Child care provider Sedgemoor goes into administration

Local authorities’ declining demand for residential child care has sent Sedgemoor, one of the sector’s biggest providers, into administration, its owners have said.

The company, which ran 65 homes and 14 schools for children with a range of behavioural and complex needs, has seen its profits decline since 2005, and went into administration last week.

It comes seven years after the provider was bought by private equity firm ECI for £13m.

A spokesperson for ECI said: “Until 2005, it was in a very strong position and profits grew from £1.5m to £3.4m. However, there’s been a change of tack by local authorities in using foster care instead of low-occupancy residential care and this has had an impact on Sedgemoor. It’s a disappointing outcome.”

Administrators Richard Hill and Jonathan Pope, of KPMG Corporate Recovery, have arranged the sale of 15 of Sedgemoor’s children’s homes, three schools and its fostering agency to fellow provider Keys Childcare.

However, though the future of the other services remains in doubt, the ECI spokesperson said continuity of care had been assured for all children in Sedgemoor’s care.

Keys marketing director Peter O’Neill said it had taken over ownership and management of services with 47 child care places and 160 staff. He said children would not be affected and that he wanted to reassure staff that they would be “protected” under the transfer of ownership.

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