Able to trace its roots as a care home back more than 200 years, Balmanno House was facing significant cash flow issues due to increased operating costs and challenges of running a major care facility. These include staff shortages, costs of sourcing agency staff, rising food and energy bills, compliance costs and falling occupancy levels.

The care home will undergo a managed wind down with assistance from specialist interim care home management business, Healthcare Management Solutions Limited, which will assist with the management of Balmanno House during the wind down in line with Care Inspectorate guidelines for closures.

Balmanno House is a landmark Victorian villa built in 1874 and located at the junction of Great Western Road and Cleveden Road in the West End of Glasgow. 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. There are 68 full and part-time staff, and there have been no redundancies.

Chairman Allan Carrick 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.”

Blair Milne, restructuring partner with Azets and joint administrator, added: “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.”

Mr Milne added: “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.”