Cash-strapped Southern Cross may hand homes to landlords

 

Britain's largest care home provider, Southern Cross Healthcare, is planning to return one in five of its care homes to its landlords, potentially causing disruption to thousands of elderly residents.

Overall, Southern Cross plans to return 132 of its 752 properties as part of a financial restructuring package aimed at saving the struggling group from bankruptcy.

However, while many of the properties will be run as care homes by other operators or by the landlords themselves, documents produced by the company concede that a "double-digit" number of the homes may close.

This could mean hundreds of frail residents being forced to move into other care homes over the next year.

News of the closures comes just days after the company revealed plans to cut 3,000 jobs, including more than 300 nurses and 1,275 care staff.

Southern Cross has already been criticised over staffing levels in some of its homes. Yesterday the Care Quality Commission, which regulates the sector, said it would monitor developments on a case-by-case basis.

"CQC's role is to ensure all care homes meet essential standards of quality and safety – our primary concern is always the welfare of people who use services," said a spokesman.

"We will require Southern Cross to demonstrate that all its homes are meeting these essential standards; any failure to so may result in enforcement action."

Southern Cross is Britain's largest care home operator and looks after 31,000 elderly residents. But the company does not own the freehold to the vast majority of its homes. About 250 are owned by city bondholders which bought them from a private equity company five years ago.

Since then, the amount Southern Cross has had to pay in rent has risen by nearly 20 per cent to more than £200 million a year despite a falling rental market. At the same time residency rates have been falling.

The company has been attempting to negotiate rent reductions with landlords – but has met strong resistance. The admission that it may hand back homes could be an attempt to force landlords back to the negotiating table.

Southern Cross recently warned that it was in a "critical financial condition" and reported a £311 million loss in the six months to 31 March. It wants to reduce its annual rent bill from £202.3 million to £137.5 million and recently said it would cut the rent it paid to landlords by 30 per cent as it tries to give itself some breathing space. It told its 80 landlords it was keen to work with them to "enable the orderly transition to an alternative operator of their choice".

It confirmed plans to transfer 47 of the homes to landlords in the next four to six months, with the remaining 85 returned over the next two to five years. A spokesman said: "Southern Cross's paramount concern is minimising disruption for its residents."

A Department of Health spokeswoman said: "Ministers have made clear that the welfare of residents living in Southern Cross homes is paramount... The quality of care and continuity for residents must not be affected by staffing changes within homes. We expect the CQC to closely monitor standards of care and take action as appropriate."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Laura Trott with her gold
Commonwealth Games
Arts and Entertainment
Gal Gadot as Wonder Woman
film
News
Bryan had a bracelet given to him by his late father stolen during the raid
people
Sport
France striker Loic Remy
sportThe QPR striker flew to Boston earlier in the week to complete deal
Extras
indybestSpice up your knife with our selection of delicious toppings
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Copywriter - Corporate clients - Wimbledon

£21000 - £23000 per annum: Ashdown Group: Copywriter - London As a Copywrite...

Horticulture Lecturer / Tutor / Assessor - Derbyshire

£15 - £18 per hour: Randstad Education Nottingham: As a result of our successf...

Retail Lecturer / Assessor / Tutor - Derbyshire

£15 - £18 per hour: Randstad Education Nottingham: Randstad Education are succ...

Business Studies Tutor / Assessor / Lecturer - Tollerton

£15 - £18 per hour: Randstad Education Nottingham: Randstad Education are succ...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried