Four Seasons Healthcare, one of the largest owner-operators of care homes in the UK, has welcomed calls from the National Audit Office for greater scrutiny of company finances.
The NAO this week recommended stricter governance of owners and operators of care homes to avoid a repeat of the Southern Cross debacle.
High rents agreed via a sale-and-leaseback deal undertaken by Southern Cross during the boom ultimately led to the firm’s demise earlier this year.
MP Margaret Hodge said: “The department of health must get to grips with the very real risks to the social care market if we are to avoid another Southern Cross.
“Effective oversight of the care market, including market share of large providers at the local and regional level, is essential to protect social care users and taxpayers.”
A spokesman for Four Seasons, which took over 140 Southern Cross homes, said: “We support the call for government to have intelligence on the financial viability and operating performance of healthcare providers.”
He added: “We own 60% of the facilities we operate and are not so vulnerable to rents as was Southern Cross which leased the majority of their facilities. We have also built a number of protection measures into the leases we have taken over from Southern Cross. These include the agreement of a flexible rent cover with a number of landlords, which provides downside protection for the company in difficult trading conditions.”
joanna.bourke@estatesgazette.com
