A loss-making care home is set to close – the latest victim of a growing crisis over fee levels Devon – forcing 20 vulnerable dementia sufferers into a traumatic move and threatening up to 30 jobs.
The Eclipse Lodge is the second home to shut in Torquay this year, following a bitter dispute between Torbay Council and the home owners, who say fees are inadequate.
Paul Ewer, whose company Crocus Care has run the facility for 11 years, said he took the decision to close on March 8 with a "heavy heart" and is concerned about the implications for his clients.
He added: "There is a risk in moving them – they are settled and it can upset them so much – that's why it has taken me so long to come to this decision.
"Their mental faculties mean that from day to day they don't understand what's happening so when they move to new accommodation they can go downhill."
A group of owners has been pressing both Torbay and Devon County Council to up its fees to a viable level, including resorting to High Court action.
Mr Ewer told the Western Morning News he had been waiting for the result of Torbay council's fees review, which was approved just over a week ago.
But the new rates – £555 per week for nursing care and £409 for residential care – were not considered enough to turn around the ailing business, which has been losing money for two years and, despite a healthy 92% occupancy rate, was forecast by an independent report to run at a loss of £6,000 per year in future.
Mr Ewer, who runs another three homes, all of them profitable, says at least an extra £50 per week in fees was required to move into the black and around £100 to make the business profitable.
He said the council decision, combined with pressure from the bank, which ordered that the business either be closed or sold, has forced his hand.
"I have had no choice, I have been cross-financing this from other homes but I am not a charity," he added.
"Costs are up, profits are squeezed and I have had to look at the big picture – if I fund this too heavily I could bring the rest down."
Mr Ewer says other homes will follow, predicting an hitherto-unseen "level of attrition" in the sector.
Torbay and Southern Devon Health and Care NHS Trust, which operates homes for the council, said it would support clients and families, "taking into account at every step" their personal needs.
A spokesman said it had "worked very closely" with local providers to identify "appropriate and sustainable fee levels".
"The development of this new fees structure will obviously affect individual homes in different ways, but has the long-term safety, comfort and wellbeing of clients as its highest priority."