Thousands of elderly care home residents anxious about the uncertain future of a major care homes operator have been reassured that councils will help the business bounce back.
Southern Cross, which owns 750 care homes across the country, has been struggling to cope with a large and rising rent bill and declining fees from local authorities.
This has led to mounting concern among its 31,000 residents, their carers and their relatives.
But the Association of Directors of Adult Social Services has now called for calm, promising to help the company get back on its feet.
President Peter Hay said: “As councils buying care from Southern Cross, we are willing to work with all parties to support the recovery of the business. The care sector has many viable businesses delivering high quality care and we can achieve that for Southern Cross residents if all parties cooperate and continue to put the interests of residents and their families first.”
Local authorities buy the majority of residential places in Southern Cross homes and say they are still continuing to buy them.
Darlington-based Southern Cross welcomed Mr Hay’s intervention.
“The financial restructuring programme is under way and we’ve been holding discussions with all our shareholders,” a spokesman said. “So far the discussions have been constructive and we continue to work to secure a sustainable future for the business.”
Chairman Christopher Fisher said last week there was a “reasonable” chance that a deal to save the company would be agreed.
It has recently been locked in negotiations with the landlords of its care homes over a reduction in rents that it says it cannot afford to pay fully any longer. It has been suggested that up to 200 homes could close with patients moved to other premises. But if a deal is agreed, it is thought it could pave the way for a injection of up to £100 million of much-needed funds from new investors.