The fate of the residents of Southern Cross’s care homes now lies in the hands of its landlords, from Qatar’s royal family to Sir Menzies Campbell, as Channel 4 News discovers.
Care home chain Southern Cross has confirmed that it will be wound up, with its 752 care homes across the country transferred to the landlords.
Around 250 of the care homes are owned by landlords who already run other care homes, or have links to operators who do so. For the remaining 500 care homes, the picture is less clear. Southern Cross has said these landlords are still “finalising their plans”, but stressed that it would ensure care was maintained for all 31,000 of its residents.
In reality, though, the future of these care homes is up to the landlords. But who are they? Channel 4 News investigates.
Union GMB has found the names of 80 landlords which own 615 of the Southern Cross care homes.
All this spells months more uncertainty and worry for residents and staff. Justin Bowden, GMB
Justin Bowden, GMB National Officer, said: “These 80 landlords are a rag-bag bunch… Many themselves are in financial difficulties. All this spells months more uncertainty and worry for residents and staff. Where is the Government in this care scandal?”
For one member of the Government, the unravelling of Southern Cross is even closer to home. Channel 4 News has confirmed that MP Sir Menzies Campbell, the former leader of the Liberal Democrats, is a non-executive director of an investment firm which owns one of the care homes, the Scottish American Investment Company.
His spokeswoman said: “It is Sir Menzies’ understanding that negotiations for another care provider to take over the running of the care home in question are at an advanced stage. Sir Menzies has no further comment to make.”
Other public figures also appear in GMB’s list include Oxford City Council and the Mayor and Burgesses of Southwark.
However the majority of homes are owned by big investment companies, including property investment group NHP. It is the largest landlord to Southern Cross and is owned by the Qatar Investment Authority, the investment vehicle of the Qatari state and its royal family.
The problem here is that many of these landlords are themselves in financial difficulties. NHP is struggling with a vast debt pile in the face of falling property values.
Mike Phillips, assistant editor of Property Week magazine, told Channel 4 News that this meant that in many cases the future of the Southern Cross care homes was down to the landlords’ banks, rather than the landlords themselves.
“Lots of these landlords are pretty heavily indebted. They will have to talk to their banks who should be willing to show some forbearance because the alternative is empty care homes – but there’s many a slip twixt the cup and the lip so there is no certainty,” he said.
Banks will have to accept several scenarios, all of which will mean renegotiating the landlords’ debts because they will have less money available to pay. But Mr Phillips said the alternative – empty care homes – was worse for all sides.
Read more on the Channel 4 News investigation into Southern Cross
“For landlords there is no interest in having an empty care home. A lot of these properties don’t have any other potential use,” he said.
“It is the same for the banks – it is down to the banks but again there is no point in the banks being hard nuts because they will end up getting no money back as well.”
He said all parties emerging from the unravelling of Southern Cross were “hard-nosed business people” and they would all be “fighting to get as much of it as possible without putting nanas on the street”.
However he said that the financial realities meant that closures were unlikely.
“The clarity for residents probably means there will be fewer closures. Southern Cross as a struggling company is out of the equation, and there is no point in people foreclosing on these homes. That would just be giving themselves a chance of zero money, but if they keep them open they may one day get some money back.
“But whatever happens, this is not a quick process.”