East Anglia: Landlord Four Seasons steps in to save 45 Southern Cross homes

THE owner of more than 40 care homes run by crisis-stricken operator Southern Cross, including four in the East of England, yesterday confirmed plans to take back control of the properties and keep them open.

Cash-strapped Southern Cross is currently in talks with the landlords of all of its 752 care homes over a restructuring which could see many revert to their owners or close.

Four Seasons, a major care operator in its own right which also leases 45 properties to Southern Cross, said yesterday that, following visits to each of the homes, it did not plan to close any of them after taking them back, despite Southern Cross having labelled a “significant” number as commercially unviable.

The 45 care homes contain a total of 1,921 beds, with average occupancy of 80% to 81%.

They include Barleycombe at Long Melford, near Sudbury, Hopes Green at Benfleet, Friday House at Wisbech, and St German’s House, King’s Lynn.

Four Seasons said staff and managers would transfer with the homes, adding that it would work with Southern Cross to ensure a smooth transition with no disruption to residents.

Southern Cross is the UK’s largest residential care home provider, with its portfolio including nearly 30 homes in Suffolk and Essex, but has been brought to the brink of collapse by a combination of a rising rent bill and declining fees from local authorities after a fall in occupancy rates.

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The company has already negotiated a 30% rent cut from its landlords for four months to buy some breathing space while negotiations over a longer-term agreement continue.

That is expected to result in a number of landlords walking away from the group with Southern Cross likely to re-emerge as a much smaller company with about 400 homes, according to analysts.

Four Seasons already runs more than 400 care centres and nursing homes. Unlike Southern Cross, it owns 60% of the homes it operates.

Southern Cross’s two largest landlords, NHP and London & Regional, have yet to confirm plans for their properties but another smaller landlord, Bondcare, which leases 40 homes to Southern, has also indicated that it plans to take its properties back.

Concern about the impact of Southern Cross’s financial problems on its 31,000 residents has helped make the issue of care for the elderly and infirm a key political topic.

The Government yesterday publish the findings of an investigation into care home funding by economist Andrew Dilnot.

It recommends a cap of �35,000 on individual liability for care costs as part of a package of changes ensuring that nobody requiring residential care in retirement will have to spend more than 30% of their assets paying for it. However, the reforms would cost the Government about �1.7billion a year.