Private equity care home probe

The other day I asked ‘What does it take for a care provider to provide care?‘ and I said that the whole care system was ‘rotten to the core’.   Someone suggested that I ought to rephrase that.  I was largely referring to Southern Cross and Care UK, with a few other care providers lurking in the wings.

But, today, I read that the GMB, the union for care workers, is calling on various councils to investigate many aspects of Southern Cross’s operation.

New owner has links with secretive private equity and councils have a duty to ask why rents on Southern Cross care home buildings seems to be much higher than they should be says GMB.   Kent, East Sussexx and West Sussex County Councils are being asked to look into a recent deal whereby the freehold of two homes used to care for elderly residents by Southern Cross for these councils were sold for £14m and leased back for an annual rent of £1.12m.  This apparently equates to an annual rent per bed of £6,328.

Berkshire has also been asked questions:  GMB want all Berkshire councils to call for the Qatari Investment Authority to be transparent in its accounting and to end the use of tax havens like the Cayman Islandsto salt away taxpayers’ money. The Council has a responsibility to insist on transparency. This lack of transparency leads GMB to the conclusion that the rents charged are too high.

Northern Ireland too:  GMB is concerned about the lack of transparency regarding who owns these care homes and the financial returns to the ultimate owners of the properties.  Southern Cross has 25 homes in located in Northern Ireland employing 1,250 staff. Four Seasons has 64 homes in Northern Ireland and employs 3,000 staff in these homes. GMB has not been able to establish the asset value of these properties or their ultimate owners.

High rates of staff casualisation also lead to low quality care with a culture of petty cost cutting like no biscuits with the tea for the elderly residents.” (Paul Clarke, GMB National Organiser)

The cost of care was, until the recent general election, a hot topic of conversation, but suddenly it all seems to have been diluted “in the best interests” of the coalition, of course.

The GMB considers that all these issues may increase the likelihood of unnecessary deaths amongst care home residents and a general decline in care standards.   I’ll second that.  No Secrets, please.

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