Private equity turned vulnerable elderly people into human ATMs

Summary

On a spring morning in 1987, a 30-year-old man named Robert Kilgour pulled up beside a row of foamy cherry trees in the town of Kirkcaldy, on Scotland’s east coast, to visit an old hotel. The building was four storeys of blackened Victorian sandstone. Kilgour was a big man, a voluble Scot with a knack for storytelling. He already owned a hotel in Edinburgh but wanted to branch into property development and was planning to turn this old place, Station Court, into apartments. A few months after he completed the purchase, however, the Scottish government scrapped a grant for developers that he had been counting on. He had just sunk most of his personal savings into a useless building in a sodden, post-industrial town. He urgently needed a new idea.Care homes weren’t so different from hotels, Kilgour thought. And the beauty was, their elderly residents were unlikely to get drunk, steal the soap dispensers or invite sex workers back to their rooms. Turning Station Court into a care home seemed like the best way out of a bad situation. Kilgour arranged a bank loan and in June 1989 he launched Four Seasons Health Care, taking the name from a restaurant in Midtown Manhattan where he had once dined.By sheer luck, Kilgour had found himself at the start of something big. The following year, the government in Westminster started to transfer responsibility for social care on to local councils. This gave businessmen such as Kilgour a huge opportunity. Councils began paying them to provide beds that had previously been supplied by the NHS. Demand boomed.Kilgour opened three other homes in Kirkcaldy, another overlooking the Firth of Forth, and a further one near Dundee. Alongside running his new business, he juggled the pastimes of an increasingly wealthy man. He raised money for a cancer charity, played tennis, networked ceaselessly and began to dabble in politics, campaigning (and failing) to become one of Scotland’s few Conservative MPs. By 1997, he owned seven care homes across...