Southern Cross

The country's biggest care home provider, Southern Cross Healthcare, is to close after its landlords decided to leave the group.
In an announcement made on 11 July, it said that 250 of its homes will transfer back to their landlords where the latter are companies involved in delivering care themselves, such as Four Seasons Health Care or Bondcare.
The company's biggest landlord, NHP, has announced plans to set up a new company to run its 249 homes, in partnership with Court Cavendish, a firm run by former Priory Group boss Dr Chai Patel, backed by £14m in initial capital.
An announcement is due on the rest of Southern Cross's 752 homes, which involve landlords who are not involved in the care business. The company expects its current management to play a role in operating these homes in future.
In a statement on 19 July, care services minister Paul Burstow urged landlords to come up with plans as quickly as possible in order to reassure residents over continuity of care. He also vowed that the Care Quality Commission would not lower barriers for registration for the new operators of Southern Cross homes.
However, it has been claimed that landlords will have to make substantial investments in homes - including in carpets, curtains and general maintenance - to bring them up to scratch, though this has been denied by Southern Cross.
In an interview with Community Care, published on 29 July, Patel admitted that new operators faced a battle to earn the trust of residents and relatives and restore the reputation of the homes.
Calls for regulation
The crisis has sparked concern across government and the social care sector about the risks to service users of private companies delivering care going bust.
Ministers have pledged to do all they can to protect residents across the homes, while calls are growing for an economic regulator to be introduced to monitor the finances of large providers.
The company blamed "unsustainable" rent bills from the owners of its care homes and falling revenue from councils for its fate; however critics have blamed its lease-back business model, under which it sold its homes to landlords and signed long-term leases to run them.
While it was able to meet annual rises in rents when council spending on care home places was on the up, it is now unable to do so.
This situation contributed to losses of over £300m in the six months to 31 March 2011.
At the end of May, Southern Cross issued landlords with an ultimatum to accept 30% less on their rents from June to September to enable the company to get its finances in order, in what was described as a "declaration of war" on landlords that many were minded to reject.
There followed further discussions between the company, landlords and lendors to find a way forward, but these failed.
The crisis has also sparked concerns for the Southern Cross workforce, particularly after the provider announced 3,000 job losses and changes to working conditions, which unions said would damage the quality of care.
However, experts have said that landlords will have to invest in jobs as part of moves to bring Southern Cross homes up to scratch.
More Southern Cross coverage
D-Day for Southern Cross as landlords decide its future
Southern Cross tells landlords to accept rent cut or leave
Southern Cross plunges into red as councils slash funding
Fall in council income puts many care homes in financial peril
Ailing provider Southern Cross 'will not go into administration'
Ministers bid to protect residents of ailing care provider
Outsourcing adult care: For and against
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