Soaring bills will force care homes to go bust
SOARING energy bills will be the ‘straw that breaks the camel’s back’ and lead to the collapse of care homes in Scotland, according to a top industry boss.
Robert Kilgour, founder of the Independent Care Homes Scotland group, said some smaller operators will go out of business because of the impact of unprecedented increases in gas and electricity costs as they attempt to recover from the Covid pandemic.
He also warned that the collapse of independent operators will pile more pressure on the NHS, leading to more people being stuck in hospital wards because they have nowhere to go.
Mr Kilgour, executive chairman of Renaissance Care, said his firm’s 16 homes are set to see electricity bills soar by 200 per cent – adding around £750,000 a year onto costs – and may need to delay capital investment plans.
He said: ‘I’ve heard of other care homes with gas and electricity bills coming up for renewal with up to 700 per cent increases, so 200 per cent is a hell of a lot but it is not the worst.
‘We’ve still got staffing and funding issues coming out of Covid and a lot of smaller care home groups are going to struggle.
‘I just feel it might be the straw that breaks the camel’s back for a lot of care homes. So many are in a precarious and weak financial position after 30 months of fighting against the pandemic.
‘This is a low blow to the sector that I worry might cause homes to close. If homes close then residents need to go elsewhere and we see more bed-blocking in hospitals and cancelled operations – it is all linked and there is a chain reaction from that happening.’
He said some food and drink costs, including coffee, olive oil and sunflower oil, have soared by more than 50 per cent in the last year, while insurance has soared by nearly a third. He added: ‘To be hit with a further blow of rising energy bills is something I definitely think will cause a lot of care homes to close and therefore the care home sector and the Scottish Government needs to work together on that.
‘There has not been enough attention on the business impact of the cost of living crisis, especially on SMEs (small and medium-sized enterprises).
‘A lot of care home companies
‘Precarious and weak position’
are already exhausted after the last 15 months, so I call on the Scottish Government to engage with the care home sector to stop this happening.’
A Scottish Government spokesman said: ‘The Scottish Government recognises the enormous burden that energy prices are putting on social care providers, including care homes, and we continue to discuss these and other issues with the sector.
‘Most of the economic powers needed to tackle the issue lie with UK ministers.’