Care homes in limbo as Southern Cross shuts

11 July 2011

The UK's biggest care provider, Southern Cross, will shut down after landlords at all its homes said they want to leave the group.

The company currently has 752 care homes across the UK, providing care for 31,000 residents.

It said in its "restructuring update", plans were not finalised yet and it is committed to providing continuity to its 31,000 current residents.

The group will begin by transferring 250 of its homes over to new landlords and providers but it is has not been confirmed what will happen to its 44,000 staff.


Problems first arose in March when the company admitted it could not afford to pay the bill for its landlords.

At the time, the group said: "Southern Cross has been particularly challenged by the nature of the lease arrangements which underpin our business model. Within these leases, which are typically of a 25- to 35-year fixed term, rental payments are contracted to increase every

year and there is no provision to close a home. We are currently in the process of renegotiating the terms of our leases."

Then in early June it revealed it would have to defer 30% of its rent for the next four months while it grappled with its finances.

Although no further details have yet been announced, it is thought after new providers are confirmed residents will be informed.

Michelle Mitchell, charity director at Age UK, says this has been a really worrying few months for Southern Cross residents and their families, with these latest developments only adding to their concern.

"We would urge everyone involved in the potential transfer of the Southern Cross homes to put the needs of the residents first, remembering that those living in the homes are very vulnerable and frail.

"The current situation only serves to highlight the need for Monitor, the new regulator for health and social care, to be given greater powers including responsibility for ensuring the financial viability of care homes. Companies that are not able to show that they have a sustainable business model should not be allowed to run care homes."

Is someone you know in a Southern Cross care home? Read our guide on what will happen now.

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