Lanarkshire: Methodist-backed retirement village in administration

However, the complex is understood to have been loss making since its acquisition by MHA Auchlochan in 2009.

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The parent association of MHA Auchlochan is Methodist Homes, a charity established by the Methodist Church in 1943.

Methodist Homes is said to have provided “significant” financial support but losses have continued to accrue at the Lanarkshire complex because of “uneconomic” service charges, staff and maintenance costs and low occupancy levels.

It was announced this morning that Blair Milne, James Fennessey and Robert Young, insolvency practitioners with accountancy firm Azets, have been appointed joint administrators of MHA Auchlochan.

Auchlochan sits in 50 acres of grounds and includes 235 properties, from studio flats through to three-bed bungalows. Some 55 of the flats and bungalows are currently vacant.

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The company also operates the Lower Johnshill care home, located within the village, and Bankhouse care home located within the neighbouring village of Lesmahagow.

There are 242 residents living in the flats and bungalows, and 118 residents living in the two care homes.

The joint administrators are continuing to operate the village and care homes as normal and will be appointing property agents to market the assets for sale.

A specialist interim care home management business, Healthcare Management Solutions Limited, has been appointed to oversee day-to-day operations and minimise the impact on residents, families, staff and suppliers. No redundancies have been made at this stage.

MHA chief executive Sam Monaghan said: “MHA took over Auchlochan Garden Village in 2009 to prevent it from going into administration. However, the operating model for Auchlochan means it has a range of complex legal, operating and funding issues across the village, which MHA has been unable to resolve despite investing considerable resources over the past 14 years. As a charity, we regret that we cannot continue to do this.

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“This is not a decision we have taken lightly and to support the continuation of services during the process of administration, Auchlochan will be able to draw on a contingency fund of £5 million from MHA. This will provide the best opportunity for new operators to be found, which includes the potential for leaseholders to set up their own management company.”

Mr Monaghan added that MHA will now also withdraw support for its three smaller retirement living schemes in Scotland – Westley Court in Granton, Edinburgh; Taransay Court in Milton, Glasgow; and St Andrew’s Court in St Andrews – “with a view to selling these to alternative providers”.

He said: “The schemes would be difficult to support without the larger infrastructure which Auchlochan gives us in Scotland. Together, these changes mean that MHA will no longer have any services in Scotland.”

Blair Milne, restructuring partner with Azets and joint administrator, said: “Auchlochan Garden Village has been experiencing significant losses since the development was acquired by MHA Auchlochan. Despite the best efforts of the directors, and extensive financial support from Methodist Homes, a viable turnaround could not be achieved outside of an administration process.

“Due to the scale and complexity of the development it will take time to develop a strategy for the administration. In the meantime, it will remain business as usual and we will work closely with the Care Inspectorate, South Lanarkshire Health and Social Care Partnership and specialist agencies to support residents and their families during the process. We will also be offering the development for sale, either in whole or in part and would encourage any interested parties to contact the Glasgow office of Azets as soon as possible.”