Glasgow care home Balmanno House falls into administration

The landmark Balmanno House building in Glasgow’s West End is to be sold following its “orderly closure”.

Blair Milne and James Fennessey, partners of Azets, have been appointed joint administrators.

Balmanno House, which traces its roots as a nursing home to more than 200 years and was a registered charity, suffered from “serious and unsustainable cash flow problems stemming from the rising costs and challenges of running a large nursing facility,” according to the statement called the administrators.

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These included staffing shortages, agency staff sourcing costs, rising food and utility bills, compliance costs, and declining occupancy rates.

The joint administrators will continue to operate Balmanno House during a controlled winding-up of the business to minimize the impact on residents, families, employees and suppliers.

Healthcare Management Solutions Limited, a specialist temporary care home management company, will assist the managers in managing Balmanno House whilst overseeing its proper handling in accordance with the Care Inspectorate’s guidelines for closures.

Balmanno House was built in 1874 and is at the junction of the Great Western Road and Cleveden Road.

The building will shortly be put up for sale and Savills in Glasgow has been appointed as real estate agent.

Balmanno House has 51 rooms, but occupancy has consistently been at or below 85%, which combined with a sharp increase in operating costs has contributed to operating losses.

Azets said there are 68 full and part-time employees and there have been no layoffs.

Administrators said they would “provide every assistance to staff seeking alternative employment during the winding-up phase”.

Allan Carrick, chairman of the care home, said: “Unfortunately, the unsustainable costs and challenges affecting the care sector in Scotland have made it impossible for Balmanno House to continue to provide the high standard of residential care that has been our hallmark for so long.

“Balmanno House is very much a family and community establishment and we are very aware that it will be sorely missed.

“Our priority now is to ensure that we minimize any disruption during the transition phase, a process that will take several weeks.

“Finally, on behalf of the trustees, I would like to thank everyone who has been involved with Balmanno House over the years, particularly our residents, families and staff, for their support.”

Mr Milne, restructuring partner at Azets and joint administrator, said: “The challenges faced by care home operators are well documented, the most important of which is the recruitment and retention of care staff.

“To keep residents safe, care providers are increasingly dependent on temporary workers who are very difficult economically to maintain, even for short periods of time.

“The increased costs of providing nursing staff, in addition to the sharp increase in energy and food costs, have resulted in trading losses for Balmanno.

“Unfortunately, despite directors’ best efforts to control operating expenses and increase sales, the company has not been able to return to profitability.

“Our priority will be to stabilize business and ensure Balmanno House can operate as normally as possible.

“We will be working closely with the Care Inspectorate, the Glasgow Health and Social Care Partnership and local authorities to achieve an orderly closure of Balmanno whilst providing full support to residents and their families every step of the way in finding a suitable new care home .

“We will also be putting the building up for sale shortly and would encourage anyone interested to get in touch with Savills as soon as possible. Our legal obligation as administrators is to achieve the best value for the charity that owns Balmanno House.

“Any excess funds generated after all debts have been paid off will be distributed to other charities in due course.”

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