Care home operators 'won't touch' run-down Southern Cross stock

Published on Monday 11 July 2011 18:51

SOME care homes belonging to Southern Cross may struggle to find a new operator - while others will be forced to hike their fees for privately-funded residents by as much as £100 a week due to long-term neglect by the company, industry experts have warned.

Southern Cross, which owns 98 care homes north of the Border, announced yesterday it is to close after months of financial turmoil.

But a Scottish care home provider has claimed that fees for private residents living in facilities that are in need of cash investment could skyrocket as new operators struggle to recoup the investment needed to bring the neglected properties up to standard.

Meanwhile, the Scottish Government said it was "working on a presumption" that Scotland's 3,500 Southern Cross residents would be able to stay in their existing homes as new operators are found, sparking calls from opposition politicians for further action.

Tony Banks, owner of Forfar-based Balhousie Care Group, claimed a lack of investment by Southern Cross - which has struggled financially for some time - has left some of its Scottish homes in a poor state of repair, meaning any new operator would have to invest heavily to bring it up to standard.

Mr Banks, who has appeared on Channel Four's Secret Millionaire programme, is likely to take over about 20 to 30 of the Scottish Southern Cross homes. He told The Scotsman there were some his company would not consider due to their condition.

"Southern Cross has neglected to invest in a lot of its stock and it now needs a great deal of money spending on it," Mr Banks said.

"Operators like ourselves are going to cherry-pick - there are some properties in the portfolio that I would not touch. But if someone does (take one over] and then suddenly they have to spend 1m on it, then that is going to be reflected in the rent, which will be passed down to the residents."

Private residents can pay about 750 a week to live in care homes - the amount varies between operators - while local authority-funded residents' fees are set at 474.16, agreed annually between the Convention of Scottish Local Authorities and representatives of the independent care home sector.

Three-quarters of Scottish Southern Cross care homes have had complaints upheld in the past five years.

Mr Banks said the investment needed in some homes could force operators to raise fees by as much as 12 per cent, which would take an average private resident's bill up to 840 a week. He added that operators were already facing cash problems due to rising utility and food bills."Because there is an agreement over how much local authorities pay, it is already the private residents who have to bear the brunt," he said.

A spokesman for the charity Age Scotland said the situation was "deeply concerning", adding: "We would be appalled if this debacle at Southern Cross led to individuals being charged higher fees."

Southern Cross refused to comment.