Southern Cross action plan demanded
Wednesday 01 June 2011
The Government was tonight coming under increasing pressure to help end uncertainty over the future of thousands of elderly residents and staff at Britain's largest care homes group.
Southern Cross, responsible for looking after 31,000 elderly residents, has announced that it will underpay its rent from today as it struggles with a £230 million annual rental bill.
The firm, which owns almost 750 care homes and employs thousands of staff, will pay nearly a third less rent than it is obliged to for the next four months in what is effectively a loan from its landlords.
Officials said there was no threat of imminent closure of any of the homes but union leaders, and families of residents, called for urgent action to help ease mounting concern.
GMB general secretary Paul Kenny said: "The focus now has to be on what happens to the 31,000 elderly and vulnerable residents in Southern Cross homes across the UK.
"The GMB is calling on politicians across the country to step in and sort out the uncertainty that surrounds the future of these care homes.
"These are not factories facing closure, they are a vital part of the social fabric of every community."
Speaking outside the Tower Bridge Care Centre in Bermondsey, London, after visiting his father, Michael Rouse, 54, from south London, said: "It's all pretty mum at the moment, the staff are all very quiet and not quite sure themselves what's going on.
"It's a big concern because there's a lot of Alzheimer's people here and with Alzheimer's, you have to be comfortable with your surroundings.
"If you are comfortable where you are and used to it then you are a calmer person.
"If you took someone out of here and put them in another home, then the circumstances might change. It upsets them and drains them."
Stanley Tower, 74, from Rotherhithe, south London, who was visiting his sister Renee, 82, who has been at the home for nine years, said: "I'm worried about it.
"It would be a big difficulty for my sister. I can't look after her and she can't look after herself."
Gerry Martin, 43, from Dagenham, Essex, who delivers meat to the home, said: "This will probably mean one of our drivers losing his job as the meat comes out of the home's budget."
Southern Cross has warned it was in a "critical financial condition" as it unveiled a £311 million loss in the six months to March 31.
It is struggling with rising rent bills and faces declining local authority fees as fewer councils place residents with the company.
Local authority admissions declined by 15% in the first half of its financial year, though there were more NHS referrals and private patients. Councils and the NHS account for 70% of the company's patients.
The company consequently saw revenues drop 3% to £464 million in the first half as overall occupancy dropped by 3% to just under 87%.
The ongoing negotiations include a potential longer-term rent cut and disposals of some homes.
Some landlords, particularly those which are care home operators themselves such as Four Seasons, could choose to take back some of the Southern Cross homes.
The group announced that the rent deferral will run up until September 30.
Southern Cross said it was confident a "critical mass" of landlords will support restructuring plans which will be drawn up over the summer.
Chairman Christopher Fisher said: "We believe that all of the key stakeholders in Southern Cross want this restructuring to succeed.
"We are in dialogue with the Department of Health, our lenders and landlords and they continue to support the process."
Prime Minister David Cameron's official spokesman gave a guarantee that affected residents would not "lose out" in the process.
"We are clear that we are putting the interests of residents at the top of the list," he said.
"It may well be in their interests to keep them in the same place.
"But I think we have to look at that very carefully and we have got to let this process continue with the company and the various other interested parties.
"Our interest is to make sure these people are cared for effectively."
Asked if residents could take that as a guarantee that they would not lose out, he said: "Exactly right".
He declined to discuss whether there was any contingency in care budgets to meet any extra needs arising from the case.
Care Services Minister Paul Burstow said: "Our number one concern is the welfare of the residents living in Southern Cross homes.
"Ministers are following events carefully and officials at the Department of Health are in regular contact with the company's senior management, the Care Quality Commission and local authorities.
"It is for Southern Cross, its landlords and those with a stake in the business to put in place a plan to put the company on a firm footing. That is what they are doing.
"A running commentary on Southern Cross by ministers or Department of Health officials will not help.
"However, we are fully engaged with Southern Cross and making sure the interests of residents are protected."
Shadow health secretary John Healey said: "Thousands of very vulnerable people and their families will be worried sick by what's being reported about Southern Cross.
"Ministers must get a plan B in place if the company can't sort out its problems. People need to know they won't be left high and dry by the decisions of city hedge fund managers."
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