Southern Cross landlords set to create thousands of jobs

Plans to cut 3,000 jobs and reduce working conditions at Southern Cross are “dead in the water”, following the announcement of the company’s plans to close today, an expert has said.

Southern Cross landlords could be set to pour in millions and create thousands of jobs to turn around the ailing business under new operators, said healthcare analyst Paul Saper.

Southern Cross, which runs 752 care homes, announced today that all landlords would be taking back responsibility for their homes in the weeks or months ahead.

Of these, 250 homes will return to landlords who are themselves operators or have close links to operators, while the others are finalising arrangements.

The larger group includes landlords NHP and Loyds Properties, which between them own more than 300 Southern Cross homes. Separately, Loyds has gone into administration, a process overseen by Grant Thornton.

NHP and Grant Thornton are thought to be working to bring an experienced operator into their portfolio of homes with former Priory owner Chai Patel tipped. Last week Patel was brought in as an adviser to NHP on a possible shake-up of its homes, according to The Guardian. However it is unclear what will happen to the remaining homes.

Saper, director of the healthcare consultancy LCS International, said jobs would be protected as landlords would have to reinvest money in Southern Cross’s properties to improve their state and quality and address gaps in management numbers.

“All landlords or their bankers will have to invest millions,” he added.

On Patel’s possible appointment, Saper said: “They will probably start Chai off on a management basis anticipating that he will be able to stabilise the homes and quite quickly start to recover average occupancy rates and get a better mix and improve occupancy. More importantly they will hope to regain the confidence of the people working in the homes, partly through investment and upkeep of the homes but also through training.

“He’s not going to run things but he will be the figurehead to get people to come and work for him.”

Saper expects some homes to close, but only those that are no longer appropriate for modern care.

A Department of Health spokesperson said the government’s main concern remained the welfare of the residents living in Southern Cross homes.

“The company has announced its intention to ensure a smooth transition of homes to landlords and new operators,” she said. “We welcome the continued focus on maintaining continuity of care and to transfer care home staff to new operators on their current terms.

“The Care Quality Commission will continue to monitor the services provided. We have emphasised to CQC the importance of ensuring that the homes continue to comply with regulations and safety and quality requirements.”

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