Ministers are urged to step in over 4,000 Scots in care home crisis

Southern Cross, one of the UK's biggest care home providers, has announced it will be reducing its rent payments by a third as it cannot afford to meet its annual rental costs of 230 million any more.

The company looks after 31,000 elderly residents across the UK, including about 4,000 in Scotland, with 98 of its 750 care homes north of the Border.

The GMB union yesterday called on the UK government to make sure that elderly residents and staff jobs are protected in the event of Southern Cross having to go into receivership.

But with care devolved to Scotland there have also been calls on the SNP Scottish Government to act to protect the company's residents north of the Border.

Scottish Conservative health spokesman Murdo Fraser said: "These are worrying developments which will cause a great deal of concern and distress to elderly residents and their families. Many vulnerable older people face uncertainty about the future of these homes.

"Given the cross-border nature of Southern Cross it is vital Nicola Sturgeon works closely with the UK government and establishes a joined-up approach. Our number one concern must be establishing a secure future for the many vulnerable older people affected."

Last night health secretary Nicola Sturgeon said she intended to work alongside her UK counterparts to tackle the situation.

She has also held discussions with the Convention of Scottish Local Authorities (Cosla) about making sure provision and welfare is maintained for residents.

Ms Sturgeon said: "We are continuing to monitor the situation, and are in close contact with the care home provider, the Department of Health and other partners to ensure we are kept informed of all developments.

"Meanwhile, we are ensuring, alongside Cosla, that should Southern Cross go into administration provision for the care and welfare of all the residents are in place with minimum possible disruption."

Labour's shadow health secretary John Healey said: "Thousands of very vulnerable people and their families will be worried sick by what's being reported about Southern Cross.

"Ministers must get a plan B in place if the company can't sort out its problems. People need to know they won't be left high and dry by the decisions of City hedge fund managers."GMB general secretary Paul Kenny, who has 12,000 members employed by Southern Cross, added: "The focus now has to be on what happens to the 31,000 elderly and vulnerable residents in Southern Cross homes across the UK.

"The GMB is calling on politicians across the country to step in and sort out the uncertainty that surrounds the future of these care homes.

"These are not factories facing closure, they are a vital part of the social fabric of every community."

Care services minister Paul Burstow said the government was following events carefully and officials at the Department of Health were in regular contact with the company's senior management, the Care Quality Commission and local authorities.

He went on: "It is for Southern Cross, its landlords and those with a stake in the business to put in place a plan to put the company on a firm footing. That is what they are doing.

"A running commentary on Southern Cross by ministers or Department of Health officials will not help. However, we are fully engaged with Southern Cross and making sure the interests of residents are protected."

Southern Cross said it was confident a "critical mass" of landlords would support restructuring plans that will be drawn up over the summer. Chairman Christopher Fisher said: "We believe that all of the key stakeholders in Southern Cross want this restructuring to succeed."

The group said it expects to make a further statement about its proposals in July.