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More Care Home Insolvencies than Ever Before
Advances in modern medical science and numerous other factors have resulted in the steady rise of average life expectancies.
More than ever before, most of us can now expect to live well into old age. However, the health concerns of our twilight years haven’t gone away and a lot of us can expect to make greater use of adult care services the older we get.
With each generation living for longer than the last, the proportion of the population who need special care as senior citizens is steadily increasing. However, the available funding for such care has, for many years, not kept up with the demand and while efficiencies and savings can be made, there comes a point where the cost of care exceeds the funding available to provide it. Indeed, some care homes for the elderly have already reached breaking point and there has been an 80% increase in the number of companies running such homes entering an insolvency process insolvency.
Care Homes – Costs Go Up, Demand Goes Up, Funding Doesn’t
Most care homes that provide care for older people are private businesses. These are people who, to a greater or lesser extent, need assistance of one form or another in order to continue with their lives. This care is paid for from a variety of sources including savings, the sale of assets, local authorities, and families.
One of the downsides of living longer is that savings have to last longer as well. The current state of the economy means that fewer families can afford to contribute to the care of elderly relatives. Funding from local authorities has been squeezed also.
Looking after those who need personal assistance in order to go about their lives, requires a lot of hands on work to be carried out by dedicated staff. However, the cost of employing such staff has increased significantly due to the introduction of the national minimum wage and the national living wage. Indeed, as noble as it is to ensure that the lowest paid workers in our society are fairly compensated for the work they do, there’s no denying that the sheer number of people employed by care homes means that even a small increase in statutory minimums makes a big difference in employment costs across the sector.
With nearly every facet of running care homes costing more year on year, it’s perhaps unsurprising that so many of the businesses who run care homes are not only struggling to make a profit but are becoming insolvent due to increased fiscal pressures.
How can a struggling care home survive insolvency?
The recent news and stark figures about the financial perils faced by businesses running care homes and other sectors of the care industry will possibly prompt government and local authorities to increase care home funding. However, it is unclear when this will be. In the meantime, what can care homes already struggling to meet their short term financial commitments do in order to continue providing care while they wait for the wheels of Government to turn in their direction?
A care home, like any other business, can consider a number of factors in order to trade profitably. At Lines Henry, we’re experts in helping businesses of all kinds and in all sectors deal with financial pressures in a constructive and efficient way. Care home insolvencies can be dealt with similarly to other types of business.
As experts in the field of insolvency, we’re well accustomed to assessing all aspects of an ailing company and making recommendations of the best course of action based on a full analysis of the facts.
If you’re concerned about the fiscal stability of a care home business, or indeed any other kind of business, the sooner you seek help, the better the outcome is likely to be. We offer a free consultation and, moreover, the reassurance of taking that vital first step towards a solution.
Speak to us, we can help.