One of the UK’s longest continuously operating care homes has fallen into administration.
The landmark Balmanno House building in the West End of Glasgow is to be sold following its "orderly closure".
Blair Milne and James Fennessey, partners with Azets, have been appointed joint administrators.
Balmanno House, which can trace its roots as a care home back more than 200 years and was a registered charity, was suffering from "severe and unsustainable cash flow problems stemming from the rising costs and challenges of running a major care facility", the administrators said.
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This included staff shortages, costs of sourcing agency staff, rising food and energy bills, compliance costs and falling occupancy levels.
The joint administrators will continue to trade Balmanno House during a managed wind-down of the business to minimise the impact on residents, families, staff and suppliers.
A specialist interim care home management business, Healthcare Management Solutions Limited, will assist the administrators with the management of Balmanno House whilst overseeing the orderly wind-down in line with Care Inspectorate guidelines for closures.
Balmanno House was built in 1874 and sits at the junction of Great Western Road and Cleveden Road.
The building will shortly be marketed for sale and Savills in Glasgow have been appointed as the property agents.
Balmanno House has 51 rooms but occupancy levels were consistently at or below 85%, which, along with a sharp increase in operating costs, has contributed to trading losses.
Azets said there are 68 full and part-time staff, and there have been no redundancies.
The administrators said they will "provide every assistance to the staff seeking alternative employment during the wind-down period".
Allan Carrick, care home chairman, said: “Sadly the unsustainable costs and challenges affecting the care sector in Scotland have made it impossible for Balmanno House to continue providing the high standard of residential care which has for so long been our hallmark.
“Balmanno House is very much a family and community facility, and we are acutely aware that it will be sorely missed.
“Our priority now is to ensure that we minimise any disruption during the transition phase, a process that will take several weeks to complete.
“Finally on behalf of the trustees I would like to thank everyone involved with Balmanno House over the years, in particular our residents, families and staff, for their support.”
Mr Milne, restructuring partner with Azets and joint administrator, said: “The challenges facing care home operators are well documented, the most significant of which is recruitment and retention of nursing staff.
“In order to maintain the safety of residents, care providers have become increasingly reliant upon agency workers which is very difficult to sustain commercially, even for short periods.
“The increased cost of providing nursing staff, added to the sharp rise in the costs of energy and food, has resulted in trading losses for Balmanno.
“Despite the best efforts of the directors to control operating costs and to increase revenue it has sadly not been possible to return the business to profitability.
“Our priority will be to stabilise the business and ensure that Balmanno House can operate as normally as possible.
“We will work closely with the Care Inspectorate, Glasgow Health and Social Care Partnership and local authorities to achieve an orderly closure of Balmanno whilst fully supporting residents and their families through every step in finding a suitable new care home.
“We will also shortly be marketing the building for sale and would encourage any interested parties to contact Savills as soon as possible. Our legal obligation as administrators is to realise best value for the charity which owns Balmanno House.
“Any surplus funds generated after all debts are met will be distributed to other charitable causes in due course.”
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