CMM June 2011 - The demise of Southern Cross

June 1, 2011

Comments on Southern Cross featured in the June 2011 issue of CMM

"The Southern Cross (SX) debacle has been sad, very distressing and a tragic example of just how bad something can go wrong when a Company falls into the hands of incompetent Managers. Too many residents have been very badly let down and often staff have been placed in such invidious positions that on occasion they even found themselves faced with a decision over whether they should keep open a home.

I don’t understand why the Company could not fill 200 Home Manager positions in the last year. I can’t understand either how a company can possibly reach a state of affairs where there was not in reality proper communication between the guys at the top and the staff on the ground. To be almost in denial as well over criticism by the Regulator and other independent commentators that too often quality of care had been compromised clearly only hastened the Company’s ultimate demise.

These failed Managers have not only let down themselves but unfortunately they also dragged down with them the sector. I don’t think we have quite reached the stage yet when serious people are thinking of re-nationalisation but care home owners, large and small are going to have to work hard to recover the trust of the public and the media. In the meantime the awful scenes in the Panorama programme further undermine confidence and don’t think the Government will be too slow to grasp the disconnect between high fees and low paid staff in the more specialist homes.

Early June 2011 SX shareholders were no longer willing to support the business.There was no real chance either that Management could put on the table a credible business recovery plan . In such situations the onus then passes to the creditors. An orderly winding down of the business will now take place. New operators will take over the management of the homes. Hopefully then, in a relatively short time, at least some stability will be re-established in the homes."