Southern Cross

Lord Beecham Excerpts

Thursday 16th June 2011 Lords Chamber

[Lord Beecham]

My Lords, I thank the noble Earl for repeating the Answer to the Question raised in the other place. While news of yesterday’s agreement is welcome and will, I hope, reassure Southern Cross’s residents and their families, a number of questions arise.

First, it is understand that Her Majesty’s Revenues and Customs is a major creditor. Has it been involved in the discussions and is it comfortable with the outcome to date? Secondly, will the Government ensure that both they and the Local Government Association—representing the interests of many of the residents, including but not limited to those who are publically funded—will be involved in any further discussions over the future of the company’s operations? Thirdly, what steps if any have the Government taken or will they take in relation to the company’s workforce, for whom this is also a most anxious time? According to today’s Times, 42,500 of them have already had their contracts ripped up and are facing the prospect of 3,000 jobs being lost.

As for the underlying, systemic issue, do not these events underline the folly of the previous Conservative Government in effectively driving local authorities out of the provision of residential care by deliberately financially disincentivising such provision in favour of the private sector? Can it be healthy for five or six private companies to dominate the market to the extent of around 36 per cent, with Southern Cross alone supplying 31,000 out of 170,000 places? Is it not totally unacceptable for frail and vulnerable elderly people to be treated like commodities, to be bought and sold as part of some ingenious financial engineering?

Did not Mr Hammarberg, the Council of Europe Commissioner for Human Rights, have a point, as reported in the Telegraph, when he singled out for criticism the UK model of privatised social hair combs—sorry, I meant to say care homes; I am not too familiar with combs these days. He went on to say that privatisation, “is not the solution”, with a high number of privatised care homes in crisis. Is he not right to express concerns that,

“the quality of services in these homes had ‘deteriorated to a worrying degree’”,

and that companies,

“running the care homes have reduced services in order to remain solvent”?

The Answer to the Question proclaims:

“this is a commercial sector problem and we look to the commercial sector to solve it”.

Is that not too narrow—one might almost say, too much like an accountant’s view of the problem? Would not the Minister agree that this is first and foremost a health and social care issue? Is not the commercial aspect very much part of the problem? Does not this in fact send out warning signals in relation to the role of the private sector in the provision of healthcare and whatever emerges as the reborn Health and Social Care Bill?

Finally, will the Government support and encourage co-operative, mutual and third sector organisations to engage in the future running of at least some of the Southern Cross care homes, if the rescue package does not succeed? In the longer term and in any event, will they promote a mixed economy of such care provision across the country to include local authorities and the private, voluntary and community sectors?