Children's homes left in limbo

Sedgemoor, which has more than 65 homes and 14 schools throughout the country for children with complex needs, had been involved in talks with potential buyers but was unable to agree terms (CYP Now, 19-25 September 2007).

Last week KPMG Restructuring was appointed as administrator and subsequently negotiated the sale of 13 of the company's homes, each of which accommodates one to four children. However, a senior figure in the residential child care sector warned the future is "uncertain" for the rest of Sedgemoor's homes, schools and staff, adding: "Local authorities are making contingency plans in case any children have to be moved."

A spokesman for ECI, the private equity group that purchased Sedgemoor for £13m in 2000, said: "It's a tough market and Sedgemoor has struggled to keep pace, but the interests of the children are of paramount concern."

Jonathan Stanley, manager of the National Centre for Excellence in Residential Child Care, said: "This shows we need a national and regional strategy for residential childcare if we are to make stability a priority in children's services."

Sedgemoor's last publicly available accounts showed the company owed creditors more than £12m.

Keys Childcare has acquired 13 children's homes, three specialist schools and a foster care agency from Sedgemoor, securing 160 jobs in the process. Its marketing director Peter O'Neill said: "It is very much business as usual."