Research by accountancy firm Moore Stephens shows steady increase in number of care home providers entering insolvency
The number of care home providers going bust in England and Wales rose last year, according to research.
An analysis by accountancy firm Moore Stephens found 47 care home operators became insolvent in 2014-15, up from 40 the previous year and 35 in 2012-13.
Reductions in local authority fees and increasing property costs had piled pressure on providers, the research found. The introduction of the national living wage from April this year will add further strain on provider finances, it added.
Mike Finch, a partner at Moore Stephens, said many more care homes were being pushed to breaking point.
He said: “With funding from local authorities contributing a substantial amount to the revenue of care homes, there is understandable concern of the impact any further spending cuts would have on the sector. This is especially important as the cost of care in the UK remains high."
“Many care homes have also lost control over their increasing property costs by selling ownership of the property they occupy to an investor and then renting it back from the same investor with pre-agreed rent increases they can no longer afford.”