Southern Cross Care Homes

Earl Attlee Excerpts

Tuesday 12th July 2011 Lords Chamber

[Earl Howe]

My Lords, I am grateful to the noble Baroness for her comments and questions. She asked a number of the latter. I hope I can answer most of them. It is important to appreciate that this is a managed process. The announcement that the Government made last month of a four-month restructuring window still applies, and we are at the first major stage of that process. Therefore, anxieties about the welfare of residents are misplaced because this is not a case of the collapse of Southern Cross. It is still very much a managed and solvent restructuring that is going on.

The noble Baroness asked me about the landlords. It is not for the Government to liaise with all the landlords directly but they are all represented on the restructuring committee, working to develop a plan for the future. Local authorities and the CQC will link as necessary with all the landlords as they take through their plans for the future management of homes. I am advised that the CQC understands that the Southern Cross landlords’ committee wants the handover of care home properties to take place at the end of September. The CQC is co-ordinating its activities to ensure that regulation does not prevent the handover across England. I hope that reassures the noble Baroness that nothing is going to happen tomorrow. It is very much part of a planned and structured process.

The noble Baroness asked about care homes that were in debt. Many companies, in all sectors, may have some degree of debt, quite obviously—this is a normal part of business, not necessarily a concern. We are clear that Southern Cross’s particular business model—not owning but leasing nearly all its properties—is a unique model and that is what has given rise to its particular problems.

The noble Baroness asked about the consequences of the landlords taking back their properties. The department is very clear that it expects all parties to maintain service continuity and quality of care while the restructuring process is ongoing. Our principal concern, as I have said, is for the safety and well-being of the residents. CQC will pay particular attention to any care homes where there is a concern that quality may be at risk or inadequate. It does have the resources to do this. It has indicated that there is not a problem in that sense. CQC has regular dialogue with Southern Cross at corporate level in addition to the attention it gives to individual services. We have emphasised to CQC the importance of ensuring that Southern Cross homes continue to comply with regulations and safety and quality requirements. Of course, we expect CQC to take the necessary action if it finds, for example, that staff reductions are affecting safety and quality of services.

The noble Baroness asked about government money for Southern Cross. Southern Cross is not asking for a bailout. It is looking to resolve its problems and it is for the company, its landlords and those with an interest in the business to put in place a plan that stabilises ownership and operation of the care homes. That process is happening and we must let it continue.

A number of providers that will acquire Southern Cross homes are already registered with the CQC as care providers in their own right, such as Four Seasons. There are established processes in place to allow these providers to extend their current registration to take on additional care homes. That process, assuming that it occurs, is relatively straightforward. Providers who are not known to or registered with the CQC will require a full application that will be subject to full scrutiny and a determination of fitness to provide the service. This cannot be a case of companies registered overseas suddenly becoming care home operators—that will not happen. Any new operator must demonstrate that they are fit and proper people to conduct this type of business and prove that to the CQC. Each landlord will be required to ensure that it has arrangements with a reputable and capable operator which can meet the CQC’s requirements. This is what the companies are now resolving as restructuring discussions continue.

It is also important to emphasise that while the CQC is committed to ensuring continuity of care, it will not lower the regulatory bar or reduce the rigour of registration. CQC’s principal concern is the safety of service users and it will not compromise on the standards that are required. At the same time, we expect that local authorities will ensure that any transfer or new arrangement to provide care for residents takes place smoothly and with continuity of care for service users assured. We are talking to the Association of Directors of Adult Social Services, the Local Government Association and, of course, the CQC, as I have mentioned, to ensure that robust local arrangements are in place.

Finally, the noble Baroness asked about the staff and their legal position. This is not a matter that the department can comment on directly, but staff are protected by the relevant employment law. I understand that Southern Cross has undertaken in a letter to care staff that they will be transferred under their existing terms to new operators under TUPE. That is our understanding of the position.

[Earl Attlee]

My Lords, perhaps I may remind the House of the benefits of short questions which will enable my noble friend the Minister to answer as many questions as possible.

--- Later in debate ---

[Lord Campbell-Savours]

My Lords—

[Earl Attlee]

My Lords, I am very sorry, but we are out of time.