Southern Cross

Lord Brooke of Alverthorpe Excerpts

Thursday 16th June 2011 Lords Chamber

[Earl Howe]

My Lords, I fear that I am unable to answer the noble Lord’s questions, for which I apologise, but I understand why he has asked them. If I have some concise answers that I can send him, I will certainly do so by way of a letter.

I think that the noble Lord and I agree that we are looking at a fundamentally unsound business model. As I understand it, it is a unique business model in the care home sector, where a deliberate decision was taken for the company not to own its own care homes but rather to pay the rent on them. The market clearly moved against it in more than one sense. The company’s problems are partly attributable to the occupancy levels of some of their care homes. Southern Cross occupancy levels have gone down, I understand, more than those of other care homes. It is not about fee levels; other providers of residential care are not in the same position as Southern Cross. I believe that Southern Cross’s problems relate to the rental agreements—the leases—that they entered into. It is those things that the restructuring aims to fix.

[Lord Brooke of Alverthorpe]

My Lords, I thank the noble Earl for his Statement. I listened carefully to what he said about the need for clarity on where responsibility lay. He also stated that there were lessons to be learnt. Will he say when the Government will conclude their review of these lessons, and when and how they will make them public? With the imminent privatisation of the Royal Mail, which has a lot of property worth quite a lot of money, will the Minister say whether some lessons learnt in this exercise might be useful in the context of ensuring that we do not run into similar problems there?

[Earl Howe]

My Lords, I would love to be able to comment on the Royal Mail, but noble Lords will be sorry to hear that I have not received the necessary briefing. On the timescale of our review, as I indicated to my noble friend Lady Barker, there are a number of elements to our review of social care policy. One is the Dilnot report, which we are expecting at the beginning of July. Another is the Law Commission report. However, a third is undoubtedly the lessons learnt from this episode. It is fair to say that it would be rash of me to give the noble Lord a date on which we will conclude all three strands of that review. It is likely that we will be able to be more definite later on this summer.