The New Statesman broke this exclusive story on 28 July 2022, when Rishi Sunak was running to be Conservative Party leader. We are re-publishing it on 29 November 2022 in light of his comments as Prime Minister on the UK’s relationship with China.
Sixty-four care homes in the UK are tenants of the Chinese government, the New Statesman can reveal.
A Chinese state-funded investment group has used the UK’s opaque company ownership rules to buy scores of properties and land titles related to care homes in England and Wales, according to analysis shared exclusively with the New Statesman by the Centre for International Corporate Tax Accountability and Research (Cictar).
Care home residents and families are paying high fees to companies whose rents may be disappearing offshore rather than staying within the UK economy. This raises questions about who owns our care homes, and how profits from social care could be being siphoned offshore.
One of these care homes, Rosedale Care Home, is in Richmond, the north Yorkshire constituency of Rishi Sunak, the Conservative leadership candidate and former chancellor. Sunak is trying to talk tough on UK-China relations as part of his campaign and as chancellor he was responsible for a controversial new levy to fund social care. Rosedale’s fees reach £1,468 per week.
The care firm that runs Rosedale Care Home is called Maria Mallaband, whose landlord is HCP UK Investments (Jersey) Limited: a company held by the Beijing-based international private equity firm Cindat, an investor of which is China Cinda, an asset management company majority-owned by China’s Ministry of Finance.
Alexandra Court, a care home in the Defence Secretary Ben Wallace’s constituency of Wyre and Preston North, is in the same position, as is Oaklands Country Rest Home in Selby and Ainsty, the seat of Nigel Adams, a minister without portfolio who attends cabinet.
“Cindat is not a state-owned investment group. We’re controlled and managed independently by our finance team,” said John Stasinos, the managing director of healthcare at Cindat. “We’re no different from any other domestic or foreign investor. We have investors, one of which is China Cinda, a limited partner which is China-based.”
China Cinda did not respond to requests for comment. A spokesperson for Maria Mallaband declined to comment.
Data visualisation by Michael Goodier
This information, dug up by a forensic accountant for Cictar, a union-backed think tank, reveals offshore companies in general own 82 (12 per cent) of the 706 care homes in England run by one of the “Big Four” care providers (HC-One, Four Seasons, Barchester and Care UK).
Of Cindat's 64 properties and land parcels in England and Wales, 44 (69 per cent) are held through offshore companies based in Jersey. Cindat’s companies paid a total of £92.8m for 24 of these properties (where data is available on the Land Registry) – an average of £3.9m per property. Most of the properties were purchased in 2014-15. Cindat-owned care home properties and land titles are mainly concentrated in Greater Manchester and Yorkshire.
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“Turning care homes into financial assets, to be bought and sold by offshore companies, can have a very real impact on vulnerable residents and the workers who care for them,” said Toby Quantrill, operations coordinator at Cictar. “It is simply unacceptable not to be able to find out who owns the homes where our loved ones are cared for, and who may be benefiting financially from the fees we pay.”
The question of who actually owns the care home infrastructure that is increasingly relied upon by Britain's ageing population matters. Landlords with influence over the costs of providing care, and the economic viability of care homes, are not accountable to the public because of historically poor company ownership transparency in the UK. This particularly disempowers elderly and vulnerable people and their families who are paying high care fees.
“In theory, these landlords can decide they want to shut down the care home, or change its use; the fact that they’re offshore can make it very hard to know who is making that decision in order to challenge it,” said Vivek Kotecha, the independent forensic accountant behind this investigation.
“They don’t necessarily have any stake in the UK… We’re losing control over what I consider essential infrastructure – if we don’t know who owns and controls them, we have little idea what their plans are for them.”
If the care home company doesn’t own the building it uses, it will face rent rises each year – most likely linked to inflation. “If you think about that from the perspective of a local authority or family paying for care, that means effectively your cost of care is going up every year, or the care home has to find another cost to cut to meet that rising rent demand,” added Kotecha. This could have implications for the quality of the service.
"We are proud to be a dedicated capital provider to the UK care home space," countered Cindat's John Stasinos. "We provide liquidity, support and investment in a space that we consider critical to the care of the most frail in our society. It's a growing and very capital-intensive industry which attracts global capital."
Offshore ownership also concerns care home staff. Christina McAnea, general secretary of the Unison union, warned: “The government must remove profit-making from the sector, it diverts away scarce resources and damages the standard of care.
“Employees are overworked and underpaid by bosses," she said, who run "offshore accounts while pleading poverty. The consequences are chronic staffing shortages and little oversight of how money for care is actually spent.”