Four Seasons Health Care goes into administration

One of Britain's largest care home groups, Four Seasons Health Care, has gone into administration.

Two of the holding companies behind the firm appointed administrators on Tuesday after struggling to repay their debts.

The group serves about 17,000 residents and patients and employs some 20,000 staff.

Four Seasons said the move would not affect care arrangements or lead to the closure of homes.

Group medical director Dr Claire Royston commented: "Today's news does not change the way we operate or how our homes are run or prompt any change for residents, families, employees and indeed suppliers.

"It marks the latest stage in the group's restructuring process and allows us to move ahead with an orderly, independent sales process."

It is the biggest care home group to have gone into administration since Southern Cross in 2011.

• Care home operator to withdraw services

• Brexit: Hospital suppliers stockpiling food

Four Seasons has struggled with cuts to local authority care fees and rising costs, and has repeatedly warned about its long-term stability.

The GMB union said the government needed to step in urgently to reassure Four Seasons staff and residents.

Rehana Azam, GMB national secretary, said: "The possible collapse of Four Seasons shows our care system is in crisis, it is crumbling beneath us because the funding isn't there."

Four Seasons said it had appointed professional services firm Alvarez & Marsal (A&M) to handle the administration.

While the holding companies - Elli Finance (UK) and Elli Investments - are in administration, the operating companies that run Four Season homes are not.

The group said it had secured funding to ensure continuity of care while it seeks a new owner.

Four Seasons, which has 322 residential and nursing care homes, has been struggling to restructure its debt pile of more than £500m.

Terra Firma Capital Partners, the private equity firm led by Guy Hands, bought the group in 2012 for £825m but has since seen a £450m writedown on its investment.

It has also ceded control of the group to US hedge fund H/2 Capital Partners, which holds a large amount of its debt.

A number of care businesses have run into trouble recently, raising questions about the current funding model for social care.

Last year, Allied Healthcare, which supports 13,000 people, said it was struggling with debts, blaming low fees paid by councils.

The Care Quality Commission, a regulator, later issued a notice saying it had serious doubts about Allied Healthcare's future.

A majority of Four Seasons' operations are funded by the state, with about a fifth of them funded privately.

Analysis

Colletta Smith, consumer affairs correspondent

If you live in a Four Seasons care home, the first thing to say is don't panic.

It's the job of the administrator to keep things running and try and find a buyer for all the care homes - nothing will change immediately.

If your care home is eventually earmarked for closure, your council is responsible for making sure everyone is cared for without any interruptions - you won't be left out on the street.

If the local authority pays for some or all of your care bill, it is responsible for finding new accommodation. You can choose another care home yourself, though, as long as it suits your needs and doesn't cost more than the council has agreed to spend.

If you pay your own bills, then you'll need to find a new home yourself. But the council may give suggestions and should do a care assessment to make sure you get something suitable.

It's also worth knowing that if several residents from the same home want to move together, then the council must try to help them do this, so it's worth asking.

If you're not happy with your care during the administration or under a new owner, you should tell the care regulator.