Hyde sells bulk of care arm to Family Mosaic
Cuts to Supporting People funding have prompted Hyde Group to sell its entire care and support subsidiary.
The 39,600-home group’s subsidiary In Touch, which provides services to 4,200 people, will transfer to Family Mosaic in a deal finalised on Tuesday.
The £14 million-turnover subsidiary, including its 120 contracts, and 471 staff, will transfer on 1 August.
Steve White, chief executive of Hyde Group, said cuts to Supporting People funding had caused councils to drive down prices by paying less for contracts. He said that left small businesses like In Touch, unable to generate scale, less viable.
The government announced last October that Supporting People funding would be cut by 11.5 per cent, from £6.8 billion to £6 billion.
In Touch comprised more than three-quarters of Hyde’s Supporting People service, which lost £177,000 in the 12 months to 31 March this year, compared to a surplus of £81,000 the year before, its annual report published last week reveals.
Mr White said: ‘Before [last October’s] comprehensive spending review I would not have looked at doing this, instead I would have tried to grow it.
‘But trying to grow a business when commissioners, local authorities, are reducing prices is difficult.’
In Touch will become part of Family Mosaic’s larger Supporting People service, which has a turnover of around £50 million and, therefore, has more scope for efficiencies.
Brendan Sarsfield, chief executive of 20,000-home Family Mosaic said: ‘These are hard times in the sector and we believe you need to have a large and varied portfolio of contracts to thrive. In Touch will help us achieve this.’
Supporting People budgets are not ring-fenced. Inside Housing revealed in January that Supporting People funding will shrink in 16 town halls by more than 30 per cent.
