Ministers have intervened to protect the 31,000 residents of ailing care home provider Southern Cross Healthcare, after it admitted that it was no longer able to pay rents owed to the landlords who own its homes.
Government officials are in talks with the company about the plans it has for its financial future, leader of the House of Commons George Young told Parliament yesterday.
“I understand the concern on behalf of Southern Cross residents in the light of the financial problems that confront that company,” he said. “Southern Cross is having discussions with government officials about the plans that it has in place to address its financial difficulties and, crucially, to ensure that services are maintained. Ministers will continue to keep in close touch with the situation and will work with local authorities, the Care Quality Commission and others to ensure that there is an effective response that delivers protection to everyone affected.”
Young’s comments came in response to a question from Labour MP John Spellar, who said: “It is a company in financial crisis that has more than 750 care homes, 31,000 residents and many worried employees.”
They came a day after the issue was raised with David Cameron in Prime Minister’s Questions.
Earlier this week, Southern Cross chief executive Jamie Buchan said the company was trying to renegotiate the terms of its leases with landlords by July but with no guarantee of success.
“During the last several months, it has been a difficult trading environment for all care providers as commissioners such as local authorities grapple with the consequences of major budget cuts,” he said. “Southern Cross has been particularly affected because of the kind of lease arrangements which underpin our business model.”
“On the 14th March we released a statement which said that our rent obligations had become unsustainable and we planned to seek concessions from our landlords,” he added.
Buchan said it was in landlords’ interests to “reach an equitable solution with us to help stabilise our business”.
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