Robert Kilgour, chairman of Renaissance Care Scotland, which currently operates seven care homes around Scotland, has urged the Chancellor to temporarily reduce VAT to 5% on health sector property refurbishments, renovations and improvements in his forthcoming March Budget.
Mr Kilgour is a well-known and respected figure in the industry, having founded Four Seasons Healthcare in 1989. Over the next decade he built Four Seasons into one of the most successful operators in the UK care sector, with 101 care homes throughout the country, 5,000 residents and over 6,000 staff. At present, health care companies, including care hope operators, cannot recover the VAT they spend as a general rule.
By cutting the VAT rate from 20% to 5%, Mr Kilgour argues the Chancellor could signal the green light for dozens of refurbishment programmes around the country, driving up standards in the care home industry and providing a boost to struggling construction companies.
He said: “Across the industry, I know of dozens of refurbishment programmes which simply can’t get off the starting blocks due to the costs involved.
“20% is too high a price to pay and finance when we’re talking about improvement works on healthcare properties that can run into hundreds of thousands of pounds at a time.
“By cutting the VAT rate to 5% for companies and partnerships in the healthcare sector, the Chancellor could at a stroke give the green light for dozens of projects across the UK, protect jobs and potentially create hundreds of new ones in the construction industry.
“As it is, these projects are not happening. This is not just the care home sector we’re talking about – children’s nurseries, dental practices, doctor’s surgeries and other healthcare properties could all benefit from this change in policy.
“Standards in the care home industry are improving. However, cutting the rate of VAT on capital refurbishment projects now will lead to a step change in the quality of care these facilities can offer now and for years into the future.
“The Treasury should consider that 5% of something is better than 20% of nothing.
“This measure would be a quick and effective way to boost the economy and would actually raise more net tax revenue in the long run than is happening at the moment.”
Mr Kilgour left Four Seasons in 1999 having successfully spearheaded the public-private takeover of Crestacare Plc in a deal worth £127 million.
The serial entrepreneur has maintained his involvement in the healthcare sector and last year took over the running of four former Southern Cross homes in Scotland, with a total of 200 beds and over 300 staff.
In addition, other care homes currently owned by Mr Kilgour’s company are Milford House in Duddingston, Edinburgh, Levenhall in Musselburgh and Glencairn in Edinburgh’s Grange area.
Issued by The BIG Partnership on behalf of Robert Kilgour
For more information, please contact Gavin Cameron, The BIG Partnership