Southern Cross deal buys time for care home crisis

The government on Thursday welcomed a deal which could see an end to the financial troubles of Southern Cross.

The care home provider announced earlier that a deal had been struck to give four extra months to deliver a solution to the problems of the loss-making company.

A deal, hammered out at a crisis meeting between its landlords and lenders yesterday, is designed to allay fears that frail and elderly residents may suffer disruption if the company collapses.

It could also help restore confidence in the company, which runs 752 care homes, in a bid to stem the decline in the number of residents.

However, it is expected that many of its 80 landlords will withdraw their homes from the group in the coming months to run them independently.

Southern Cross has been struggling under a £202m annual rent burden with the company making losses of £311m in the six months to the end of March.

Resident care paramount

Care services minister Paul Burstow told MPs on Thursday that the agreement was a “welcome development”.

Mr Burstow insisted the welfare of the residents was of “paramount” concern and that no one would be left homeless or without care.

Southern Cross crisis puts quality of care at risk. Read more here

But he told MPs: “This is a commercial sector problem and we look to the commercial sector to solve it. All of the business interests involved fully understand their responsibilities.”

Labour MP Nick Smith, whose question forced Mr Burstow to come to the despatch box, said ministers had been “too slow to get a grip” on the crisis.

A Southern Cross spokesman said the quality of care to all residents would be “maintained” throughout the crisis.

Last week the company announced plans to cut more than 3,000 jobs from its workforce as part of a programme of change launched 18 months ago.

It followed an announcement that the company would cut its rent payments by an average of 30 per cent over the next four months to buy some breathing space for the financial crisis.

‘Quality of care at risk’

A Channel 4 News investigation uncovered evidence that the company’s problems were already impacting the quality of care it offers to residents.

Channel 4 News revealed last week that the care home regulator – the Care Quality Commission (CQC) – has recently criticised staffing levels in some homes in the six months to April.

A number of families of Southern Cross residents voiced concerns about the quality of care their loved ones received.

One resident, grandmother Ruby Pooley, was taken to hospital after being attacked twice by fellow residents. One of her attackers had been involved in two previous incidents.

At the time of the attack Mrs Pooley was already in fragile health. She was hospitalised and died seven days later of pneumonia and dementia.

Doctors and a coroner concluded Mrs Pooley’s death was unrelated to the attack, but her family told Channel 4 News she should have been better protected while in the care home.

“She was obviously very distressed, very bruised, and it had a noticeable effect on her – from that moment she never recovered,” Mrs Pooley’s grandson Gary said.

“To know that another resident had taken advantage or got to the point where she went into my nan’s room and assaulted her was quite difficult to take – but to see my nan in the state that she was after that was difficult for everyone.”

For more on the Channel 4 News investigation into Southern Cross care click here.