Entrepreneur warns of care home crisis

Care home entrepreneur Phil Burgan has warned of a crisis in the elderly care market as the cost of looking after old people becomes unsustainable.

The chairman and CEO of Leeds-based Maria Mallaband Care Group (MMCG) told Insider: “The mass market is in disarray because no-one can afford the full costs of care. It is going to get worse before it gets better. Everyone recognises that but no-one wants to do anything about it.

“It is only when lots of care homes close that something will happen, and the demographics suggest that is three to four years away. A lot of old properties and smaller multiples will go to the wall.”

In September, MMCG took over 35 Southern Cross care homes, in a move that it says will create 2,250 jobs across the UK. The homes are managed by a new division called Countrywide Care Homes.

Burgan said Countrywide’s critical mass means that it can offer quality care with no fee increase for around three years. After that, he said, people will have to adjust to paying more for care.

He added that further acquisitions of distressed businesses were in the pipeline as MMCG looks to double the size of its business to 70 homes and up to 9,000 beds in the next three years. By 2013, he hopes to be building six new homes a year.

MMCG also provides specialist autism care under its Autism Care UK operation. In total, it employs more than 4,000 people, with 3,200 beds across the UK and turnover approaching £100m.