This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/society/2019/apr/30/four-seasons-care-home-operator-on-brink-of-administration

The article has changed 7 times. There is an RSS feed of changes available.

Version 5 Version 6
Four Seasons care home operator collapses into administration Four Seasons care home operator collapses into administration
(32 minutes later)
Care homes operator Four Seasons Healthcare has collapsed into administration, sparking anxiety among relatives of its 17,000 residents and criticism from Labour over government funding cuts and the role of financial investors in social care. Care homes operator Four Seasons Healthcare has collapsed into administration, sparking anxiety among its 17,000 residents and their relatives, as well as criticism from Labour over government funding cuts and the role of financial investors in social care.
Four Seasons and the sectors’s regulator, the Care Quality Commission, said they did not expect any disruption to residents’ lives, nor the closure of any of its 322 homes, which employ 22,000 people. Four Seasons and the sector’s regulator, the Care Quality Commission, said they did not expect any disruption to residents’ lives, nor the closure of any of its 322 homes, which employ 22,000 people.
The Guardian understands that several potential buyers have expressed an interest in the business, which administrators said they hope to sell before the end of the year. The Guardian understands that several potential buyers have expressed an interest in the business, which administrators said they hoped to sell before the end of the year.
The Guardian view on a new social care plan: too little, too late | EditorialThe Guardian view on a new social care plan: too little, too late | Editorial
But Four Seasons’ financial failure has raised questions about the long-term future of a firm that has struggled badly under successive owners, Guernsey-based private equity group Terra Firma and Qatar’s sovereign wealth fund.But Four Seasons’ financial failure has raised questions about the long-term future of a firm that has struggled badly under successive owners, Guernsey-based private equity group Terra Firma and Qatar’s sovereign wealth fund.
Industry experts said it could now be taken over and broken up by its largest lender, H/2 Capital Partners, a little-known US property investment group that effectively controls the business.Industry experts said it could now be taken over and broken up by its largest lender, H/2 Capital Partners, a little-known US property investment group that effectively controls the business.
Labour criticised the government’s handling of the care sector and questioned the debt-fuelled business model that has become a common feature of the ailing social care sector. Labour criticised the government’s handling of the ailing social care sector and questioned the debt-fuelled business model that has become a common feature.
Barbara Keeley MP, shadow minister for social care and mental health, said: “The fragility and instability in the care sector is an inevitable consequence of years of underfunding by the Conservative government. Barbara Keeley, the shadow minister for social care and mental health, said: “The fragility and instability in the care sector is an inevitable consequence of years of underfunding by the Conservative government, but the real price of this instability and underfunding is now being paid by the 17,000 older people in Four Seasons care homes and their families who face an uncertain future.
“But the real price of this instability and underfunding is now being paid by the 17,000 older people in Four Seasons care homes and their families who face an uncertain future.
“There are major concerns about the debt-driven business models of some companies in the care sector and the role of foreign private equity firms and hedge funds in deciding the future care arrangements for large numbers of vulnerable people.”“There are major concerns about the debt-driven business models of some companies in the care sector and the role of foreign private equity firms and hedge funds in deciding the future care arrangements for large numbers of vulnerable people.”
She said Labour would invest an extra £8bn in social care during the course of a parliament to stabilise the system.She said Labour would invest an extra £8bn in social care during the course of a parliament to stabilise the system.
Four Seasons’ group medical director Dr Claire Royston said the administration “does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers”.Four Seasons’ group medical director Dr Claire Royston said the administration “does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers”.
But company director John Evans, 60, whose 64-year-old wife Marie was admitted to Four Seasons’ Headington care home in Oxford six years ago suffering from dementia, said he was worried, claiming that the quality of care had already deteriorated in recent years. But John Evans, 60, a company director whose 64-year-old wife Marie was admitted to Four Seasons’ Headington care home in Oxford six years ago suffering from dementia, said he was worried. He claimed the quality of care had deteriorated in recent years, citing “poor food, insufficient permanent staff, equipment failures – all signs of a business with no money”.
Evans cited “poor food, insufficient permanent staff, equipment failures – all signs of a business with no money”. He added: “The current debacle is a cause for concern but also for hope – that a white-knight purchaser that understands the sector and is not an equity investor, hedge fund or venture capitalist will take over and put in professional management and invest in the business.”
He added: “The current debacle is a cause for concern but also for hope – that a white-knight purchaser that understand the sector and is not an equity investor, hedge fund or venture capitalist will take over and put in professional management and invest in the business.”
Professional services firm Alvarez & Marsal will manage the administration, the biggest to hit the care homes sector since Southern Cross collapsed in 2011.Professional services firm Alvarez & Marsal will manage the administration, the biggest to hit the care homes sector since Southern Cross collapsed in 2011.
It comes more than a year after complex financial talks began between H/2 and its owner Terra Firma, run by Guernsey-based investor Guy Hands. It comes more than a year after complex financial talks began between H/2 and its owner Terra Firma, run by Guernsey-based investor Guy Hands. He staged an ill-fated £825m takeover of the business from the Qatar Investment Authority in 2012. Terra Firma still owns the shares but has effectively ceded control to H/2 and has no representatives on the Four Seasons board.
Hands staged an ill-fated £825m takeover of the business from the Qatar Investment Authority in 2012. Terra Firma still owns the shares but has effectively ceded control to H/2 and has no representatives on the Four Seasons board. H/2, which is controlled by the US billionaire Spencer Haber and owns the bulk of Four Seasons’ £525m debt, is understood to be ready to provide funds to keep the business going until its future is resolved.
H/2, which is controlled by US billionaire Spencer Haber and owns the bulk of Four Seasons’ £525m debt, is understood to be ready to provide funds to keep the business going until its future is resolved.
The Care Quality Commission, which oversees provision of social care, said it was “fully aware of today’s developments and will continue to closely monitor the position”.The Care Quality Commission, which oversees provision of social care, said it was “fully aware of today’s developments and will continue to closely monitor the position”.
It added: “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. We do not believe this to be the case at this time.”It added: “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. We do not believe this to be the case at this time.”
Paul Saper, a care homes expert from the LCS charity, said it was likely that H/2 would take ownership of the business and look to break it up.Paul Saper, a care homes expert from the LCS charity, said it was likely that H/2 would take ownership of the business and look to break it up.
“It’s not a business that an American property company should be involved in and it’s not a business for someone like Terra Firma,” he said. “It’s not a business that an American property company should be involved in and it’s not a business for someone like Terra Firma,” he said. “It works for small family businesses who own a few homes and run something very good. It doesn’t suit a big private equity firm to own 20,000 beds and it never will.”
“It works for small family businesses who own a few homes and run something very good. It doesn’t suit a big private equity firm to own 20,000 beds and it never will.”
Social careSocial care
Job lossesJob losses
HealthHealth
Healthcare industryHealthcare industry
RegulatorsRegulators
Care Quality Commission (CQC)Care Quality Commission (CQC)
newsnews
Share on FacebookShare on Facebook
Share on TwitterShare on Twitter
Share via EmailShare via Email
Share on LinkedInShare on LinkedIn
Share on PinterestShare on Pinterest
Share on WhatsAppShare on WhatsApp
Share on MessengerShare on Messenger
Reuse this contentReuse this content