I first started talking about Southern Cross in my blog “Houses built on Sand” (16th January 2011), when I forecast the melt down of the company unless the Government took action – which I did not expect them to do.
Later on in Southern Cross Poker Game (5th April 2011), I talked about how the various stakeholders were setting about playing the game. Of course the frail elderly residents had no part in this process and it appears that none of the players had any regard for the residents’ welfare. This includes the Care Quality Commission who are the regulators responsible for the care of vulnerable adults!
I asked some key questions which are now being answered by the passage of time:-
Who has the strongest hand? -it belongs to the Government (alias the Department of Health) although they are playing a waiting game and forlornly hoping not to have to declare their hand.
Which player has the most money? – again the answer is the Government but they certainly don’t want to spend it on a bail out, at least until the landlords have conceded much lower rents in future.
Who will be the first to back down? on the face of it Southern Cross management laid down a strong card by forcing the landlords to accept a big drop in rent. In practice, I believe this was like a bee sting – painful for the landlords although they will get over it, but death for Southern Cross who will not survive the banker’s revenge.
Who has the strongest nerve? More through procrastination than courage, the answer to this question is again the Government. If they continue with callous disregard for the elderly residents, they can afford to wait and see if the landlords break ranks and try to secure better deals with new operators.
Should public outcry, which is remarkably silent at present, finally break out, then the politicians will have to face up to the consequences. The Government’s first card will be to use the puppet hand of the Care Quality Commission. Out of feigned and very belated concern for vulnerable adults, they will play their Ace of Clubs and stop all new admissions to Southern Cross homes.
This move will flush out the other players by forcing the landlords (banks and vulture capitalists don’t forget) to foreclose on Southern Cross’s management and appoint administrators to break up the company.
Between one and two hundred homes will likely close during this process, but that is collateral damage that the Government seems willing to accept. No corporate manslaughter charges are likely to follow even though higher death rates are the certain outcome of all this upheaval for residents.