One of the UK’s longest continuously operating care homes, Balmanno House in the west end of Glasgow, has filed for administration.
Balmanno House, which can trace its roots as a care home back more than 200 years and was a registered charity, reported "severe and unsustainable" cash flow stemming from the rising costs of running a major care facility.
These include staff shortages, costs of sourcing agency staff, rising food and energy bills, compliance costs and falling occupancy levels.
Joint administrators Blair Milne and James Fennessey, partners with Azets, will continue to trade Balmanno House while undertaking a managed wind down of the business to minimise the impact on residents, families, staff and suppliers.
An interim care home management business, Healthcare Management Solutions, will assist the administrators with management, in line with Care Inspectorate guidelines for closures.
The Victorian villa was built in 1874 at the junction of Great Western Road and Cleveden Road. It will shortly be marketed for sale and Savills in Glasgow has been appointed as the property agents.
Balmanno House has 51 rooms, but occupancy levels were consistently at or below 85%, which, along with a sharp increase in operating costs, contributed to trading losses.
There are 68 full and part-time staff, and there have so far been no redundancies.
Chairman Allan Carrick said: “Sadly the unsustainable costs and challenges affecting the care sector in Scotland have made it impossible for Balmanno House to continue providing the high standard of residential care which has for so long been our hallmark.
“Balmanno House is very much a family and community facility, and we are acutely aware that it will be sorely missed.
“Our priority now is to ensure that we minimise any disruption during the transition phase, a process that will take several weeks to complete.”
Blair Milne, restructuring partner with Azets and joint administrator, added: “The challenges facing care home operators are well documented, the most significant of which is recruitment and retention of nursing staff.
“In order to maintain the safety of residents, care providers have become increasingly reliant upon agency workers which is very difficult to sustain commercially, even for short periods.
“The increased cost of providing nursing staff, added to the sharp rise in the costs of energy and food, has resulted in trading losses for Balmanno.
“Despite the best efforts of the directors to control operating costs and to increase revenue, it has sadly not been possible to return the business to profitability.“
Milne encouraged parties interested in the building to get in contact with Savills.
“Our legal obligation as administrators is to realise best value for the charity which owns Balmanno House - any surplus funds generated after all debts are met will be distributed to other charitable causes in due course.”
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