Southern Cross Care Homes

Tuesday 12th July 2011 Commons Chamber

15:34

[Emily Thornberry (Islington South and Finsbury) (Lab)]

(Urgent Question): To ask the Secretary of State for Health if he will make a statement on the future of Southern Cross Care Homes.

[The Minister of State, Department of Health (Paul Burstow)]

As the House will be aware, Southern Cross has been working with its landlords and lenders to agree a restructuring process to secure a viable way forward for the future. As I set out to the House on 16 June, the Government have made it clear that our overriding concern is the welfare and safety of the 31,000 residents in Southern Cross’s care, and that we expect all parties to work together to secure a consensual, solvent restructuring of the business that meets their collective responsibility to secure the welfare and care of residents.

When I last updated the House on 16 June, Southern Cross, its landlords and lenders had the previous day announced an agreement to work through, over a period of four months, arrangements for a consensual, solvent restructuring. Yesterday’s announcement was one step in that ongoing process, and discussions to resolve the remaining steps continue.

I know that there is concern about what yesterday’s statement might mean, and that residents, families and staff are anxious to know what will happen next. Let me repeat the assurance I have given to House before: whatever the outcome, no one will find themselves homeless or without care. We will not stand by and let that happen. We will continue to work with the Association of Directors of Adult Social Services, the Local Government Association, the Care Quality Commission and others to ensure that there is an effective response to any potential disruption to the continuity of care and to ensure that all residents are indeed protected. A consensual restructuring that assures a smooth transition to new arrangements will mean that those contingency arrangements will not be needed. We all want that to happen.

Let me reassure hon. Members about some of the questions that I know they will have. First, yesterday’s announcement stated that at the end of the restructuring process the Southern Cross corporate entity will cease to exist. That has no effect on the provision of care or the operation of care homes. Southern Cross remains in operation, and will continue to operate all its care homes until any transfer to new operators takes place.

Secondly, the transfer of care homes to alternative operators will be a managed process that ensures continuity of services. Yesterday’s statement makes it clear that care home staff will transfer on their current terms, and that the service that residents receive should be unaffected by the transfer. All parties involved in the negotiations have given a clear commitment that the continuity of care will be paramount in that process. Local authorities are already working to ensure that they can assist in the smooth transfer of arrangements in respect of homes in their areas. The Department has been working with ADASS and the LGA to support that.

Thirdly, no transfer will take place without new operators being approved and registered by the CQC. There has been speculation that companies with no experience in the care sector will take over the running of homes, but that will not happen. Alternative operators will need to be reputable and experienced companies that can satisfy the CQC that they are capable of delivering high-quality care and of meeting all regulatory standards. The CQC will not drop its standards in ensuring that requirements are met. I understand that each of Southern Cross’s landlords is settling its arrangements regarding which care home operators to work with, which is an essential part of the ongoing discussions. That will cover all landlords, so that there is a clear way forward for all homes.

Finally, I assure the House that the CQC has been working with Southern Cross landlords and other stakeholders for several months to ensure the smooth transition of services, and that it has processes to deal with re-registration, and to undertake the essential checks that are needed as a priority. It is having ongoing conversations with Southern Cross, landlords and other providers on the timing of applications.

The Government’s priority is to ensure that the current problems with Southern Cross are resolved and that a sustainable way forward can be secured, but, as the Prime Minister has previously stated to the House, we must all be clear on what future action is taken and draw lessons from what has happened.

I said earlier that yesterday’s statement from Southern Cross was one step in a process that will be ongoing in the coming weeks and months. Until all future arrangements are settled, Southern Cross will continue to operate and to provide care in all its homes. Only at the end of the process, when all transfer arrangements have been completed, will Southern Cross as an entity cease to exist. By then, all homes will have a clear plan for future operation, and the continuity of care will have been secured. That is the approach that the Department of Health has taken. Officials are in daily contact with all relevant parties. This Government are not sitting back; we are fully engaged.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I thank the Minister for his statement, which was very informative, but he significantly exceeded his time. I will therefore allow the shadow Minister slightly more than her two minutes so that there is equity between the two sides. I emphasise for the future, however, that answers to urgent questions must be of the prescribed length, and the same goes for questions from now on.

[Emily Thornberry]

I thank the Minister for his response to my urgent question. Yesterday’s Southern Cross announcement that responsibility for managing 752 homes will pass back to the 80 landlords who own them has created a vacuum. I was interested to hear him say that that was part of a managed process, because it does not look like that—it has been a source of terrible uncertainty and great anxiety among residents and families. We have had so little information.

I am grateful for the information that the Minister has given today, but we need much more. Can the Government publish a list of all 80 landlords, or are the rumours correct that some of them have yet to be identified? Yesterday it was further announced that control of 250 of the homes would be handed back to the landlords immediately. We need to know which homes they are so that people living in them know who is running their home. Many of these landlords have little or no experience of running care homes. Does he have any information on the intentions of property companies such as London and Regional homes, which owns 90 former Southern Cross homes, or Prestbury, which owns 21?

I understand that the Association of Directors of Adult Social Services is doing its best to support its members, who will have a key role in ensuring that the operating companies can provide good quality care, and also that local authorities know how to perform financial stress tests to ensure that the new businesses have sound financial models, but what assistance is the Minister giving? Does he intend to provide additional resources to hard-pressed local authorities in order to help them? What advice can he give to local authorities if, for example, the new company is an offshore company? If the Department of Health does not have the expertise to assist ADASS, will he give that organisation access to officials from the Department for Business, Innovation and Skills, who might be able to provide that assistance?

Presumably, the new operators taking control of the homes will need to be registered with the Care Quality Commission—the Minister has assured us that that will happen—but given the staff shortages at the CQC will he assure us that the registrations will be completed quickly? The House has heard him guarantee that the new operators will honour the previous terms and conditions of the 44,000 employees, but how does that square with the announcement of 3,000 job losses? Does he know how many homes are likely to close and what the timetable is for such closures? What will happen to the 50 former Southern Cross homes owned by Lloyds properties, which is in administration? What about NHP, which owns 250 former Southern Cross homes and which is at a standstill with its bondholders? These problems must be addressed. We need a home-by-home plan from the landlords, and he must give us that plan. The buck stops with him. Will he now accept his responsibilities?

[Paul Burstow]

My slightly-longer-than-it-should-have-been answer to the hon. Lady’s question was an attempt to set out as much detail as was possible about the steps being taken to achieve a consensual, solvent restructuring of the business so that the homes can continue to operate. That is what my answer was all about. She asked about the role of the CQC, which, as I said to her, has been working for some months with the landlords to ensure a smooth process of re-registration as new operators are identified to take on the running of individual homes. I also said in response to her initial question that every home will be transferred. There is a plan in place that will lead to all homes being transferred over the next four months. She asked about engagement with BIS. Of course, as part of the ongoing work, the Department of Health is engaging with BIS to ensure that we have the very best advice in dealing with these issues. The Government have been—and remain—fully engaged with the process.

[Mr Stephen Dorrell (Charnwood) (Con)]

For the avoidance of doubt, will my hon. Friend confirm that the Government’s policy since the beginning of this saga has been motivated by a single and paramount concern—to secure the continued and orderly delivery of care to the right standards to the residents of these homes—and that, in that respect, this Government are operating unchanged precisely the policy operated by their predecessors?

[Paul Burstow]

My right hon. Friend is absolutely right to make that point, which allows me to make another point. The Health and Social Care Bill is currently before this House—Members are enjoying the Committee stage at this very moment—and it contains the very provisions that will allow us to put in place a regime, which currently does not exist, to ensure proper oversight and engagement with those issues from a central Government perspective. The previous Government did not leave such a regime in place, nor did they put in place the necessary tools to allow the Government to do everything that they might want to do and that the hon. Member for Islington South and Finsbury (Emily Thornberry) might like us to do.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Does the Minister accept that if any elderly people are moved out of their homes, there will be an increased incidence of death and a reduction in people’s mental and physical health? What measures is he taking to ensure that as few people as possible are moved from those homes?

[Paul Burstow]

The right hon. Gentleman is absolutely right: we are working hard with the landlords, lenders and others to ensure that those risks are minimised, because the trauma of a hasty care home move and a forced closure leads to exactly those consequences. The Association of Directors of Adult Social Services has published new guidance for its members to manage those difficult decisions and processes and to minimise that risk as far as humanly possible.

[Mr Stewart Jackson (Peterborough) (Con)]

This is not a time for party political point scoring. The House will have been reassured by the Minister’s comments, as will the many residents of Astoria Park Southern Cross home in Park crescent, Peterborough, along with their families. The only point I would make to the Minister is that when the immediate crisis has been resolved, there should be a mechanism to work with key stakeholders such as the Care Quality Commission to understand the lessons of the flawed business model that Southern Cross pursued.

[Paul Burstow]

My hon. Friend is absolutely right, and that is indeed one of the many issues we need to consider as we proceed towards publishing a White Paper next year on social care reform. We have to ask questions about the regulatory framework that existed when that business model was established. We also need to ensure that we have the necessary tools to deal with large care home providers of this sort, where an individual local authority might be unable to cope with the consequences. Those are the issues that we are working with and that we shall continue to work with.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

The Minister gave a list of consultations and apparently daily meetings of his officials with care home providers and landlords. The one group that was markedly lacking in the process was the residents of the homes and their families. When will they be included in this process? Who will be responsible for informing them of the timeline if there have to be moves, and will they be in a position to object strongly if, for example, an elderly person does not wish to be moved from the home in which they are resident? Who is responsible for informing those people?

[Paul Burstow]

The first thing to say is that everything I have set out for the House today is about minimising the numbers of closures and moves. It is about ensuring continuity of care and continuing care in existing care homes. However, having said that, I made the point in response to her right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) that there is new guidance for local authorities on how they engage with the residents of care homes and their families, and it is the responsibility of local authorities to do just that.

[Andrew Percy (Brigg and Goole) (Con)]

Were it not for my two county councils, information about the two homes in my constituency—Windsor Court in Goole and St Mary’s in Scunthorpe—would not have been forthcoming at all. Given that it has also taken me several weeks to try—unsuccessfully—to get Southern Cross to allow me even to visit their homes, can the Minister give me an assurance that he will do everything he can to ensure that we are given home-specific information as quickly as possible? If such information is not being made available to Members of Parliament, it is probably not being made available to residents or their families.

[Paul Burstow]

Yes, and I gladly undertake to ensure that if further information needs to be shared during the summer recess, hon. Members in all parts of the House will receive it in a timely fashion, so that they can address their constituents’ concerns.

[Hywel Williams (Arfon) (PC)]

There are 1,772 people in 35 Southern Cross homes in Wales, but I did not hear the Minister refer to them at all in his answer. Where does the buck stop, as far as they are concerned? Is it with Welsh local authorities, with the Welsh Government, or with him, even though this matter is devolved?

[Paul Burstow]

I have had, and continue to have, contacts with the Ministers responsible for policy in this area in the devolved Administrations, but the legal responsibility for continuity of care from the point of view of the public purse rests with the local authorities. That is where the legal powers sit, and it is where the legal responsibility has to be placed. We are working with the Local Government Association and others to ensure that the local authorities are able to put contingency plans in place.

[Ben Gummer (Ipswich) (Con)]

Lombardy Park in my constituency provides residential care for extremely vulnerable young adults with severe learning difficulties. They, and especially their parents and families, are extremely concerned about what is going on. What reassurance can the Minister give them that those residents will be protected and looked after?

[Paul Burstow]

I understand entirely the point that my hon. Friend and other hon. Members are making on behalf of their constituents. The nature of the reporting of the announcement yesterday, and other announcements before it, is a source of worry for residents, staff and families. I hope that today’s statement will go some way towards giving them some reassurance. Equally, it will not help the successful, solvent restructuring of the business, which will provide that continuity of care, if we have an endless commentary on it. What is important is that the necessary actions are taken, and they are being taken.

[Vernon Coaker (Gedling) (Lab)]

Does not the Minister understand that it is not endless commentary that we want from him but some reassurance for residents in these homes? Also, it is not continuity of care that they want, but continuity of the place in which they live. These are not just residential homes; they are places where people live, and they form a valuable part of the community. What reassurance can the Minister give us that this is not only about continuity of care for those people but about their having continuity of residence in the home they live in?

[Paul Burstow]

The hon. Gentleman is absolutely right; this is about people’s homes and their futures. That is why the Government have been working to make it abundantly clear to all those involved in the process what their responsibilities are, and what the local authorities’ responsibilities are. We have also made it abundantly clear that in no circumstances will the Government do anything other than ensure the future continuity of care for people. No one will be made homeless, and no one will wind up without the care and support they need.

[Greg Mulholland (Leeds North West) (LD)]

Considering the real concern in areas around the country, including Leeds, and the clear duty of local authorities in this role, does the Minister agree that it is inappropriate and irresponsible for councils such as Leeds city council to pursue a raft of closures in their own care homes while this problem clearly exists?

[Paul Burstow]

My hon. Friend tempts me to comment on an individual local authority’s decisions, the details of which I do not have. It seems to me that that is an area that the council in question will have to look at carefully. The key thing has to be that local authorities are responsible for looking at the availability of good- quality care home placements in their area and to supply individuals who are funded by the local authority and who need a decent care home with just that.

[Dame Anne Begg (Aberdeen South) (Lab)]

I have nine Southern Cross homes in my constituency, and they are sitting on some very expensive real estate. The problem for Southern Cross was that its rents were too high. What negotiations has the Minister undertaken with the landlords to ensure that that problem does not continue and beset the new operators who we hope will take over the running of those facilities?

[Paul Burstow]

I do not know the particulars of the homes to which the hon. Lady refers, but if she would like to write to me with more details, I will certainly look at that matter. Many of the homes that Southern Cross owns have been specifically built and designed to provide residential care for older people, and there is therefore no other purpose for which they could usefully be converted—[Interruption.] Opposition Members might chunter about that, but that is why a consensual, solvent restructuring is now the best and most likely outcome of the process.

[Mr Robert Buckland (South Swindon) (Con)]

The residents, staff and families of the King’s Court home in my constituency will be encouraged by what they have heard today, but will my hon. Friend write to me with all the relevant information about the key issues of continuity and quality of care provision at King’s Court?

[Paul Burstow]

My hon. Friend is right to bring to my attention, and that of the House, the concerns of his constituents. I certainly hope that the statement I was able to make today is of some reassurance, along with the commitment I made to continue to keep both the House and individual hon. Members informed as this matter goes forward.

[Nick Smith (Blaenau Gwent) (Lab)]

This is the second time this month that this Minister has been dragged to the Dispatch Box to answer urgent questions about Southern Cross. The Government need to get a grip. May we have a ministerial taskforce from across Government to manage and monitor the transfer of homes to landlords? We need to ensure stability and give peace of mind to Southern Cross residents and their relatives.

[Paul Burstow]

I note that the hon. Gentleman seems to be a bit like a stuck record, repeating the point that he made last time. The reality is that the Government are taking the necessary steps, are exercising their responsibilities correctly and are making others responsible and accountable for discharging their legal responsibilities as well. What the hon. Gentleman left out from his question was any suggestion of what specific powers his Government put in place that would have allowed us to deal with this issue. There are no such powers.

[Glyn Davies (Montgomeryshire) (Con)]

Does the Minister feel that there would be value in considering the financial regulation of care homes and the care home sector so that this sort of situation does not occur again in future?

[Paul Burstow]

My hon. Friend is absolutely right. I hope that we can learn the necessary lessons about what regulation should exist at the national level and what powers are in place for regulators to intervene in these circumstances. The reality is that the regulatory powers that this Government inherited from the previous Government are next to non-existent. That is one reason why hon. Members have been able to drag Ministers to account, as has been said, before the House. What we have said as a result is that as we work to produce the White Paper, we will address these issues to make sure that we have a system in place.

[Mr Dennis Skinner (Bolsover) (Lab)]

Another day, another Tory disaster. We have frail, elderly men and women who do not even know what day it is, yet this Minister, because he is so obsessed with the private sector, fails to tell us that he is going to restore the cuts to local authorities that would enable them to handle the crisis.

[Paul Burstow]

I thank the hon. Gentleman for his comments. He should just reflect on the fact that this company and this business model were established during the 13 years when his party was in office, and on the fact that his party did not put in place the necessary regulatory measures that would have allowed anything other than the very measured approach that this Government are taking— working with the lenders and the landlords to ensure a consensual restructuring of this business. That is what the residents of these homes want, and this is what we are doing to make it happen.

[James Morris (Halesowen and Rowley Regis) (Con)]

I recently visited Roxburgh House in Cradley Heath in my constituency, where a number of vulnerable elderly residents are concerned about their future. Does the Minister agree that we need not only to address the continuity of care in those homes now, as he has described, but seriously to review the situation, once this crisis has been managed, to make sure that it does not happen again? Will he outline the steps he will take to ensure that that happens?

[Paul Burstow]

I am grateful to my hon. Friend. That is exactly what we also need to work on, which is why we are providing in the Health and Social Care Bill the necessary powers for regulations to be made that would allow such a regulatory approach to be developed. During consideration of those ideas in Committee, it was far from clear whether the Opposition believed that this was a worthwhile approach to adopt.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Before entering this House, I was a care standards inspector in Wales. Part of the problem is the fact that we are not willing to pay properly for the appropriate registration and inspection of care homes. One thing that worried me about the Minister’s statement was when he said that the registration of the new management bodies for these homes would be completed quickly. It should not be “quick” registration; it should be thorough and effective registration. May we have an assurance that the registration will indeed be thorough and effective? Secondly, may we have an assurance that the care standards inspectors will not be diverted from carrying on the ongoing inspection of other homes, and thus protecting other frail and vulnerable adults in care homes around the country?

[Paul Burstow]

I said in response to the original question that there would be no relaxation of the standards when it came to the registration of new homes, and that there would be no rush but a smooth transition to the running of the businesses by new operators. There was no suggestion that the process would take place in a rushed way. I urge the hon. Lady to read the record later.

As for the role of the CQC, we made it clear last year that we would allow it to recruit the necessary staff, and that there would be no limit to its ability to recruit staff whom it felt that it needed in order to do its job.

[Andrew George (St Ives) (LD)]

What other lessons have the Government learned from this case? The new regulatory measures in the Health and Social Care Bill are welcome, but if greater proportions of both health and social care are being exposed to this level of speculative capital, do the Government not need to reflect on whether further measures are required?

[Paul Burstow]

I am keen not to start leaping to lots of conclusions. About 77% of all social care provision in England is already in the private sector. This is not an experiment, but a fact of life that has evolved over the last 20 and 30 years and has been overseen by Administrations of all colours. What we do need to do is ensure that we have effective, proportionate regulation that safeguards the interests of residents who see these homes as their homes, along with robust arrangements on the ground to safeguard good quality.

[John Mann (Bassetlaw) (Lab)]

Can the Minister confirm that elderly people could now be forced out of the homes in which they have lived for years and be stuck in homes that are inferior, or are situated many miles from where they live?

[Paul Burstow]

I believe that the hon. Gentleman has been in the House for a considerable time. He will know that the secret that he appears to be sharing with the House, and with others who are following our proceedings, is not something totally new. He knows that care homes close already, and he knows that, as a consequence, people do face such terrible circumstances. That is why the Government, working with ADASS, have ensured that the necessary arrangements and good practice advice are in place, which is something that his party did not do.

[Alison McGovern (Wirral South) (Lab)]

Residents of Bebington and the rest of the Wirral are extremely concerned about the Southern Cross experience. Will the Minister say more about the specific lessons that we need to learn from it, given the Prime Minister’s announcement yesterday about the wider opening up of public service delivery?

[Paul Burstow]

As I said to my hon. Friend the Member for St Ives (Andrew George), 77% of adult social care is already in the private sector, and as we said in “A vision for adult social care”, we want a more vibrant, diverse market which includes voluntary sector providers. We want to examine the role of regulation, to ensure that it assists with the management of that market and, fundamentally, to ensure that it protects the rights and best interests of those who use these services.

[Mark Durkan (Foyle) (SDLP)]

Will the Minister assure me that consultation with the devolved authorities will take account of the different mix of landlords and lenders there? On a wider issue, will he assure the House that the undertakings he has given in respect of older residents will apply, at least equally, to much younger residents who are receiving bespoke care packages for conditions such as acquired brain injuries, often on a different contractual basis and outside the normal Southern Cross business model? Will such people be fully taken care of?

[Paul Burstow]

I am grateful to the hon. Gentleman for his question, which allows me to deal with an earlier question on the same subject. The answer is absolutely yes. The continuity of care will be not just for the benefit of older residents of care homes, but for the benefit of any individual who relies on the services provided by the company.

[John McDonnell (Hayes and Harlington) (Lab)]

I have been raising concerns about the management of Southern Cross in the House since 2007, in early-day motions and Adjournment debates. Despite assurances from the Care Quality Commission and from the company itself, the system resulted in neglect and abuse in my borough, which, at one point, suspended all placements in Southern Cross homes. I therefore view with some scepticism the assurances given today by the commission and participants in the company. Will the Minister be able to empower local authorities to take control of homes if they are threatened with closure and residents may be forcibly moved?

[Paul Burstow]

The hon. Gentleman has been raising those concerns in the way that he has, and I will certainly look at the points he has raised in the past. Local authorities have certain statutory powers in respect of their ability to respond to the closure of a care home by managing and resourcing that. We have been, and continue to be, in discussion with local authorities on that, so that they are able to respond in the event of a closure. I return to my key point, however, and the key reassurance we have not only from the company, but from the landlords: this is a solvent restructuring of the business, so that the care homes continue to operate and to provide homes for their residents.

[Barry Gardiner (Brent North) (Lab)]

It is not only the residents of the Birchwood Grange and Coplands homes in my constituency who are concerned about their future; so, too, are the people who work in those homes. Can the Minister guarantee that the new operators will honour the terms and conditions of those workers, so that they can see that their future is also secure?

[Paul Burstow]

There is an undertaking that the TUPE regulations would apply: there would be a transfer on the current conditions. That is what all the staff have been told, and I am certainly happy to repeat the undertakings that have been given by those responsible for those undertakings.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Shameful speculation brought Southern Cross to its knees, but local authorities will now have a key role to play in rescuing the homes of 31,000 people in a year when, according to Age UK, the social care budget is being cut by 8.4%. What discussions has the Minister had with the Department for Communities and Local Government, because it cannot be right to ask local authorities to accept public responsibility for a private failure and to deny them the necessary resources?

[Paul Burstow]

As I have made clear, given the current stage of the announcements on this solvent restructuring, we appear to be in a position where the scenario the hon. Gentleman asks about will not come to pass.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

There are more than 300 residents in seven Southern Cross care homes in Salford, and their quality of life is our primary consideration. What assurance can the Minister give to those residents and their families that future providers will not play for short-term profit, but will truly consider their quality of life? Reassurances will not mean much if a new provider gets into the same business model and same way of carrying on as Southern Cross.

[Paul Burstow]

The hon. Lady is right. As we move forward and achieve a successful conclusion to this process, we must put in place the necessary measures to ensure that this cannot happen again. We must take a critical look at the regulatory environment in which this particular business model was allowed to grow—a business model that thrived during a boom, but that was predicated on the assumption that there would never again be a bust. There was a bust however, and that is why the company is in this mess.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

The great majority of these homes were given landlords, but the one in my constituency was owned by Southern Cross and the title deeds have been passed to the bank. I have no confidence in the banks doing anything else but selling such deeds for the maximum profit. Does the Minister agree?

[Paul Burstow]

I would reassure the hon. Gentleman on that point by repeating that we are engaged with not only the landlords, but the lenders too, about all their responsibilities on the fundamental issue of the welfare of the residents of these care homes. We continue to make that point. That is the legal obligation that local authorities have to honour, and we are working with all those parties to make sure that that is what happens.

[Lindsay Roy (Glenrothes) (Lab)]

There are four Southern Cross care homes in my constituency. Does the Minister agree that in terms of care provision people should be treated first as people, not as sources of potential profit?

[Paul Burstow]

Yes.

[Grahame M. Morris (Easington) (Lab)]

There seems to be a measure of agreement among Members on both sides of the House about the need for proper regulation, oversight and management of these homes. Will the Minister therefore take the opportunity to dissociate himself from the remarks made and position adopted by the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) on 7 January 2004? He moved an Opposition motion deploring the then Labour Government’s

“over-prescriptive, expensive and bureaucratic regulation of the care home sector”—[Official Report, 7 January 2004; Vol. 416, c. 324.]

That statement is reminiscent of the neanderthal, neo-Conservative approach adopted by his right hon. Friend the Chancellor in his remarks on deregulating the banking sector.

[Paul Burstow]

I am going to stay focused on the welfare and interests of the residents of these homes, and we will have those political debates on another occasion.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Just a few weeks ago, I visited Bellevue Court, a home run by Southern Cross in my constituency, where I was told that the home would stay part of the restructured Southern Cross group and that there would be no redundancies. We now find that there is to be no restructured Southern Cross group, so does the Minister understand the scepticism that will be felt by families and staff involved in Southern Cross if the guarantees given a month ago did not last the month?

[Paul Burstow]

What we have is a process that is working towards that solvent restructuring of the business to ensure that each home is able to be taken over by an operator or a group of operators so that good-quality care can continue to be provided for the people who live there. That is what this process involving the landlords, the lenders and Southern Cross is all about. What we know from the statement made by the company yesterday is that it has given an undertaking for the TUPE transfer of the staff. We also know that the company will be working over the next four months to ensure that smooth transition. As my statement said, the public authorities—the Care Quality Commission and the local authorities—are working with the company to ensure that that happens.

[Mr Jim Cunningham (Coventry South) (Lab)]

The Minister knows as well as I do that local authorities may have a legal obligation to intervene in this situation but they cannot do that without Government assistance with the resources. It is no good the Minister blaming a previous Labour Government or local authorities; he is passing the buck to local authorities. I thought that Pontius Pilate died 2,000 years ago, but we have just seen his resurrection.

[Paul Burstow]

What I would say to the hon. Gentleman is that there is not a question of funding these homes, because they are not insolvent. The business is not going into administration—it is going through a restructuring—so there is no request for funds and there is no need for those funds in order for local authorities to be able to carry out their current legal duties.

[Ann Clwyd (Cynon Valley) (Lab)]

I do not know whether the Minister heard the excellent Radio 4 programme “You and Yours” earlier this week, which included a long discussion on care homes and care in the community. The programme gave the impression that more care home problems are in the pipeline and that we are dealing with Southern Cross today, but several others are in a similar situation. Can he give us any assurances on that point? Will he also examine care provision in the community, because many care companies also provide that service to local authorities and it would be an absolute catastrophe if the same thing were to happen to care in the community?

[Paul Burstow]

It is for those very reasons that this Government last year set out a vision of reform of social care based on greater personal control and personalisation of the services that people need to sustain them in the community. It is also why we have committed to produce a White Paper that will focus on issues of quality and regulation, and that will bring together the other issues associated with how we reform the laws in this country, which have evolved in a piecemeal fashion over the past 60 years and which make the system opaque and hard to navigate. Those are the commitments that we have entered into and will continue to prosecute.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

The Minister talks about every home being taken over, but it is obvious from his earlier remarks that he expects closures. That is a worry for me, given the two care homes in Tullibody and Crieff in my constituency. Just how many closures are acceptable to him?

[Paul Burstow]

Closures in their constituency are of concern to any hon. Member, and I suspect that that is why we have made it clear that we have been working with the Association of Directors of Adult Social Services. I am not going to come up with an arbitrary threshold below or above which something is good or bad; we need to focus on the needs of the individuals, which is why I have made it clear, in response to some of the hon. Gentleman’s colleagues, that we now have best practice advice on how such closures are to be managed. That did not exist, and was never drafted, under the previous Government.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The Minister said that he had been in discussions with the devolved Administrations, as I would expect him to be. What assurances can he give the House based on those discussions for residents in constituencies in Scotland, Wales and Northern Ireland about their future under the plans he has announced today?

[Paul Burstow]

The approach is one that I have rehearsed quite clearly today before the House. We as a Department continue to work closely with the devolved Administrations, sharing information about our contact at a national level with the landlords as a landlord committee as well as with individual landlords. If the hon. Gentleman has specific concerns about Scotland, he should contact the Scottish Government, too.

[Tony Lloyd (Manchester Central) (Lab)]

My local authority does not know who the successor landlords are in some of the cases in Manchester. The people I represent do not know who their landlords will be. This most complacent of Ministers ought to be able to come to the House and tell us the answer to this question: does he guarantee that every one of these offshore financial companies will agree to take over the running of these homes? That is what my constituents need to know.

[Paul Burstow]

What I have told the House is that the process in hand, following the statement made yesterday by Southern Cross, will ensure a smooth transition of every home to a new operator over the next four months.

[Bill Esterson (Sefton Central) (Lab)]

This will be of great concern to many people who live and work in homes that are not run by Southern Cross. Many other people will be affected. The Minister has spoken about regulation and care home standards. Will he bring forward proposals to consider the business regulation, and can he tell us when he will do that? That is the way to provide reassurance and security for many people who live and work in homes other than the 31,000 in Southern Cross.

[Paul Burstow]

My right hon. Friend the Secretary of State for Business, Innovation and Skills has already made statements and commitments about looking at the business model and at why it was thought to be appropriate for this sector.

[Roberta Blackman-Woods (City of Durham) (Lab)]

I met my local authority a few weeks ago to discuss the Southern Cross situation and it was obvious that it was not totally prepared for the complete withdrawal of Southern Cross from the social care market. Will the Minister tell the House whether he has issued or intends to issue guidance to local authorities on how to deal with this situation?

[Paul Burstow]

It is not a question of trying to write guidance in Whitehall. This is about our engagement with the Association of Directors of Adult Social Services about how directors discharge their statutory responsibilities. Writing guidance does not deal with the immediate changes. We need to ensure that local authorities’ existing legal obligations to ensure continuity of care are properly exercised.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Is it not obvious that if the Government are implementing swingeing cuts in the money they give to local authorities, they in turn will give less money to the care homes, and that this is only the beginning of a set of care home closures that could be catastrophic? Does the Minister seriously believe he can wash his hands of all responsibility?

[Paul Burstow]

In the spending review last year, the Government took our responsibilities very seriously. As a result, we identified and agreed that by 2014-15 an additional £2 billion would go into social care to support those budgets. We know from the work that has been done by others that with efficiency savings, such as those I was talking about earlier as regards reablement and telecare, that resources are sufficient to sustain the system while we do the necessary work to reform it.

[Andrew Gwynne (Denton and Reddish) (Lab)]

There are nine Southern Cross homes across Tameside and Stockport and still more in adjacent Manchester. Although some good work might be being done at an individual district level, I am not convinced that much contingency planning is being done across city regions such as Greater Manchester. What encouragement and, more importantly, financial assistance, can the Minister give local authorities to ensure that there is cross-city regional co-operation so that residents are certain of keeping their homes?

[Paul Burstow]

It really is not a question of financial assistance; it is about the co-ordination of the Association of Directors of Adult Social Services and the Department’s regional directors of social care, who are working with those colleagues at local authority level, and about making sure that they are co-ordinating their activity with the Care Quality Commission. All those things are happening, have been happening and will continue to happen to ensure that we do what the Government are committed to doing—ensuring continuity of care and that people can stay in the homes they are currently in with the knowledge that the Government really are committed to making sure that they have no doubt that they are not going to be thrown out on the streets as a consequence of this business’s restructuring.

[Mr Speaker]

I am grateful to the Minister of State and to colleagues.