One of the UK’s longest-running care homes is set to be sold after suffering “severe and unsustainable cashflow” problems.
Balmanno House, a landmark Victorian-era building in the west end of Glasgow, can trace its roots as a care home back more than 200 years.
The registered charity has gone into administration after suffering from cashflow problems stemming from staff shortages, costs of sourcing agency staff, rising food and energy bills, compliance costs and falling occupancy levels.
Built in 1874 and located at the junction of Great Western Road and Cleveden Road, the building will be marketed for sale and Savills in Glasgow have 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, has contributed to trading losses.
There are 68 full and part-time staff, and there have been no redundancies.
Blair Milne and James Fennessey, partners with Azets, have been appointed joint administrators.
Balmanno House will continue trading while the administrators undertake a “managed wind down” of the business to minimise the impact on residents, families, staff and suppliers.
“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,” chairman Allan Carrick said.
“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.
“Finally on behalf of the trustees I would like to thank everyone involved with Balmanno House over the years, in particular our residents, families and staff, for their support.”
“The challenges facing care home operators are well documented, the most significant of which is recruitment and retention of nursing staff,” Mr Milne added.
“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.”