Thousands face uncertain future as care home chain is broken up

Hundreds of Southern Cross care homes could be returned to companies registered overseas in tax havens where little information about their finances or their directors is publicly available.

Southern Cross, which runs 752 care homes in the UK, caused huge anxiety for its elderly residents and their relatives when it announced its closure yesterday after months of speculation about its financial woes.

Analysis by the GMB union revealed the names of 80 landlords who own 615 of the homes, many of which are subsidiaries of larger companies registered overseas. This makes it much harder to obtain financial information about the companies as rules governing accountability and transparency, especially in "tax havens" such as Jersey, Cayman Islands and British Virgin Islands are significantly more lax.

In addition, the GMB was unable to trace more than 120 landlords, which mean thousands of people are living in care homes where the identities of the owners and directors are unknown.

In the absence of full company accounts and other relevant information, such as the names of directors, it is "nigh on impossible" to assess whether they are suitable to run care homes funded in large part by public money, according to Andrew Craven, GMB statistician and researcher.

The findings come as Southern Cross tried to reassure 31,000 elderly residents and their families that their care would continue uninterrupted.

The shadow care service minister, Emily Thornberry, yesterday wrote to Health Minister Paul Burstow demanding he reassure people about the future of the homes.

Ms Thornberry said: "It's all very well for the chair of Southern Cross to say a deal has been agreed to ensure continuity of care, but it remains unclear that Ministers actually know who all the relevant landlords are.

"To avoid any further confusion the Government should publish a full list of these landlords and... confirm how it will guarantee that all homes are run to a sufficiently high standard."

About 100,000 care home beds are provided by private companies, and to a lesser extent, charities. Landlords identified by the GMB include Libra Careco, the largest provider with more than 200 homes, which is registered in the Cayman Islands. Its parent company, NHP, is part-owned by the Qatar Investment Authority – the chief executive of which is a Qatari royal.

The parent company of Four Seasons Health Care, which owns 400 homes, including 38 run by Southern Cross, is based in Guernsey. RBS, the state-owned bank, became its biggest shareholder earlier this year in exchange for writing off a £300m debt.

A Department of Health spokesperson said: "Whatever the outcome, no one will find themselves homeless or without care. We will not let that happen. Today's announcement does not change the position of residents. The Care Quality Commission will continue to monitor the services provided... We have been in constant contact over the course of discussions and remain ready to talk to all parties."

No longer taking care of business

Q Why is Southern Cross closing? It bought care homes, sold them on, and then rented them back, but can no longer afford to pay its rents. The terms and conditions of its contracts meant the margins were too tight, relying on high occupancy rates to stay in the black. Resident numbers have dropped since councils increased eligibility criteria to save money. Also, it is widely accepted that councils do not pay enough to cover all the costs.

Q Will homes close? Not immediately, as the majority are likely to be run by the landlords, at least in the short term. But the owners may soon rent out or sell some homes, which could lead to some day-to-day changes for residents. Some will likely eventually close. Staff may leave because of the uncertainty.

Q What happens then? Councils would be bound to find an alternative place for the 80 per cent of residents they put in the home, but not for self-payers.

Q Will other care homes go under? Probably. Many are under pressure which is being made worse by cuts to council budgets, and little is known about the financial health of many of the companies involved in social care in the UK.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: Technical Author / Multimedia Writer

Negotiable: Recruitment Genius: This recognized leader in providing software s...

Recruitment Genius: Clinical Lead / RGN

£40000 - £42000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: IT Sales Consultant

£35000 - £40000 per annum: Recruitment Genius: This IT support company has a n...

Recruitment Genius: Works Engineer

Negotiable: Recruitment Genius: A works engineer is required in a progressive ...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent