Care provider: The troubles besetting largest nursing home firm


Not many people have heard of Southern Cross. Yet around 37,000 elderly and vulnerable people rely on Britain's largest nursing home company for every aspect of their care.

The company is in trouble. It went into the red last year and has admitted it is holding talks with landlords to cope with its growing rent bills. It also has to face local authority cutbacks of over three per cent a year. Given that 60 per cent of Southern Cross's residents are paid for by local councils, difficult decisions are going to have to be made.

Chief executive, Jamie Buchan, says: "In the short term, despite our many efforts, we will still have to battle pretty hard against headwinds, including local authority cutbacks."

So is there any link between the cutbacks and the decision to close the company's Griffin Care Centre in Luton, following worrying lapses in standards, including allegations that medication was being mishandled and patients' care was suffering? The company insists not, but 25 of its 754 homes are embargoed for use by NHS patients, as they fail to meet minimum standards.

In Luton, the Care Quality Commission inspection found that a patient's leg wounds had been left unattended for 30 days while in another case residents were given a cocktail of drugs – despite an earlier warning from the commission to stop handing them out. Fifty-seven elderly residents had to be found new homes elsewhere.

Mr Buchan admits that cutbacks will effect care. "Investment levels in the sector will just reduce over time," he says. "The industry withers and vulnerable people are neglected. The huge concern is that older people do not receive the care they need."

The UK has over 400,000 older people in care homes who are generally well looked after. The problem is that in a small number of cases, some in Southern Cross homes, care is poorly administered and the dignity of the individual is not preserved. Those are the ones that make the headlines.

Southern Cross's share price has dropped from 538p, when floated by private equity group Blackstone in 2006, to just over 23p yesterday.