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.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Customers look at the new iPhones on display at the launch of the new Apple iPhone 6 and iphone 6 plus at the Apple IFC store in Hong Kong
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Sport
Andros Townsend is challenged by Vladimir Volkov
football
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
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

SEN 1:1 Teacher

£120 - £130 per day: Randstad Education Chelmsford: Are you a qualified teache...

SEN Teachers and Support Staff

£50 - £130 per day: Randstad Education Chelmsford: Are you an SEN Teacher or L...

English and Media Teacher

£100 - £120 per day: Randstad Education Chelmsford: English & Media Teacher - ...

Y1 Teacher

£90 - £120 per day: Randstad Education Leicester: Y1 Teacher required for a So...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week