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Crisis In Uk Care Homes Set To ‘Dwarf The Steel Industry’S Problems’

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http://www.theguardian.com/business/2015/oct/31/care-homes-crisis-dwarf-steel-industry-problems-four-seasons-terra-firma

he ghost of Southern Cross hangs over Britain’s care home industry. Four years ago the country’s largest care home group collapsed, sparking months of uncertainty and worry for its 31,000 residents and their families, until Southern Cross’s rivals stepped forward to agree rescue deals for its 750 homes.

Now, however, the industry could be rewarded by facing an even bigger crisis. While it was a set of circumstances unique to Southern Cross that laid it low in 2011 – particularly high rents for its properties and the costs of a debt mountain left by its private equity owners – today care homes across the country are feeling the squeeze.

Four Seasons, which has more than 22,000 beds spread among 470 homes nationwide, is at forefront of the new crisis. The company is owned by private equity group Terra Firma, the organisation led by financier Guy Hands that has, at various times, controlled companies as diverse as Méridien hotels, Odeon cinemas and record label EMI. It is losing millions of pound a year and struggling under £500m of debt. Four Seasons needs to make a £26m interest payment in December to satisfy creditors who could put it into administration.

Terra Firma insists it will be able to make the payment, but the private equity group, trade unions, and local authorities all agree this is only the start of the problems for the care home industry.

Justin Bowden, national officer at the GMB union, which represents thousands of care home employees, said: “You are looking potentially at several Southern Crosses in the next 12 months if something drastic is not done.”

Once more leverage destroys all. Clearly the business model with all this debt attached is unsustainable, it does beg the question what the business plan was did they just expect fees to continually increase or is it just to sell on to another PE firm for the company to acquire even greater debt?

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http://www.theguardian.com/business/2015/oct/31/care-homes-crisis-dwarf-steel-industry-problems-four-seasons-terra-firma

Once more leverage destroys all. Clearly the business model with all this debt attached is unsustainable, it does beg the question what the business plan was did they just expect fees to continually increase or is it just to sell on to another PE firm for the company to acquire even greater debt?

Oh, I know! Borrow money. Get cash flow. Leverage the cash flow to ******. Flip to someone else.

All PE companies seem to have come a cropper on the last step.

Anyone buying a company from PE needs their bumps felt. Just look at the refloat and subsequent performance of Debenhams.

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So who's going to care for the boomers in their dotage? Not their children because their children's houses are too small and they all have to get two full time incomes to service the mortgage.

Not the state because they bankrupted that.

Maybe they'll just have to live on buses perpetually paid for by their free bus passes, going round and round and round.

The main thing is they shouldn't have to liquidate their mansions.

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Bowden said: “We and others have been saying for some years that the fee levels paid by most local councils are insufficient and well below the true cost of providing care for vulnerable older people.”

This is a pattern I have noticed a lot in the public sector, cut prices to the bone for a few years: "look how well we are doing - so much efficiency"

Then the supplier(s) gives up/goes bust, "Oh now we need to pay 10x what the original cost was, oh dear"

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Care homes are horribly vulnerable whenever TPTB introduce new red tape to protect the vulnerable push up the costs and complexity of providing care.

Some are also vulnerable to broken business models.

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Didn't Duncan banatyne make his millions from care homes under labour? Is this just another cycle readjusting itself once the govt subsidy gets switched off?

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Ltd companies.Directors pay themselves huge amounts into pensions etc and dont care when it goes under.They end up set up,the business doesnt need to do well.

I was just about to comment that I don't really understand the care home business as some go bust whilst others seem to be hugely profitable for their owners... but you've just answered my question!

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Didn't Duncan banatyne make his millions from care homes under labour? Is this just another cycle readjusting itself once the govt subsidy gets switched off?

Nope he sold just before Labour came into power in 1996 and also had a Tory politician as a company director - Michael Fallon.

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Didn't Duncan banatyne make his millions from care homes under labour? Is this just another cycle readjusting itself once the govt subsidy gets switched off?

In his biography he admitted he went into care homes as there was a guaranteed market there. I don't suppose he cared which party was in power so long as he could exploit that demand.

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Care homes are horribly vulnerable whenever TPTB introduce new red tape to protect the vulnerable push up the costs and complexity of providing care.

Some are also vulnerable to broken business models.

The levels of red tape and box ticking is ludicrous.

I've seen old folk wheeled out into a cold minibus mid winter, just to tick the box to say they have been out.

People who are in a near vegatitave state propped upright in a chair so some so called, activities co-ordinator can toss a bean bag for them to catch.

Carers having meeting upon pointless meeting with middle management, just to justify their importance. While the people who really matter are ignored.

The most stupid waste of cash I witnessed was a valentine's party, it lasted all of twenty minutes. Dozens of red roses, sherry they could not drink. However about three did manged to eat some of the soft centred Thorntons chocolates they were all given.

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Nope he sold just before Labour came into power in 1996 and also had a Tory politician as a company director - Michael Fallon.

Ah, fair enough

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Maybe they'll just have to live on buses perpetually paid for by their free bus passes, going round and round and round.

Sounds a bit like Snowpiercer - maybe you could work that up into a graphic novel?

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Like many things nowadays business that are run for the needy and vulnerable are run mainly for the people that run them, that includes certain kids charities..... ;)

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The levels of red tape and box ticking is ludicrous.

I've seen old folk wheeled out into a cold minibus mid winter, just to tick the box to say they have been out.

People who are in a near vegatitave state propped upright in a chair so some so called, activities co-ordinator can toss a bean bag for them to catch.

I told staff at my mother's care home not to bother trying to get her to participate in activities any more - she was way beyond being able to take part or enjoy them, and just wanted to be left in peace, not carted about hither and thither. And TBH she wasn't mad keen even when she was able.

They told me apologetically that they had been obliged to cart her downstairs to some activity she didn't want to go to, because the CQC inspectors were visiting, and anybody 'just sitting' meant a black mark.

I said another time, please leave her in peace and refer the wretched box tickers to me.

A pox on the lot of them.

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I told staff at my mother's care home not to bother trying to get her to participate in activities any more - she was way beyond being able to take part or enjoy them, and just wanted to be left in peace, not carted about hither and thither. And TBH she wasn't mad keen even when she was able.

They told me apologetically that they had been obliged to cart her downstairs to some activity she didn't want to go to, because the CQC inspectors were visiting, and anybody 'just sitting' meant a black mark.

I said another time, please leave her in peace and refer the wretched box tickers to me.

A pox on the lot of them.

There is an issue with care homes. You comment highlights it.

When OAP home started off - the 70s I think - they were no more than a big old hotel type building, housing OAPs who could not longer look after selves.

The home ensured that the OAPS was not left alone to starve.

Since then, there has been a massive amount of job creation and regulation attached to it.

ASk an OAP and they just want somewhere wamr with food and compnay.

Ideally it would family but thats not going to happen in a lot of places.

Enter the council, who see the OAP homes as a means to job creation in monitoring them, runing up the cost.

Bring back forests with hungry wolves.

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CQC not fit for purpose, the lot of them.

I cooked part time, 2 days a week at a care home.

We had an unannounced CQC inspection. Including myself only four staff had turned up for work out of 7.

They came in, went straight to the office upstairs spending 5 hours checking nonsense record keeping.

Luckily for the home 2 more staff came on duty at 14.00. CQC left at 15.00 and didn't even look round the home.

You know your mum better than any of these pen pushers, full of their own importance. The system would function better without them.

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There is an issue with care homes. You comment highlights it.

When OAP home started off - the 70s I think - they were no more than a big old hotel type building, housing OAPs who could not longer look after selves.

The home ensured that the OAPS was not left alone to starve.

Since then, there has been a massive amount of job creation and regulation attached to it.

ASk an OAP and they just want somewhere wamr with food and compnay.

Ideally it would family but thats not going to happen in a lot of places.

Enter the council, who see the OAP homes as a means to job creation in monitoring them, runing up the cost.

Bring back forests with hungry wolves.

It wasn't the council doing the inspection, but the Care Quality Commission.

Actually my mother's care home was extremely good, run by Abbeyfield, which is a not for profit organisation. The place was purpose built for dementia, and the staff well trained to cope with what can be a very challenging illness.

Despite all the horror stories, there are a lot of very good care homes out there. More and more people need them because of dementia which has advanced too far for relatives to be able to cope - I.e. the person can no longer safely be left alone at all - they need care and supervision 24/7, with someone on hand all night as well as all day.

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How much can it cost to live in a care home?

It can be £600 PER WEEK

Which works out at just under £86 per day, for all meals, snacks and drinks, all laundry (often a lot), staff on hand 24/7, and very often a lot of help with washing and dressing, even eating and drinking. Never mind heating bills, when the heating is usually on all day and night in winter, higher than you'd have it at home.

When compared to the price of B and B in any reasonable place in the same area, the cost often does not seem so excessive.

But whatever the rate, self funders will almost always have to pay more than anyone funded by their Local Authority, though the care they receive will be exactly the same.

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Which works out at just under £86 per day, for all meals, snacks and drinks, all laundry (often a lot), staff on hand 24/7, and very often a lot of help with washing and dressing, even eating and drinking. Never mind heating bills, when the heating is usually on all day and night in winter, higher than you'd have it at home.

When compared to the price of B and B in any reasonable place in the same area, the cost often does not seem so excessive.

But whatever the rate, self funders will almost always have to pay more than anyone funded by their Local Authority, though the care they receive will be exactly the same.

Not all elderly people are high maintenance.....some might be quite easy to look after....therefore £86 a day is value for money for some only, the others half that would easily cover......some care homes I would agree are excellent but not cheap, others are poor in comparison........I think that when a paying guests house money runs out the better homes let them stay on accepting what the local authority can pay.......those who have no home or savings tend to be bid for by the not so comfortable homes on the open market...there is not a lot of choice in the matter.....beggars can't be choosers.

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