Back to listing

04/01/2012

R3 comments on the challenges facing the care sector

“The Public Accounts Committee has recently said that there could be more business failures in the care sector, similar to that of Southern Cross, if the Government does not review the way in which care providers operate.

“Continuity of care is vital in this sector. The business rescue capabilities of insolvency practitioners will become increasingly important if providers continue to suffer under the pressures of reduced budgets, poor financial management and heavy resourcing requirements.

“However, rescue efforts may be hampered if property prices start to rise. At the moment, the businesses are worth more than the properties they operate in. If the value of the property rises then we may see mortgages providers seeking to sell the properties and businesses failing as a result.

“Regulators need to be prepared for the challenges that are facing the sector, ‘fleetness of foot’ will be essential in the face of another business failure the size of Southern Cross. As budgets shrink and care providers rack up debt, the Regulators should be monitoring their financial viability. At the moment the only financial review takes place as part of the licence application process.”

Alan Hudson, R3 Council Member and Partner, Transaction Advisory Services, Ernst & Young

-Ends-

For further information please contact:

 

Will Black, Communications Manager

 

T: 020 7566 4215 m: 07917 422 485 e: will.black@r3.org.uk

 

Antoinette Huka, Communications Officer

 

T : 020 7566 4217 m: 07825 679 462 e: antoinette.huka@r3.org.uk

Notes to editors:

  • R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK.
  • R3 comments on a variety of personal and corporate insolvency issues. Please contact the press office or see www.r3.org.uk for further information.
  • R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.
  •  Methodology note: BDRC Continental conducted 505 telephone interviews with small, medium and large business owners and Financial Directors between 7th and 18th November 2011. Quotas are set by size, region and sector and the data weighted to the profile of UK businesses. The respondent in each case is a senior financial decision maker.
 

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.