Southern Cross, Britain's Biggest Care Home Provider, Confirms Closure

Southern Cross Care Homes Confirm Closure

Thousands of staff and elderly residents at Britain's largest care home group, Southern Cross, face an uncertain future as the group confirmed that it is taking steps towards an "orderly closure" following its insolvency. Shares in the company have been suspended, with immediate effect.

Southern Cross currently has 44, 000 employees and is responsible for the welfare of 31,000 elderly residents in 752 care homes. The announcement on Monday comes as little surprise. All year, it has been struggling to pay its £230m annual rental bill. Back in March, it warned that it could not afford its rent and rising operational costs.

For the past month, the embattled company's biggest landlords have been attempting to find a solution that would avoid pushing the care home company into insolvency. The crisis became apparent when the company cut rent payments to its landlords by 30 per cent. Controversially, Southern Cross had followed a policy of buying homes, then selling them on to landlords and leasing them back again.

"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."

Asked if residents could take that as a guarantee that they would not lose out, he said: "Exactly right".

Jamie Buchan, Chief Executive of Southern Cross, reiterated similar assurances on Monday: "My objective, and that of my team, is to continue to manage the programme of transition professionally". However, the details of this transition programme remain unknown.

Union leaders and opposition members have previously called on the government to intervene.

John Healey, the Shadow Health Secretary, said the development raised "serious questions" over government healthcare plans.

"Residents and their families must now hear from ministers what action they are taking to guarantee nobody ends up on the street, or is left with inadequate care provision.

"Southern Cross raises serious questions about David Cameron's plans to turn healthcare into a full scale market."


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