Southern Cross faces break up

The future of Southern Cross has been uncertain since March
The future of Southern Cross has been uncertain since March

By Phil Scullion

Southern Cross is to be broken up after a late attempt to save the care home chain failed.

Residents are to face further uncertainty as the company's 752 homes are placed in the hands of landlords following the failure of last-minute negotiations to restructure the company's property arrangements.

Michelle Mitchell, charity director at Age UK, warned that the most recent developments would only add to residents' concerns.


"We would urge everyone involved in the potential transfer of the Southern Cross homes to put the needs of the residents first, remembering that those living in the homes are very vulnerable and frail," she added.

However Jamie Buchan, chief executive of Southern Cross, reassured the 31,000 residents of the care homes that efforts were being made to ensure standards are maintained amidst the changes.

He said: "My objective, and that of my team, is to continue to provide excellent care to every resident and to manage the programme of transition professionally."

Shareholders are set to lose out, with shares that had been worth £6 in 2007 now expected to have "little or no value" according to the company.

Christopher Fisher, chairman of Southern Cross, said: "We anticipate that the period of uncertainty which we have been experiencing will now draw to a close. We regret the loss of value which shareholders have experienced."

Two hundred and fifty of Southern Cross' homes will come under the ownership of landlords who are already care home operators, while the remaining 500 may well be sold on.

Ms Mitchell called for Monitor, the regulator for health and social care, to be given greater powers to ensure care homes are financially viable.

She continued: "Companies that are not able to show that they have a sustainable business model should not be allowed to run care homes."

The future of Southern Cross has been uncertain since March when it warned that its annual rental bill of £250 million was unsustainable.

Dave Prentis, leader of Unison, said: "This will be a major upheaval and tragedy for people living and working in these homes. It comes as a timely warning to David Cameron about the dangers of his plans to bring in more private companies to run public services."

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