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.

Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
Sport
Wayne Rooney talks to the media during a press conference
sport
Arts and Entertainment
tv
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
News
i100
News
Down time: an employee of Google uses the slide to get to the canteen
scienceBosses are inventing surprising ways of making us work harder
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

Project Manager (infrastructure, upgrades, rollouts)

£38000 - £45000 Per Annum + excellent benefits package: Clearwater People Solu...

MI Analyst and SQL Developer (SQL, SSAS, SSRS)

£28000 - £32500 Per Annum + 28 days holiday, pension, discounts and more: Clea...

Creative Content Executive (writer, social media, website)

£30000 - £35000 Per Annum + 25 days holiday and bonus: Clearwater People Solut...

Reception Teachers needed for September 2014

£110 - £130 per day + Competitive rates of pay: Randstad Education Reading: Re...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?