“Southern Cross Double Cross”

It is 10 months since I first forecast the collapse of Southern Cross Healthcare (see “Houses Built on Sand” dated 16th January 2011).  Later, the news hit the headlines and I wrote about it under the title of “Southern Cross Poker Game” dated 5th April 2011 (click on “SOUTHERN CROSS” in the TAG cloud for other related posts).

The key players in the game have ridden out the storm of publicity and condemnation, but what have all their assurances to the 31,000 residents amounted to:-

THE SOUTHERN CROSS MANAGEMENT TEAM failed to secure the £100m of new investment they were vainlessly hoping to find and their shares on the stock exchange have now been suspended and are effectively worth nothing.

THE LANDLORDS (bankers and vulture capitalists) were forced to swallow a 30% rent reduction but some took their revenge by grabbing back operational control of the homes they own.  This doesn’t solve the problem, just passes the buck to other operators – one – Bondcare – who is already in administration, and another – Four Seasons – who look to be in financial difficulties themselves.   So this part of the story is far from over.

Meanwhile, there are still several hundred homes and thousands of residents left with an uncertain future.

  • The important CARE QUALITY COMMISSION has sought sticking plaster solutions to quality issues in some individual homes, but completely failed to grasp the big issue of corporate melt down.  Their definition of vulnerable adults obviously doesn’t include the 31,000 Southern Cross residents !
  • The GOVERNMENT, in spite of all the politicians feigned concern about the residents, have continued to sit on their hands.  So far the break-up of Southern Cross has suited them well, by allowing them to stand back, keep out of the limelight and not have to cough up any bail-out money.  Provided they are prepared to ignore residents’ worries, this short-term solution will hold for a while – maybe even until the next election.

In the long-term however, there has to be a more strategic review of the whole residential care sector.  Underfunding is endemic in the industry and Southern Cross is just the tip of a very big iceberg.

In my very first blog on this back in January 2011, I suggested the Government consider closing all the expensive Local Authority residential care provision and  move elderly long-term care out of the NHS into the private / charity sector.  Macro economics will force this to happen eventually, far better if the Department of Health were to step in with a positive pro-active plan to reconfigure the whole of long-term care provision for the elderly on a sounder financial foundation.

This is the only way residential care quality will improve and vulnerable adults will be better protected.

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1 Response to “Southern Cross Double Cross”

  1. Very subtle and very interesting to read, and to me personally absorbing. It is good someone can shed light all though it be a little on the future, where the care industry should be heading? I will follow this blog very closely and hope that the way forward as you may suggest is not fraught with indecision and confusion by the government, and the care home and the industry for homes for the elderly progress through the next 25 years. If one takes a snap shot it is comforting to know someone with experience is commenting constructively, but if this is to be the general direction we need good captains at the helm, and very clear explainations as we progrees together- the residents and the care industry?
    I do not wish to be the next South Cross debarcle?

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