ELDERLY residents across Fenland are among those facing uncertainty with the announcement that care home provider Southern Cross is in financial trouble.
Southern Cross owns Broad Oaks in March; Friday House on March Road in Friday Bridge; Dove Court, Kirkgate Street in Walsoken and Strathmore House, Friday Bridge Road, Elm.
Big business has wrecked lives to make a quick buck. But the rot doesn’t stop at Southern Cross. Britain’s second biggest care home firm, Four Seasons, is also in financial difficulty.
Ten years ago, banks and investment funds poured money into buying local authority care homes.
Then the private equity boys moved in. They bought up firms, including Southern Cross, because they saw a chance to make money without spending any.
Private equity firm Blackstone bought Southern Cross for £162 million in 2004.
Blackstone used a ‘sale and leaseback’ strategy. It created a separate company and spun off Southern Cross’ property assets into it, which it later sold for as much as it had paid for the whole business.
The near-collapse of Southern Cross reveals the cancerous effect of the drive for profit in the care of the elderly.
Fortunately, the government has announced it will use public money to ensure those in the 750 affected care homes - including those in Fenland - can stay where they are.
Big business should have nothing to do with care homes. The government needs to nationalise Southern Cross with no compensation to shareholders.