Care home insolvencies rise

The number of care homes going bust rose by 12% last year according to accountancy firm Wilkins Kennedy due to council budget cuts. The firm said that the number of homes going into insolvency increased from 60 to 67 in 2012 and pointed out that the continued rise in failing care homes comes despite a decline in total UK corporate insolvencies, which fell by 5% from 21,858 in 2011 to 20,731 in 2012. Corporate insolvencies fell back to pre-financial crisis levels at the end of 2012. The accountancy firm blamed local authority cuts for the insolvencies. It said that these cuts are leaving an increasing number of homes unable to service debt or maintain high standards of care. Stephen Grant, Partner at Wilkins Kennedy, commented: Care homes have been really hurt by local authority cutbacks. Local authority referrals are a major revenue stream for a sector that is weighed down by very high fixed costs.