, raising fresh concerns about the financial health of companies looking after thousands of elderly and disabled people.

An investigation by The Independent and Corporate Watch has established that the debts of three of the firms, which own nearly 800 homes, have been rated as risky by leading credit agencies over concerns about how the companies could pay off the debts in the tough economic climate.

Meanwhile, receivers have been called in to a subsidiary of the ninth largest care home company, Bondcare, which has 74 homes, following concerns raised by its lending bank.

The Government has failed to introduce any regulation to force care home providers to be more transparent about their finances – despite promises made in the wake of last year's Southern Cross collapse which affected 31,000 elderly residents and their families.

Most leading care home owners have highly complex structures and loan arrangements, making it difficult for local authorities and families to pierce the corporate veil and properly assess underlying risks. Scrutiny of five of the biggest firms is made more difficult because they are owned by parent companies based in secretive offshore tax havens, The Independent has found.

Over the past 20 years there has been a significant expansion of large private companies, keen to cash in on the care business, while council-run homes and smaller firms have declined. Local authorities dealing with a 28 per cent cut to their budgets from central government and an ageing population are increasingly looking to the private sector to build new homes and reduce running costs. Councils, the biggest purchasers of care beds, have spent millions of taxpayers' money hiring management consultants to recommend companies without necessarily assessing future risks. Many feel that the Southern Cross debacle demonstrated that financial regulation is long overdue.

Last night, Labour's Andy Burnham, shadow Health Secretary, said: "It is absolutely essential that individuals have access to clear information about the strengths and liabilities of organisations looking after their mums and dads. "The Government said it will legislate soon on social care and it is essential that it learns the lessons of Southern Cross, puts some stability into this market as the current high-rolling, high-risk economics we see is not compatible with the care of elderly people."

Michelle Mitchell from Age UK said: "This is a major concern and we are calling on the Government to ensure that Monitor, the NHS Financial Regulator, is given a duty to assess the financial viability of care providers and, where necessary, the powers to ensure compliance."

A Department of Health spokesman said it had been working closely with the care home industry and a public consultation about financial regulation would begin soon.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: My client is an excellent, large partially ...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Ashdown Group: Lead Web Developer (ASP.NET, C#) - City of London

£45000 - £50000 per annum + Excellent benefits: Ashdown Group: Lead Web Develo...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee