The UK’s largest care home operator, HC-One, has written to local authorities requesting an income guarantee during the coronavirus crisis.
In his letter, chief financial officer, David Smith, (pictured)requested commissioners to guarantee income at HC-One’s 90% occupancy level before the crisis.
The CFO said the income protection scheme, along with measures put in place by HC-One, was needed to support the care provider during this “unprecedented and challenging period”.
He wrote that modelling projections based on year to date and possible future infections and deaths suggest that occupancy could drop to 70% by July meaning HC-One will no longer be generating cash.
David said HC-One’s occupancy had declined by 6% since April 3 and currently stood at 84%. The operator has reported 637 COVID-19 related resident deaths and 3,171 infections. Three care workers have also lost their lives with 6% of staff unable to work due to isolation.
HC-One said its current death rate was three times higher than the previous year and was at record levels with fatalities running at eight times admissions.
David said HC-One, who he said was “well placed to face the challenges ahead” had put in place or was pursuing a number of balance sheet resilience strategies, including: payment deferrals with stakeholders, such as HMRC, landlords and lenders; exploring availability of Coronavirus Large Business Interruption Scheme loans; relaxation of lender financial covenants; equity contributions from shareholders; and working with social care commissioners on business as usual annual fee increases and additional COVID-19 support.
The CFO said these measures would be place HC-One in a better position to meet the coming challenges than other operators but may not be sufficient without further assistance.
Responding to the CFO’s letter, Cllr Ian Hudspeth, Chairman of the Local Government Association’s Community Wellbeing Board, told CHP: “Councils across the country are leading efforts to support communities through this unprecedented coronavirus crisis, including for our elderly and most vulnerable.
“The pressures they face are significant, wide-ranging and vary from place to place.
“Cost pressures caused by the impact of COVID-19, combined with lost income and savings opportunities, mean that councils will need up to four times what they have received from government to help deal with the crisis so far.
“Nearly half of the first allocation of £1.6 billion given to councils in March, to deal with the immediate impact of the pandemic across all council services, has been allocated to adult social care. The second tranche has yet to be paid to councils.
“There are many and growing calls on the COVID-19 funding made available to councils so far, across the full range of council services. Additional resources will be needed to allow councils to continue to support social care and other services.”