Care homes could close in cash crisis

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THE future of more than 25 residential homes across South Yorkshire has been thrown into doubt as Britain’s biggest care home firm attempts to fight back from collapse.

Southern Cross, which operates a total of 26 care homes in the area, is trying to stave off bankruptcy by negotiating paying lower rents to landlords.

If the firm does go under many of its homes - including Alexander Court in Crookes, Swallow Wood in Mexborough and Eastfield Hall in Doncaster - could close, forcing frail, elderly residents to be moved into alternative accommodation.

Southern Cross, which run 750 care homes across the UK, has struggled to balance rising rents and a reduction in the amount councils are prepared to pay for state-funded care homes.

The company has announced it would delay paying a third of the rent it owes to landlords until September - estimated to amount to about £70 million.

It also wants to try to negotiate paying lower rents to landlords and is looking at ways to restructure the company’s debts.

The Government has said the welfare of the 31,000 residents in its homes is “paramount” and has been meeting with local social service directors to draw up emergency plans.

The firm is hoping to shave 30 per cent off its annual rental bill of £230m. Last month it warned it was in a “critical financial condition”, reporting a £311m loss in the six months to March 31.

A Department of Health spokesman said: “We will continue to keep in close touch with the situation and will work with local authorities, the Care Quality Commission and others, to ensure there is an effective response, which delivers protection to everyone affected.”

Christopher Fisher, chairman of Southern Cross, said: “We believe that all of the key stakeholders in Southern Cross want this restructuring to succeed.

“We are in dialogue with the Department of Health, our lenders and landlords, and they continue to support the process.

“The objective will be to emerge with a stable and sustainable business model for the continuing care of our residents.

“Our primary concern is the continuity of care to all our 31,000 residents.”