Director of care home paid £2.27m

A director of a care home firm in Scotland — which is owned in a tax haven and pays some of its staff just over minimum wage — was paid £2.27m in 2020.

Barchester Healthcare — which is owned by Jersey-based Grove Limited — runs more than 200 care homes across the UK including 18 in Scotland. Some of its jobs for care workers are advertised at £9.90 an hour, just above minimum wage.

The Scottish Greens said it was “appalling” that a firm owned in a tax haven paid some staff this amount. Barchester Healthcare claimed that its remuneration scheme for staff is the “best in the care sector”.

The director’s pay was revealed by Trinava Consulting, which conducted research into profits made by care homes during the Covid-19 pandemic

“Rising profits raise concerns over whether the additional government funding was spent on the front line as intended”

Vivek Kotecha, Trinava Consulting

It said that seven of the 10 biggest adult social care providers for whom data was available saw their underlying profit margins widen between 2019 and 2020, the first year of the pandemic.

The study found that the highest paid director at Barchester Healthcare — which claimed hundreds of thousands of pounds in taxpayer-funded furlough money during the Covid-19 pandemic — was paid £2.27m in 2020, up from £2.02m in 2019 and £699,000 in 2015. In total the firm paid its seven directors £3.8m.

Barchester’s accounts for 2020 show its total revenue increased by £5.8m and its operating profit increased by £1.7m to £42.7m. It received £12.6m in government grants during 2020 which included money from the UK Government’s Infection Control Fund and covid support payments from Scottish local authorities.

Gillian Mackay, a Scottish Greens MSP, said: “For too long the care sector has been used by big companies to make a quick buck. I believe that as we build Scotland’s national care service, we should ensure that it is a person centred, rather than a profit driven service. It is simply appalling that an operator, based in a tax haven, will only pay some if its staff £9.90 while syphoning growing profits to directors.”

Vivek Kotecha, of Trinava Consulting, which provides business and financial analysis, said the pandemic “didn’t stop the growing gap between director and staff pay” in care homes. “Rising profits raise concerns over whether the additional government funding was spent on the front line as intended,” he added.

In reply, Barchester Healthcare pointed out it pays higher hourly rates than £9.90 for some roles, adding it is a “Scottish living wage employer” with a staff remuneration scheme which is the “best in the care sector with regular pay rises and loyalty bonuses”.

A company spokesperson said that a £700 loyalty bonus is being paid to staff this month and that during the pandemic it paid three additional bonuses to front-line staff in order to thank them for their “tireless work”.

“As part of our ongoing commitment to continually invest in the quality of care for residents and patients by recruiting and retaining the very best staff, we are adding to our sector-leading staff benefits and rewards with an additional £8.1m being invested in our pay and bonus structure in 2022,” the spokesperson added.

Regarding the £2.27m paid to a Barchester director, as per accounts lodged by the firm with Companies House, the firm’s spokesperson said the figure includes “a non-recurring payment related to a long term incentive plan maturing after a four year period”.

The spokesperson continued: “Far from cost-cutting, we are investing in our care homes. In the six years from 2015 to 2020 inclusive, we invested a total of some £56m in capital expenditure on property and improvements of our services, in order to ensure that residents are living and staff are working in the best possible conditions. Shareholders don’t take any dividends. All profit is reinvested into the business.”

In 2021 it was reported by The Times that Barchester Healthcare claimed hundreds of thousands of pounds in taxpayer-funded furlough money despite having banked millions in profits.

The report said the firm made a £21.8m pre-tax profit in the year to December 31, 2019, and claimed between £250,001 and £500,000 from the job retention scheme in March, £100,001 to £250,000 in both January and February, and £25,001 to £50,000 in December. 

In 2020 The Ferret revealed that dozens of Scotland’s care home buildings are owned by companies based in tax havens and controlled by global hedge funds, private equity and the Chinese government.

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