8 Jun 2011

Government plans for major failure of care home provider

Channel 4 News has obtained a Department of Health contingency plan documenting responsibilities in the event of the collapse of a care home provider amid fierce financial problems in the sector.

Government plans for major failure of care home provider

An internal Department of Health document shown to Channel 4 News outlines the “roles and responsibilities in the event of care home provider failure”.

Headed “draft for agreement – not government policy”, the paper sets out how local authorities will have to manage the transfer of residents to alternative care homes.

The industry watchdog, the Care Quality Commission, will “provide intelligence” about the location and quality of any alternative centres.

And central government, along with other responsibilities, should consider setting up a “national helpline” for those worried about family caught up in the crisis.

A Department of Health spokesperson confirmed to Channel 4 News that the government had prepared the document in order to properly plan for every eventuality.

Click here to read the document in full.

The Britain’s biggest care provider, Southern Cross announced on Wednesday plans to cut 3,000 jobs in the latest blow to the loss-making company.

Southern Cross, which is responsible for looking after some 31,000 residents, said the move was essential to address “staff effectiveness” across its 750 homes.

According to reports over 300 nurses and 1,275 care staff are among those set to lose their jobs.

It is understood that almost 700 catering posts will also be axed, as well as 440 domestic jobs and 238 maintenance posts.

The company said the proposals to slash the workforce by nearly 7 per cent, were part of its programme of change launched 18 months ago.

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

The company has insisted resident care would not be compromised by the financial difficulties.

A separate Channel 4 News investigation, uncovered new evidence about the impact the Southern Cross financial crisis is having on the care it offers to residents. Click here for a special report.

Earlier on Wednesday a leading union released a report into the care sector, warning that Southern Cross was not the only company on the “brink” of collapse.

The UNISON report revealed that Four Seasons, the second biggest care home, is also suffering from financial difficulties.

If both Southern Cross and Four Seasons were to collapse, around 1,150 nursing and residential care homes would be at risk of closure, affecting nearly 50,000 vulnerable people and their families and hitting over 60,000 staff.