The Big Interview: care homes entrepreneur Robert Kilgour

Robert Kilgour is concerned about the continuing availability of workers from Europe in the labour-intensive care sector, and whether the government will pull its weight. Picture: Neil Hanna

Robert Kilgour instead finds himself, as he approaches his 60th birthday this year, with an empire of varied business interests, including founder shareholder and non-executive director of Fife radio franchisee Kingdom FM and co-founder and director of video and security systems firm NW Systems Group.

But while his enthusiasm for such ventures is clear, his most high-profile work is in care homes. “I have a lot of other business interests, but it’s still my first love,” he says.

Having founded Four Seasons Health Care in 1988, which grew from one home in Fife to become the UK’s largest operator with some 400 sites, 20,000 beds and about 30,000 staff, he left the company in 2000 and completed his financial exit in 2005.

It was sold for £775 million to Allianz Capital Partners in 2004 and in September 2006 was sold for £1.55 billion to a Qatari investment group.

Kilgour also set up Musselburgh-based Renaissance Care, where he is chairman. It has a network of 12 care homes in Scotland, about 560 beds and almost 800 staff, and is set to achieve turnover of nearly £20m this year, up from £17.2m last year and £2.44m in 2010.

Investment in the business remains a priority, despite a growing list of costs in an industry where margins are being squeezed ever tighter. It is pursuing a multi-million-pound capital investment programme, including the creation of a 45-bed private residential care suite at Beech Manor in Blairgowrie, and buying the Whitecraigs care home business in Glasgow’s Southside, with 58 beds and 90 staff.

The latter was bought from Four Seasons, and having overseen the rapid expansion of that business, Kilgour is now favouring more measured growth.

“I went UK-wide and things just grew and grew, and not always for the best.” His aim now “is not to be the biggest in Scotland. I would be very happy to be considered amongst the best.”

The plan is to remain focused purely north of the Border, expanding at a “sensible and sustainable” pace amid an expanding list of pressure.

With staffing a major expense, forecast at just over £12m this year, the firm is faced with problems such as the Scottish living wage for care workers, a rate of £8.25 an hour.

Kilgour stresses his support for the “progressive” initiative, which he expects to result in better staff recruitment and retention, “and hopefully therefore lower expensive staff agency costs”.

But with about three-quarters of residents at the firm’s homes local authority funded, “it’s only fair, in my view, that the Scottish Government as our main customer should properly fund the introduction of this”.

He reserves stronger criticism for the apprenticeship levy, saying training is a key priority for the business, having more than doubled its budget for this commitment over the past couple of years.

It is therefore “a bit of a smack in the face” to face not just this levy, but “concerns that it’s going to be just a payroll tax and we won’t actually be able to reclaim for training schemes much of what we’re going to be paying”.

And besides worker-related costs, simply reaching staffing requirements as Brexit takes effect is an understandable cause for concern.

Kilgour says about 30 per cent of Renaissance’s workers are from outside the UK, with half of that amount from the EU, and work is now under way to bring about a dozen staff over from the Philippines and India.

Having been a Remainer, Kilgour says that now the vote has gone the other way, “I have to roll my sleeves up… entrepreneurs can’t sit around moaning – they have to get on with it”.

And it is such persistence that he cites as an essential quality for an entrepreneur. “I enjoy the variety and challenge of it, and when you hit a brick wall you don’t turn around and go back – you find a way.”

Nonetheless, he is anxious about the future of the care sector overall. “There is no ‘fat’ left after several really tough years financially,” he says, calling for more government funding

“I am worried we’re potentially reaching a tipping point and I am concerned that we are seeing more homes closing and fewer new ones being built at a time when the demographic shows the need for more.”

In December it was reported that Four Seasons, for example, had shut down or sold 51 homes for the elderly over the previous 18 months, and planned to offload a similar number this year.

Kilgour notes that the growing net loss of care home beds is leading to “increased NHS bed blocking, cancelled operations as well as increased costs”.

It was recently revealed that some patients waited more than a year to be discharged from hospital, despite being ready to leave, with a wait of 508 days recorded for a patient in Dumfries and Galloway.

But despite Kilgour’s concerns over the sector’s outlook, he is of the opinion that the independent care home sector “does provide good quality of care and very good financial value for taxpayers’ money”.

Scottish Care, which represents more than 400 organisations, says the sector contributes to the employment of nearly 100,000 people and the provision of 83 per cent of care home places north of the border.

The digital world is also increasing its presence, as in so many other fields, by facilitating connections between organisations and individuals.

Kilgour – whose lengthy CV also includes co-founding webcam firm CamVista, which counted illusionist David Copperfield as a customer – says he embraces innovation.

After trialling technology from Scottish tech start-up StoriiCare, whose software has been described as “the Facebook for care homes” and helps how they interact with people with dementia, he invested a five-figure sum in the business and joined as a non-executive director.

He adds that he is aware of other ventures with great potential for the care home sector, “which has not traditionally been good at embracing new technology – but I think it’s going to have to be”.

And he says the “infectious” enthusiasm of those behind StoriiCare provide a welcome energy boost for Kilgour as he faces a daunting workload, splitting his time between Scotland and London.

“It’s tiring… but I like the variety of the involvement I have and I love supporting hard-working people.” He admits that while issues can sometimes all crop up at once, he is good at delegating. “I’m not a micro-manager. I deal with division strategy and the bigger picture stuff, and encourage and support the hard-working senior executive teams that run those businesses.”

He is keen to ensure that senior management have equity involvement. He owns three-quarters of Renaissance Care via his Edinburgh-based holding company Dow Investments, while its top managers hold the remainder, “because I want them to share in the efforts they put in”.

His start in the business world was selling jeans and T-shirts from a market stall at Ingliston, which was one reason he failed to finish his degree at the University of Stirling – “a big regret of mine”.

But he was already on course to be an entrepreneur, a skill that had already been evident during his schooldays. “I wasn’t hugely academic, but I was interested in doing things and creating things.”

After leaving university, his first major project was buying, managing, doing up and selling on a small hotel in Edinburgh’s New Town after increasing turnover by 400 per cent.

Career achievements are too numerous to list, but include opening an office in Siberia, serving on the CBI Scottish Council and becoming a fellow of the Chartered Management Institute, as well as involvement in lucrative property deals in New York and London.

But Kilgour says he now agrees with the advice from his entrepreneur father that creating employment is more satisfying than making money.

“There are buildings that I pass that were an empty field, and 20 years later there’s still a building there with a 60-bed care home on it, which has 90 part and full-time staff involved. There’s nothing like the feeling that an idea in your head came to fruition and 20 years later there are still jobs there. That is hugely satisfying.”