Medical nursing homes' high failure risk

New figures from restructuring and insolvency trade body R3 show that 36.7 per cent of homes of this type – which include hospices, dementia care and other specialist care homes - are considered above average risk of becoming insolvent within the next 12 months.

This is one of the highest risk rates of any types of business in the region, and more than double that of residential homes for elderly and disabled and non-specialist nursing homes.

R3 regional chairman Paul Barber says the figures highlight the crisis in social care: “Rising operating costs compounded by the rate of inflation are putting pressure on organisations in the care sector. However it is the more specialist medical care homes with residents which require more intensive nursing which are the worst affected.

“These will have greater costs as they require higher staffing levels and more specialist skills and equipment.

“These type of homes look after the most vulnerable members of society. Our figures show that 158 such homes in the North West are at risk of failure in the next 12 months.”

Mr Barber said staffing problems could be exacerbated by Brexit, as many homes rely on overseas staff and recent figures indicate that many EU citizens are voluntarily returning home. Many homes had also been caught out by a tribunal ruling that residential care workers who routinely “sleep in” as part of their shifts should be paid the national minimum wage for those hours rather than a lower flat rate.

HMRC has been pursuing enforcement action against such homes which have not yet paid, although this has been suspended until October 2 by the government after charities warned that it risked having a serious financial impact on the sector.

He added: “We have been hearing warnings of a pending crisis in the care sector for some time and there are now real signs of stress. When difficulties have occurred in the past, many homes were run by local authorities which could draw on a pool of resources to resolve them. Now homes are almost exclusively in private or charitable hands, so there is often nothing to fall back on.