Threatened Southern Cross homes to stay open

A group of care homes earmarked for possible closure by stricken Southern Cross Healthcare have been saved after the landlord said it would take them over and keep them open.

Cash-strapped Southern Cross is locked in negotiations with landlords of all of its 752 care homes over a restructuring of its properties that could see many revert back to their original owners or close.

Landlord and care home provider Four Seasons said it had visited all 45 of its leased homes and does not intend to close any of them after taking them on, even though Southern Cross had labelled a "significant" number as commercially unviable.

The 45 care homes contain a total of 1,921 beds, with average occupancy of around 80% to 81%.

The staff and managers would transfer over with the homes, Four Seasons said, adding that it would work with Southern Cross to ensure a smooth transition with no disruption to residents.

Southern Cross, the UK's largest residential care home provider, has been brought to the brink of collapse by a combination of a rising rent bill and declining fees from local authorities as occupancy rates have declined.

The company has already negotiated a 30% rent cut from its landlords for four months to buy some breathing space while negotiations over a longer-term agreement continue.

That is expected to result in a number of landlords walking away from the group with Southern Cross likely to re-emerge as a much smaller company with about 400 homes, according to analysts.

Four Seasons, which owns and operates over 400 care centres and nursing homes in its own right, said it leased the 45 homes to Southern Cross under an historic arrangement.

It was widely expected to take them back and operate them itself. Unlike Southern Cross, it owns 60% of the homes it operates.

Another smaller landlord, Bondcare, which leases 40 homes to Southern Cross, has also said it will take them back and run them, though NHP and London & Regional, the two largest landlords, have not yet revealed their plans.

Concern about the impact of Southern Cross's financial problems on its 31,000 residents has made the issue of care for the elderly and infirm a key political topic.

The Government will today publish the findings of an investigation into care home funding by economist Andrew Dilnot.

It is expected to recommend a cap of £35,000 on individual liability for care costs and suggest local authorities make low-cost loans to people needing care, which could be set against any property they own.

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