Editorial: The risk of a new Southern Cross

Share
Related Topics

After the collapse of Southern Cross more than a year ago, the Government said it would act to ensure that the finances of care homes were more transparent. Not only has this not happened, but – as we report today – three of the top 10 companies, responsible for 800-plus homes, may face difficulty paying off their debts. The ninth largest, Bondcare, has called in receivers.

The post-mortem on Southern Cross blamed its risky financial model, with its assumptions about property values and leases not borne out in practice. But the finances of most major care-home owners still rely on very complex structures and loan arrangements, and many companies are based offshore. Even with the best will in the world, the local authorities that commission much of the care and families trying to find a suitable home for elderly relatives lack the necessary information to gauge the soundness of an owner's finances. While a home may look satisfactory and meet all statutory requirements, there is almost nothing to prevent the situation changing overnight, if the owner runs into difficulty.

The care sector as a whole leaves much to be desired – from low pay, sparse staffing and poor standards of care at one end, to high fees, the low threshold at which individuals have to pay for all their care, and the way these so-called self-funders subsidise care for those whose fees are paid by the local authority. The whole system needs an overhaul. But the idea that this will, or should, reduce the role of private providers is unrealistic.

A charitable view might be that the Government has been waiting to legislate, intending to incorporate new financial requirements into its response to the year-old Dilnot report. With no sign of any decision on Dilnot, however, and the prospect of comprehensive reform, alas, receding, there is a case for legislating on care-home finances separately. The situation we reveal today shows that stricter scrutiny is required as a matter of urgency.

React Now

Latest stories from i100
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Recruitment Genius: Account Manager - Media Sales - £36,000 OTE

£28000 - £36000 per annum: Recruitment Genius: This award-winning company, whi...

Recruitment Genius: C# .NET Developer / Application Support - Junior

£21000 - £25000 per annum: Recruitment Genius: This business has an industry r...

Recruitment Genius: Office Administrator

Negotiable: Recruitment Genius: They make daily deliveries to most foodservice...

Recruitment Genius: Transport Planner

Negotiable: Recruitment Genius: They make daily deliveries to most foodservice...

Day In a Page

Read Next
A young person in the UK is now twice as likely to be poor as a pensioner  

Britain is no country for the young – in jobs, income or housing

Ben Chu
LaGuardia Airport: a relic from a different, gentler age  

New York's LaGuardia Airport to be rebuilt: It could become the best gateway to America

Simon Calder
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'
Singapore's domestic workers routinely exploited and often abused in the service of rich nationals

Singapore's hidden secret of domestic worker abuse

David Cameron was shown the country's shiniest veneer on his tour. What he didn't see was the army of foreign women who are routinely exploited and often abused in the service of rich nationals
Showdown by Shirley Jackson: A previously unpublished short story from the queen of American Gothic

Showdown, by Shirley Jackson

A previously unpublished short story from the queen of American Gothic
10 best DSLRs

Be sharp! 10 best DSLRs

Up your photography game with a versatile, powerful machine
Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash