Sector response: Four Seasons Health Care

May 2, 2019

The sector has responded to the news that Four Seasons Health Care Group will be launching an independent sales process on 3rd May as the next stage of its restructuring.

Richard Fleming, Mark Firmin and Richard Beard of Alvarez & Marsal Europe LLP have been appointed as Joint Administrators to the holding companies that carry debt, Elli Investments Limited and Elli Finance (UK) Plc. Four Seasons Health Care has made it clear that these companies do not own or operate any care homes or hospitals directly.

The companies operating the care home and hospital operations are not in administration and continue to be run as normal by the existing teams. The funding agreement that has been set up ensures that residents and patients will have continuity of care during the sales process.

Dr Claire Royston, Group Medical Director of Four Seasons Health Care, commented, '[This] news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers. Our priority remains to deliver consistently good care. It marks the latest stage in the Group’s restructuring process and allows us to move ahead with an orderly, independent sales process.'

Richard Fleming, joint administrator of Elli Investments Limited and Elli Finance (UK) Plc added, 'We are committed to ensuring the Group delivers continuity of care as we work to undertake the independent sales process. The Group has continued to improve its quality ratings across their portfolio of homes and hospitals. The Group’s operations are fundamentally strong and a successful sales process will enhance those operations’ ability to thrive.'

Commenting on the announcement that Four Seasons Health Care has gone in to administration, Simon Bottery, Senior Fellow at The King’s Fund, said, ‘[This] announcement will be worrying for the 17,000 Four Seasons residents and their families, though it is important to recognise there is no immediate threat to the operation of Four Seasons’ care homes.

‘The problems facing Four Seasons show the extreme pressure that the social care system in England is under. Despite recent moves to shore up social care providers, years of chronic under-funding have left services at crisis point. As the Competition and Markets Authority has identified, many care homes that rely on publicly funded residents are now financially unsustainable.

‘It is not just care homes but the whole social care system which desperately needs reform. Successive administrations have promised to overhaul the system, yet two years after the government committed to publishing a social care green paper it is yet to see the light of day.’

The Independent Care Group (ICG) says large and small care providers are struggling and unless action is taken, the situation is going to get worse.

The ICG’s Chair, Mike Padgham, said, 'The first thing to say is that we very much hope the situation is stabilised soon. The top priority is the 17,000 clients and their families and we hope their care can be assured. Similarly, we feel for the 20,000 staff and very much hope their futures can be secured.

'Social care is in crisis and small, medium and large operators are all suffering...The need for the Government to come up with a rescue package for social care in its long-awaited green paper is now paramount, but we still don’t know when that will be released.

'We have to have action now or we will see more and more care operators struggling and the people who will suffer are the clients – the mothers, fathers, brothers, sisters, aunts and uncles who just aren’t getting the care they deserve.'

George McNamara, Director of Policy and Influencing at Independent Age, said of the Four Seasons Health Care news, '[This] announcement is a symptom of a neglected and broken social care system that Government has refused to address. This is turning upside down the lives of thousands of the most vulnerable people in society. While private providers can walk away, it is families and local authorities who are left to pick up the pieces, causing worry and anxiety about meeting the care needs of older people.

'We call on the Government to take urgent action to ensure vital care and support is continued so no older person is left high and dry. We can’t escape the fact that the two years that Government have dithered and delayed over social care reform means that older people are every day bearing the brunt of government inaction.'

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