Care home crisis at its worst in West Midlands – claim

The financial crisis facing the UK’s care home sector is at its deepest in the West Midlands, according to research from restructuring and insolvency trade body R3.

chris radford

August figures, compiled using Bureau Van Dijk's Fame database, highlight that almost half (46.7 per cent) of medical nursing homes in the region have an elevated risk of insolvency. This is the highest proportion in the UK and is almost ten points above the national average of 37.1 per cent.

West Midlands residential care homes catering for those with learning difficulties, mental health or substance abuse issues are also struggling more than any of their UK counterparts.

One in four (24.6 per cent) has an increased risk of insolvency, which is close to six points above the national average of 18.9 per cent.

There are similar statistics among West Midlands residential nursing care operators, with one in four (25.3 per cent) carrying an elevated risk of insolvency, the highest proportion in the UK outside Wales and six points above the national average of 19.4 per cent.

R3 Midlands chairman Chris Radford (pictured), a partner at Gateley plc in Birmingham, said: "Quite clearly, the West Midlands care home sector has some substantial challenges with hundreds of businesses in serious financial danger.

"Although the statistics do not explain why care home finances are so critical in the region, anecdotal problems include falling council contributions towards residents' fees and an increase in staffing overheads.

"Alongside such funding difficulties, local care home businesses are trying to cope with a number of other challenges, including a minimum wage which is now £1 higher than it was in 2015, due to the introduction of the national living wage.

"The prospect of Brexit also means that many care home operators are struggling to recruit and retain enough staff. The sector is reliant on EU workers, many of whom are now reconsidering whether or not to continue to work in the UK.

"R3 is advising care home operators to continue to monitor their finances carefully. If cash flow becomes a major challenge, it is imperative to seek professional advice sooner rather than later."

Reference: https://www.greaterbirminghamchambers.com

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