Pledge over crisis at care home firm

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OLDER people will be looked after if efforts to save an ailing care home firm fail, say council chiefs.

Sunderland City Council is holding regular talks with beleaguered firm Southern Cross, which owns a number of care homes in Sunderland and Durham.

Fears have been growing for the future of the loss-making company, based in Darlington, which has announced it is reducing the rent paid to landlords.

Adult services chiefs at the council have now said plans are in place to cope with the worst should the firm get into further difficulty.

Neil Revely, executive director of the council’s Health, Housing and Adult Services section, said: “The city council has robust contingency plans in place to respond accordingly to any market changes affecting social care services, including any changes relating to residential homes.

“We also work in partnership with neighbouring councils and the health sector to ensure that plans are co-ordinated both locally and regionally.”

He added: “In relation to Southern Cross, we continue to work closely with the company, holding our usual regular meetings with its regional managers throughout the business restructuring currently underway and fully expect the continued operation of care services within their homes.

“We will continue to monitor the national situation with the Association of Directors of Adult Social Services and keep people informed of any developments.

“As stated previously, we fully expect the ongoing operation of the care services and are well aware of the situation as Southern Cross continue to restructure arrangements with their landlords.”

Southern Cross’s previous owners have taken flak for making millions selling their shares and have been blamed for the firm’s financial turmoil.

But a leading economist has said it was “not factually true” that private equity firm Blackstone had made the company unsustainable.

Southern Cross is responsible for looking after 31,000 elderly residents in the UK, including 1,750 and 106 care homes in the North East.

It announced last week it would underpay its rent as it struggles with a £230million annual bill. Southern Cross will pay nearly a third less rent than it is obliged to for the next four months.

The firm recently warned it was in a “critical financial condition” as it unveiled a £311million loss in the six months to March 31.

The GMB union, which has about 12,000 members working in Southern Cross homes, has urged politicians to move quickly to safeguard the company and its workforce.