Southern Cross Healthcare

Paul Burstow Excerpts

Thursday 16th June 2011 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

(Urgent Question): To ask the Secretary of State for Health what action the Government are taking in respect of the crisis in Southern Cross.

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

The Government have made it very clear that the welfare of residents living in Southern Cross homes is paramount. We appreciate that recent events and media speculation have caused concern to residents in Southern Cross care homes, to their relatives and families and to staff. I very much regret that.

I should like to reassure everyone that no one will find themselves homeless or without care. The Government will not stand by and let that happen. Department of Health officials have been in frequent contact with Southern Cross’s senior management over the past three months, and that will continue. We are engaged with the company, the landlords and the lenders, and we are monitoring the situation closely.

The Government are acting to ensure that all parties involved are working towards a swift resolution with a comprehensive plan for the future, which must have the welfare of residents at its heart. It is for Southern Cross, its landlords and those with an interest in the business to put in place a plan that stabilises the business and ensures operational continuity of the care homes. That work is happening, and we must let it continue.

Let me be clear: this is a commercial sector problem, and we look to the commercial sector to solve it. All the business interests involved fully understand their responsibilities, but the Government also have a role to play. That is why we are working closely with the Association of Directors of Adult Social Services, the Local Government Association, local authorities and the Care Quality Commission to ensure that robust local arrangements are in place to address the consequences in the event that the company’s restructuring plan failed to put in place a business that was on a stable footing.

Yesterday, a meeting took place between Southern Cross, lenders and landlords in a committee. They agreed to work together to deliver a consensual solution to the company’s current financial problems over the next four months. They also made it clear that continuity and quality of care for all 31,000 residents will be maintained and that every resident will be looked after. That is a welcome development and the Government are encouraged by that positive agreement by the main stakeholders.

The exact details of the restructuring plan over the next four months will be set out over the next few days and the following weeks. The joint statement issued yesterday by the company, the landlords and the lenders provides further reassurance that the continuity of care of the residents is at the centre of this consensual restructuring. The Government will continue to keep close contact with all involved in the process, and I will continue to keep the House informed.

[Nick Smith]

I thank the Minister for his statement. In recent months, we have seen a drip, drip, drip of negative news stories about the financial stability of Southern Cross. After yesterday’s meeting with the 80 different landlords, the company’s future is still very uncertain. However, residents of Southern Cross, their relatives and the directors of social services will need further information—sooner rather than later—on what comes next for the company.

Residents and their relatives need peace of mind, and they need it now. The company appears to be hanging by a thread; the numbers speak for themselves. It has reported half-yearly losses of £311 million and its share price has dropped by 97% since 2006. Forty thousand staff work for the organisation, but 3,000 redundancies have been announced. There are 31,000 residents in 750 care homes; this is a UK problem, with 400 constituencies affected in Wales, Scotland, Northern Ireland and England.

The Government have been too slow to get a grip on the situation. The issue has been live since last December, but Age Concern says that the Government have allowed it to reach this crisis point. Questions that need answering include the following. Newspaper reports say that Southern Cross owes Her Majesty’s Revenue and Customs £20 million. Will the Government allow the company to be dragged down by that £20 million debt? What banks are owed money by Southern Cross? How much is owed and what actions will the banks be taking? How are the Government working with the company’s landlords—particularly NHP Ltd, whose parent company is hidden in a fog of complex overseas equity holdings? What are the Government doing to ensure financial probity in this crucial sector? We need to stop the get-rich-quick merchants preying on our elderly relatives.

Who will lead on this issue at the very highest level? This is a cross-Government matter that needs health, business and regulatory intervention. We need reassurance that residents will be safe in their homes, that continuing care will be of the highest standard and that, in the coming months, the Government will focus on ensuring stable financial governance for companies that care for our old and our vulnerable.

[Paul Burstow]

The hon. Gentleman asks a number of questions, some of which are for Ministers and others of which are for the landlords. He asked about NHP Ltd, and he is right to identify the fact that it is the largest landlord. He also asked about bank lending; obviously, the lenders have a key part to play in a solvent restructuring of the business, and that is why they were at the meeting yesterday. He mentioned HMRC, which, as an autonomous Government body responsible for making these decisions, is considering those matters at the moment.

The hon. Gentleman asks about the financial problems and the seeds of the problems. I urge him, in looking at the history of this, to look back several years to the restructuring of the company and the business model that was established and that caused the problem, and to ask himself who were in government at that time.

[Mr Stephen Dorrell (Charnwood) (Con)]

Does my hon. Friend agree that the Government have just one priority in this set of circumstances, and that is to secure the interests of residents? Will he assure the House that he will send a clear message into the system that there will be zero tolerance of any slippage in the quality conditions that are imposed on the providers of care to residents, and that he will continue to keep his eyes firmly focused on the day-by-day quality of care that is delivered to residents?

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[Paul Burstow]

The right hon. Gentleman is absolutely right. The Government’s paramount interest—it is the interest that all of us in this House should have—is to ensure the welfare of residents. That has been the message that I, as a Minister, and officials have been giving, and will continue to give, to Southern Cross and to the landlords, and the CQC will have the responsibility of ensuring that that is carried out. It is absolutely clear that we all have to ensure that the restructuring succeeds, because that is in the best long-term interests of the residents.

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

I thank the Minister for his statement, limited though it is. I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on being granted this urgent question on an issue of great importance to Members of the House.

This is not the first time that Members have tried to bring the Minister with responsibility for care services before them to respond to their concerns. The lack of leadership and information from him during this period of uncertainty and anxiety for Southern Cross residents and their families, as well as its employees, has been notable. As a result of the agreement reached yesterday, we now appear to have a period of relative stability. However, great uncertainty remains for residents and employees at Southern Cross homes. We have heard that Southern Cross will now begin a period of restructuring, with reports of around 300 homes changing management, but contracts have been ripped up and it seems that 3,000 jobs are being lost. What assurances can the Minister give on security of employment for those working in Southern Cross?

On safety, last week we heard that Southern Cross is making 3,000 people redundant. We have also heard from the Care Quality Commission that Southern Cross has breached standards at 164 care homes—the equivalent of 28% of its English estate. Can the Minister guarantee the safety of and standard of care for residents, and how will he do this? Will the CQC carry out more frequent inspections?

There has been widespread condemnation of the business practices that led to Southern Cross’s financial problems. It is all very well for the Minister to point fingers at what might have happened many years ago, but this problem exists now, and the Minister is in government now. When people are treated as commodities with no thought to the consequences for them of this risky business model it is important that Government step up to the plate and do something about it. Southern Cross is not the only company in this industry to have financial difficulties. We have heard from the Business Secretary that the business model of Southern Cross and others in the residential care industry will be looked at by his Department. Will the Minister provide more details on the timing of this review and how Members will be told about its findings?

On cuts, the Minister says that there will be robust local arrangements, and I am sure that local authorities will step up to the plate if asked to do so. He must recognise, however, that local authorities are already under enormous strain as a result of the cuts imposed on them by his Government, including the cuts that they are already having to make to adult social care. How can they be expected to pick up the pieces of this national problem without assistance nationally from Government? In other words, are they to be given more resources to deal with the problem of Southern Cross if they are expected to be involved in plan B?

[Paul Burstow]

The hon. Lady is long on critique but very shallow when it comes to how she would approach this differently. Last week, I set out in a written ministerial statement the approach that the Government were taking. We also dealt with this extensively at last week’s Health questions.

The hon. Lady asked about the 3,000 job losses that are being proposed as part of redundancy measures by Southern Cross. Let us be clear: it has a statutory obligation to declare a ceiling for the number of job losses that may—I repeat, may—take place in the business. I have asked the CQC to undertake additional inspections to address concerns arising from the proposed job losses, and that has already been put in place.

The hon. Lady talks about cuts in social care spending but glosses over the fact that this Government, through the spending review, agreed to an unprecedented transfer of resources from the national health service to support social care, with £2 billion extra going into social care by 2014.

We might agree that we need to learn lessons from what is happening to Southern Cross, in respect of regulation and how we ensure a stable and successful social care sector for the future. That is why the Government are committed to an overhaul of social care and to bringing forward a White Paper to set out the plans in due course.

[Neil Carmichael (Stroud) (Con)]

Does the Minister agree that the fundamental problem was a flawed business model that was allowed to exist for far too long under the previous Government?

[Paul Burstow]

My hon. Friend is right to draw attention to that. It is oft commented in the financial pages of our media that that is one reason why this company is in this position and why such a restructuring is necessary. However, I take heart from the joint statement that was issued yesterday following the meeting between the landlords, the company and the lenders. It suggests that a clear route map is being worked out that will ensure continuity of care. That is what all Members of this House must want. We must all be interested, ultimately, in the welfare and interests of the residents in those homes.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

But is it not absolutely clear that the business model deployed at Southern Cross—selling off 750 freehold properties at colossal profit and then leasing them back, the state paying the fees to meet those rents, and the rental income being siphoned offshore by the landlords into tax havens, leaving the homes grossly underfunded for many years, with 164 homes failing basic CQC standards—is a national disgrace that must be replaced? Does that not mean that the Prime Minister’s commitment to sell off all public services to any willing provider must now be abandoned?

[Paul Burstow]

I think we need a reality check. About 78% of care in the social care sector in England is provided in the private sector. That transfer to the private sector has not happened just in the past 12 months; it is the product of successive Administrations’ policies over many years. We must draw lessons from the experiences of the last few months, but we must focus on the paramount interests of residents and ensuring that this restructuring is successful. That is what I am focused on.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I thank the Minister for the information he has given the House and congratulate the hon. Member for Blaenau Gwent (Nick Smith) on his urgent question. There are two such homes in my constituency. This matter is of great concern not just to residents, but to staff. The impact on staff morale has an impact, in turn, on the care given to residents. I urge my hon. Friend to facilitate a speedy resolution as best he can, and to look at the model that we expect local authorities to adopt for buying care. Residents, their families and their advocates should be consulted more and be more involved in the process, so that care is more tailored and there are not such enlarged packages that can be exploited by large organisations, which may not be run as openly and transparently as they should be.

[Paul Burstow]

I am grateful to my hon. Friend for that important question, which points to the need for greater personalisation in the delivery of social care in the longer run. At the moment, in concert with our local authority colleagues, we must be clear about what happens in the event of failure, but also focus on ensuring that this business successfully ensures its future, and that of its employees and the residents who live in its homes.

[Mr Dennis Skinner (Bolsover) (Lab)]

A lot of people know that running care homes has been a licence to print money. This is the second such case in a fortnight, the first being Winterbourne View. There are billionaires in the background making a ton of money. There is evidence that it is not just Southern Cross that is in this position. The goose might have stopped laying the golden eggs, so it is time to go back to what we had in the old days: local authorities being in charge and owning care homes. What is more, would it not be wonderful if everybody was able to go to care homes, like hospitals, free of charge?

[Paul Burstow]

It is important to put on record that something that the hon. Gentleman said is not, and never has been, the case. Social care in this country is not free. That is one of the big inequities of our current system and one of the big challenges that the Government are determined to address through the review that Andrew Dilnot is undertaking.

On the hon. Gentleman’s question about the good old days, I have to say that many people did not see those days as good, because the care was not personalised and individualised, and it was not always of good quality, either.

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

Will the Minister say something more about the specific steps he is taking to see that the Care Quality Commission ensures that standards of care are maintained during the transition period in homes in my constituency owned by Southern Cross? What steps will he take to ensure that the CQC takes its responsibilities seriously?

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[Paul Burstow]

That is rightly a key preoccupation of all Members who have constituents who are Southern Cross care home residents and their family members. We have been very clear in our discussions with the CQC that it has to maintain a clear focus on the behaviour and conduct of those homes during the transitional period, and particularly during the restructuring. As other hon. Members have rightly said, the CQC has already identified problems and is addressing them through its enforcement powers, and it will continue to do so.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

The Minister will know that many residents of Southern Cross homes, including in my constituency, have dementia, and that a lot of people with dementia cope very poorly with changes. What may happen is therefore of enormous concern to their relatives. May I therefore press the Minister—he must have had discussions with his officials—on what the Government’s legal position is, what the back-stop is if the worst case scenario develops, and what he will do now to reassure my constituents and many others that the Government really will ensure that their relatives do not face changes that will dramatically affect their quality of life?

[Paul Burstow]

rose—

[Mr Speaker]

Order. By my reckoning the hon. Lady posed three questions, but I know that there will be an immaculate and beautifully tailored single reply from the Minister.

[Paul Burstow]

Thank you very much, Mr Speaker.

I can assure the hon. Lady that, first and foremost, clear arrangements are in place to deal with a catastrophic failure, which I think is now increasingly unlikely. More importantly, we need to ensure that we learn lessons from past care home closures and take them into account in future. However, we can also be clear that the underlying viability of this business is very strong indeed. We need care homes, and that is why we now have a route towards a solvent restructuring of the business.

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

My concern is for the residents of the two care homes in my constituency, one in Goole and one in the Skippingdale area of Scunthorpe. It would be wrong if anyone tried to use the situation as a shield for making cheap political points.

Given that there are going to be up to 3,000 job losses, what measures will the Government take to monitor the quality of care and the staff ratio at individual homes, to ensure that there is no negative on impact on the residents? We are all concerned about that.

[Paul Burstow]

The hon. Gentleman asks an important question about the impact on the quality of care if there are staff losses. When it became clear that the company was posting a figure of 3,000 redundancies, I instructed the CQC to undertake additional assessments to ascertain any likely effect and ensure that there is no impact on the quality of care.

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

What is the Minister doing to beef up the CQC? As I understand it, there have been a number of redundancies there, and if he wants to maintain the quality of care he has to beef it up. Does he know that the Coventry Evening Telegraph recently conducted an investigation into 10 homes in Coventry, which were found greatly wanting in their standards, hygiene and medicine distribution?

[Paul Burstow]

On the hon. Gentleman’s question about the staffing of the CQC, I can confirm that last October I authorised an additional 75 inspectors’ posts to be filled by that organisation to strengthen it in the very way that he asks for.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Given that the change in business model seems to have led to the current difficulties, what procedures have the Government and the Department put in place to prevent similar business collapses? Is the Minister convinced that the CQC has sufficient investigative, as opposed to enforcement, powers should the problem sadly recur in future?

[Paul Burstow]

There are certainly issues arising from the current situation that we will want to consider as we go about reforming social care. However, I think it would be wrong, while we are in the midst of the restructuring that the company is undertaking, to bring forward a hard and fast set of solutions to ensure the long-term stability of the social care sector.

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

Tomorrow I will visit Bellevue Court in my constituency, one of the many Southern Cross-run homes around the country. I note what the Minister says about the Government guaranteeing that no one in the care of Southern Cross will be left without care as a result of what is happening. Clearly it is preferable for Southern Cross and its landlords and lenders to reach a solution that ensures that, but may I press him a little harder on what will happen if that does not come about? How will he live up to the guarantee, which the whole House has noted today, that if the rescue plan that Southern Cross is trying to achieve does not come about, the Government will ensure that no one is left without care and no one’s care is compromised either in Bellevue Court or in any of the 750 homes throughout the country?

[Paul Burstow]

I entirely understand why the right hon. Gentleman wants to press for further details about what would happen in the hypothetical circumstances that he is keen to explore. However, given the nature of the commercial discussions that are going on at the moment, to give credibility to hypothetical situations is to create the possibility of their becoming a reality. I do not want that to happen.

[Jake Berry (Rossendale and Darwen) (Con)]

The previous Government’s failure to regulate the banks led to a crisis in that sector. Is the national disgrace of Southern Cross, to which Members of all parties have referred, caused by a similar dereliction of duty through their failure to regulate the care sector?

[Paul Burstow]

I am entirely focused on ensuring, through the facilities and offices of the Government, that all the parties involved are clear about their responsibilities, which they are, and that they understand the reputational damage to them if they do not do what they must, which is to ensure a timely, thorough and effective restructuring of the business that secures the continuity of care for residents.

[John Mann (Bassetlaw) (Lab)]

In opposing the proposed sell-off of care homes by Nottinghamshire county council, I have been warning the council for 18 months about the crisis in Southern Cross, but that is not the only big care home provider with problems. As Mimosa, another major provider in my constituency, is also now in crisis and threatening to throw people out of Forest Hill care home, is the Minister prepared to meet families from my constituency so that he is ahead of the game on the next occasion rather than behind it?

[Paul Burstow]

rose—

[Mr Speaker]

Order. I will of course ask the Minister to provide a brief reply, as I know he will be happy to do, but we must focus on the very specific question of Southern Cross. This is not a general debate, whatever the temptations experienced by the hon. Gentleman.

[Paul Burstow]

In the spirit in which the question was asked, if the hon. Gentleman were to write to me I would be only too happy to consider his request.

[Andrew Stephenson (Pendle) (Con)]

The residents of Brierfield House care home in Brierfield and Hulton care home in Nelson will welcome the Minister’s reassurance that no one will end up homeless as a result of this fiasco. Will he say more about how we will learn the broad lessons of this situation and ensure that something like this can never happen again?

[Paul Burstow]

As I have indicated, in the work that we are currently doing preparatory to producing a White Paper later this year, we are engaged with many stakeholders in discussing quality and regulation. We want to ensure that we are clear about the right questions to ask in framing policy, and that we then get the right policy to deliver a more sustainable, high-quality social care system for the future.

[Kevin Brennan (Cardiff West) (Lab)]

The point that my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) made is the key one. The Minister has been very careful not to say what he should be saying, and I understand why—his officials will have told him not to. Will he pledge to the House that if there is a catastrophe of the kind we all want to avoid, every vulnerable person who should not be moved will be able to stay in their residential home? That is the pledge that we need to hear from him today. He needs to show some leadership as the Minister responsible.

[Paul Burstow]

The pledge that I can give to the House today is that all local authorities with Southern Cross care homes and responsibilities for residents whom they have placed there are clear about their statutory duties to guarantee and provide care, not just for state-funded residents, but for those who are self-funded. That is the clearest guarantee that I can offer—it is the essential guarantee of continuity of care.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents are unclear about what effective regulatory early warning system exists to detect financial weakness in care home providers. In the light of the Southern Cross experience, how can any such mechanism be improved?

[Paul Burstow]

A number of hon. Members have asked how we ensure that we improve the system. Indeed, one question that the Health and Social Care Bill rightly raises is the future role of Monitor in effective regulation of the social care sector. We are exploring that issue with colleagues in the Department for Business, Innovation and Skills, and we continue to discuss it with other stakeholders. That could well offer us a longer-term solution.

[Ann Clwyd (Cynon Valley) (Lab)]

As the Minister says, the care sector is increasingly reliant on private sector providers. The sector includes not only people who run care homes, but care agencies. I suspect that they will be one of our next problems.

As a significant proportion of care home and care agency income comes from public funds, I believe that the Government and local authorities have both the right and the responsibility to assess the financial stability of providers, which they entrust with the care of very vulnerable people. Why has that not been done?

[Paul Burstow]

I should take this opportunity, because it has not been asked of me, to say that I have this week spoken to Ministers in the devolved Administrations. My officials maintain contact and dialogue with them. There are real concerns in Wales, where 17,000 residents in 54 care homes are affected.

The right hon. Lady is right that we need to look at wider issues in the sector. Of course, under the current legislative arrangements, the CQC has a duty to examine financial viability. We will look at that issue further.

[Mr Peter Bone (Wellingborough) (Con)]

Following the remarks made by the right hon. Member for Oldham West and Royton (Mr Meacher), directors have very specific duties in the stewardship of a company. Has the Minister had any discussions with the Business, Innovation and Skills Secretary about referring this matter?

[Paul Burstow]

I have not had those discussions—the need has not arisen—but I can be clear that the company feels that the consequences of yesterday’s meetings are important in terms of its ability to carry out a restructuring that safeguards the interests of residents.

[Gloria De Piero (Ashfield) (Lab)]

My constituents ask me specifically whether their elderly and sometimes frail relatives face the prospect of moving. I realise that my hon. Friend the Member for Cardiff West (Kevin Brennan) raised that issue, but what reassurance are we to give to our constituents in that respect?

[Paul Burstow]

I have tried to give the House a number of reassurances on that point. I would add that there have been home closures over a number of years, from which we must learn lessons. One lesson is that we must minimise the possibility of closures and ensure that when they take place they are handled sensitively, slowly and carefully. That is why I welcome the work that the Association of Directors of Adult Social Services recently published—it sets out strong, clear, evidence-based guidance to assist local authorities in managing any closures in future.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I have one Southern Cross home on Kesteven way in Hull and I am concerned about what the Minister said and the complacent attitude that the Department of Health is showing on the role of local authorities. Is there a co-ordinated plan for the whole country, bringing together all the local authority plans, so that we know that there is coverage for the whole country if the worst happens? I am not sure that there is.

[Paul Burstow]

Such work is in hand and has been for some time.

[Emma Reynolds (Wolverhampton North East) (Lab)]

There is concern among Members on both sides of the House that 31,000 of the most vulnerable people in our country face having to move care home, with all the risks to their health that that involves. The Minister should not introduce a White Paper but sense the urgency of the matter. He should introduce regulations to ensure that the sector is more tightly regulated, and that such a situation does not happen again.

[Paul Burstow]

I understand the desire of all hon. Members for urgent action and a rapid resolution that secures the interests of residents, but I did not hear the hon. Lady suggest what those changes to regulation should be. When she cares to offer such suggestions, we can look at them.

[Ian Mearns (Gateshead) (Lab)]

I am grateful for the Minister’s reassurances, but I am afraid that they ring a little hollow, because I was aware of a great many shortcomings in the level and quality of care in Southern Cross homes in Gateshead before its financial crisis became a matter of public record. It seems that the CQC is looking at homes on an individual basis, and that it is not drawing a national pattern of the rotten care ethos within the whole of that organisation. When will the Minister address this as a national problem?

[Paul Burstow]

I am doing that, and shall certainly make it my business to look up past correspondence from the hon. Gentleman raising those concerns, so that we ensure that they are properly addressed.

[Several hon. Members]

rose—

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[Paul Burstow]

Two contributors to this debate have conflated two completely separate issues. Yes, the business is in serious financial stress—it is working its way through to being a viable business in future—but this is not about the abuse of older people in those homes. We should not conflate the two. It is unhelpful. We need to have a sensible debate and secure a sensible restructuring of the business.

[Mr Tom Watson (West Bromwich East) (Lab)]

I must tell the Minister that he is displaying a remarkable complacency in this crisis, which—like it or not—is his responsibility now. Hon. Members on both sides of the House will be holding surgeries this weekend and meeting the families and loved ones of the vulnerable people who live in those care homes. He has failed to give any guarantee about their future and he has not convinced the House of what lessons he has learned in the short term. This weekend, who can we phone—who will be in the Department?—if there is a problem?

[Paul Burstow]

I made it clear in my statement that the Department has taken steps, working with landlords, Southern Cross and others, to ensure that each party is clear about its responsibilities, and clear on what actions they would take in the event of business closure. However, I also want to be clear that as we move forward, we need to ensure that we learn lessons from this in the context of regulation, and to ask how this was allowed to occur in the first place. Now is not the time for those questions. My focus, as the Minister, is ensuring a successful restructuring of the business, and ensuring that the business remains focused on the welfare of residents.

[Lilian Greenwood (Nottingham South) (Lab)]

I am sorry to press the Minister again on this, but I think he recognises that changes to care, even when well planned, have a serious impact on the health of care home residents. Can he guarantee that if those commercial discussions fail, residents will continue to be cared for in their existing homes?

[Paul Burstow]

The Government have made it clear that in no circumstances will we allow the residents of any of those care homes to find themselves made homeless without good continuity of care. That is the pledge that we make.

[Joan Walley (Stoke-on-Trent North) (Lab)]

But is not the real question how the Minister will secure that guarantee? There is a real tension between care and commerce, and it seems to me that the restructuring could well affect certain areas disproportionately. We need briefings from the Care Quality Commission to ensure that Members in their constituencies can have feedback and reports on exactly how this matter is being dealt with.

[Paul Burstow]

I have already said that I take seriously the need to keep the House informed as we progress these matters. I am also clear that the paramount interest—the interest that the regulator has a statutory duty to enforce—is residents’ welfare. That is what we are doing, and what we will continue to do.

[Nic Dakin (Scunthorpe) (Lab)]

I welcome the Minister’s comment that every resident will be looked after. Will he further reassure residents of Baytree Court in my constituency that they will suffer no detriment as a result of this situation?

[Paul Burstow]

I can say that of course we need to make it absolutely clear to landlords and the company that their actions have consequences, and that their actions now must be focused on a speedy resolution to the restructuring of the business that ensures it can continue to employ good-quality staff and provide care for the 31,000 people who live in its homes.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I heard the Minister say that he had had discussions with the devolved Administrations. In his discussions with his Scottish counterparts, was he made aware of the very real concerns of the Convention of Scottish Local Authorities that should there be a catastrophic outcome, as he described it, they would not have the funding or resources to deal with the consequences? What is he going to offer to help in that respect?

[Paul Burstow]

That catastrophic outcome is by far the most unlikely of all the outcomes for Southern Cross. The most likely outcome is a successful restructuring with some of the business being moved to other operators that currently are the landlords of some of these homes. When I spoke to Nicola Sturgeon earlier this week, we discussed all the issues that concern her and me, and we agreed on the need to pursue the path of a consensual, solvent restructuring of the business as the best way of securing the welfare of the residents in those homes.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Eighty per cent. of Southern Cross’s income comes from the taxpayer, yet attempts seem to have been made to offshore as much of that money as possible. Age UK says that in the future all care home providers should have to demonstrate to the regulators that they have a solid business model. In his answer to my hon. Friend the Member for Wolverhampton North East (Emma Reynolds), the Minister seemed to imply that there had been no suggestions for how regulation could be strengthened. Will he seriously consider Age UK’s suggestion over the coming months?

[Paul Burstow]

I am grateful for that question because it allows me to make the point that Age UK was very welcoming of the Government’s proposition to look at Monitor’s role in the social care sector. We are in discussions with it and will continue to consider the idea.

[Mrs Mary Glindon (North Tyneside) (Lab)]

I understand that the Department of Health was invited to yesterday’s meeting with Southern Cross. With 31,000 vulnerable people facing the possibility of losing their homes, why did no one from the Government attend?

[Paul Burstow]

The character of the meeting has changed significantly over the past couple of days. The meeting is now focused on reaching a clear agreement between the lenders, the landlord and Southern Cross. We wanted to ensure that they were focused on that, which is why no representatives of the Department of Health were at the meeting.

[Jim McGovern (Dundee West) (Lab)]

All the contributions today have concentrated mainly on the rights and plight of residents, which is entirely understandable—I would not expect it to be any other way—but we should also think about the work force of Southern Cross. Just yesterday I was in touch with the local GMB organiser in Dundee, John Moist, who told me that at the homes in Dundee the work force are totally demoralised, which I think the Minister would agree is not the best atmosphere in which to provide care. Further to what was said earlier, will he consider setting up a helpline for MPs? Hon. Friends have talked about family members of residents coming to their surgeries this week; I have had employees at my surgeries, and it would help if I had someone to contact.

[Paul Burstow]

Just two days ago, I had a meeting with GMB officials to discuss their concerns about this and other issues in the social care sector. Of course we will consider the appropriate arrangements that might need to be put in place in the event of the scenarios that the hon. Gentleman talked about.