Pledge to support Norfolk’s elderly if troubled care home provider collapses

Hundreds of elderly people living in Norfolk care homes were last night assured they would not be left without a roof over their heads if the firm which runs them collapses.

Care home provider Southern Cross, which is responsible for 15 homes in Norfolk, four in Suffolk and seven in Cambridgeshire, is to underpay its rent as it battles to find a long-term solution to its financial crisis.

Southern Cross, which with 750 care homes is Britain's largest care homes group, will pay nearly a third less rent than it is obliged to for the next four months as it struggles with its �230m annual rental bill. The cut – effectively a loan from its landlords – will be repaid when it is able to do so.

The company has until the end of the four-month period to agree a deal with its lending banks.

Southern Cross recently warned it was in a 'critical financial condition' as it unveiled a �311m loss in the six months to March 31.


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Last night Norfolk County Council, which has 317 people in Southern Cross care homes, said plans were in place, should the firm go under. It is likely to move them to alternative accommodation.

But that still raises question marks about what happens to those residents who were not placed in a Southern Cross home by the council.

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Labour Euro MP Richard Howitt urged the government to step in and bail out the stricken firm to protect the vulnerable residents.

And with councils putting the squeeze on care home fees within the private and independent sector in the wake of tightening budgets, fears are growing that other care home providers could struggle.

Mr Howitt warned frail residents could be made homeless and has written to health secretary Andrew Lansley demanding to know what will happen if the landlords do not accept a rent reduction and start to take back their homes, evicting residents.

'Money was found to bail out the bankers so why can't the government rescue a company that provides care to vulnerable older people,' he said. 'Government cuts have contributed to the financial meltdown of Southern Cross, so now I want to hear what they are going to do to pick up the pieces?

'The government talks about the Big Society but I want to live in a caring and compassionate society – not one that leaves the vulnerable high and dry.

'We are not talking about numbers on a balance sheet, but about mums, dads and grandparents whose long-term care should be a priority. It would be a terrible upheaval for residents to be forced to move from the place they call home.'

Hilary Macdonald, chief executive of Age UK Norfolk, said: 'The situation at Southern Care Homes is indicative of the depth of the crisis in social care and its consequent human cost.'

Harold Bodmer, director of community services at Norfolk County Council, said: 'We have been monitoring the situation closely for some months now and want to reassure residents from Norfolk in Southern Cross care homes and their families that there is currently no indication that the company will not be able to continue to provide the high quality of care we expect from them.

'We will continue to keep in close contact with Southern Cross regarding the services they provide for people from Norfolk and also have plans in place so we can react quickly, should the situation change, to ensure that the care needs of everyone affected would continue to be met.'

The union representing thousands of staff at care homes giant Southern Cross is calling on the government to step in to end 'uncertainty' over the future as the company continues to try to resolve its financial difficulties.

The GMB union, which has around 12,000 members working in the care homes, urged politicians across the UK to act to secure the future of staff and residents.

Local authority admissions declined by 15pc in the first half of the company's financial year, although there were more NHS referrals and private patients. Councils and the NHS account for 70pc of the company's patients. The company consequently saw revenues drop 3pc to �464m in the first half, as overall occupancy dropped by 3pc to just under 87pc.

The ongoing negotiations include a potential longer-term rent cut and disposals of some homes.

Christopher Fisher, chairman of Southern Cross, said: 'We believe all the key stakeholders in Southern Cross want this restructuring to succeed. We are in dialogue with the Department of Health, our lenders and landlords and they continue to support the process. Those landlords that do not want to take part in the longer-term restructuring will be able to review other options but it is in everyone's interests if this is as part of a larger, managed and orderly process.

'The objective will be to emerge with a stable and sustainable business model for the continuing care of our residents. Our primary concern is the continuity of care to all our 31,000 residents.'

Prime minister David Cameron's official spokesman gave a guarantee that affected residents would not 'lose out', adding: 'We are putting the interests of residents at the top of the list.'

Do you have relatives in a Southern Cross home or are you a member of staff? Contact Shaun Lowthorpe on 01603 772471 or email shaun.lowthorpe@archant.co.uk

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