Council offers reassurance over crisis in care homes

They are the places we want to feel safe and secure in our twilight years.

But news that leading care home company Southern Cross is facing a dire financial crisis has sounded the alarm that the whole system is teetering on the edge.

And that is something which should alarm every generation whether it is mum, dad, grandad, grandma or child.

This week Norfolk County Council, which has 317 people placed in 15 Southern Cross homes including Badgers Wood in Drayton, Dussindale Park and Hillcrest in Thorpe, Blofield Road in Brundall, Mary Chapman Court in Dussindale and the Hawthorns in Unthank Road, assured people that they would not be left without a roof over their heads if the firm collapses.

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

But 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.

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'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.'

But how did it get to this point?

While it is true that most councils have either frozen or cut the fees they pay to the independent sector, Southern Cross is unusual in that it does not directly own the homes where it provides care, but has sold the freehold and rents them instead.

Dennis Bacon, chairman of Norfolk Independent Care, an umbrella organisation representing the sector, said that business model was largely to blame for its current financial difficulties. But he added many care home owners were struggling with the double whammy of councils freezing or cutting the amount of money they are prepared to pay in care fees, while banks are also refusing to lend to care home owners.

'What's happening is that the funding isn't coming through and occupancy rates are falling,' he said. 'Most banks look at health and social care lending as risk. People are concerned, I don't think there is any doubt about that.

I was involved in a joint piece of work with Norfolk County Council called the 'Fair Cost of Care' which found that the rate paid was clearly too low. There was a commitment to move towards a fair price for care – but the gap has widened. Some care providers are accepting local authority placements as low as �300 a week. That's not sustainable.'

David Harwood, cabinet member for adult social services at Norfolk County Council, said the authority had stuck with Southern Cross and had continued to place people in its homes because stopping that could have triggered a downward spiral.

'If we were to stop placing people, that would add to the pressure on Southern Cross and could push them into a deeper crisis,' Mr Harwood said. 'We will continue to place people there but will monitor the situation.

'We are fairly confident that they will work their way around this, but we have contingencies in place. We can spot purchase, if necessary and what I would hope to avoid is actually the closure of these homes.

'I don't think you could say that it's down to the fees local authorities pay for bed spaces,' Mr Harwood added.

'We froze our fees this year and last year, but we haven't cut them. We are planning an uplift for next year and the following year – that's what we are working into our budgets.

'Southern Cross negotiated the costs of their rents some time ago. The difficulty they face is around the changes in the market place which have come out worse for them.'

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.'

Are you or your family affected by the Southern Cross Homecare crisis? Contact reporter Shaun Lowthorpe on 01603 772471 or email