Southern Cross 3,000 Redundancies Withdrawn

14 Jul 2011

Notice of 3,000 redundancies at Southern Cross withdrawn as GMB learn of the next steps in the transfer of 750 homes to landlords.

Southern Cross confirmed to GMB yesterday that the notification of 3,000 proposed redundancies and cuts in hours, pay and conditions for the 42,000 Southern Cross staff at 750 care homes has been withdrawn. Southern Cross also confirmed that all the landlords have made clear, through the landlords committee, that they no longer wish Southern Cross to operate the homes.  GMB are now clear that this was landlord instigated.

An 8 point road map that may be followed as the next steps is as follows:

1) A written agreement, known as a Business Purchase Agreement (BPA), is being prepared to facilitate the “sale” of each Home’s operation to the respective landlords and facilitate a smooth and orderly transition. Each landlord will be asked to sign it. The sole signatories will be Southern Cross and the landlords. Government, The Association of Directors of Social Services, Local Government Association, Care Quality Commission, residents and their families, and the workforce and their union GMB are apparently not involved in this aspect.

2) The 752 Homes fall into 3 broad categories:

(i) Those owned by or linked to Care Home Operators e.g. Bond Care, Four Seasons. About 250 homes in total;

(ii) The Homes gathered around NHP who have been speaking to Court Cavendish run by Chai Patel. These number about 300 in total;

(iii) The balance of about 200 who are talking to a range of operators and are yet to decide who will run the homes for the them. There are 14 Homes still belonging to Southern Cross. As they represent security on outstanding loans who operates them will be decided by the banks who effectively control them.

The full list of all the homes and the landlords where known by region is set out at the foot of this release as pdfs at This information was established by GMB working with the Land Registries across the UK.

3) The first 250 Homes could conclude their transfer by 30/9/11. The timetable for the remainder is by 31/10/11. When the process of transfer is complete, “Southern Cross will be wound down”.

4) It in not known yet which homes will go to which operators. All landlords are expected to make their decision on their future operator by 1st August 2011.

5) Southern Cross consider that the trigger for TUPE consultations will be as soon as each landlord signs the BPA. Southern Cross consider that TUPE will apply and will consult with GMB.

6) The Care Quality Commission CQC will need help to register the 750 Homes post transfer. Local Authorities will be responsible for the registration.

7) GMB have confirmation that the proposals made in June for 3, 000 redundancies and contract changes, along with the proposed changes to terms and conditions are withdrawn. The company have stated: “We will not detrimentally changes people’s terms and conditions between now and transfer.”

8) The position around CRB checks, overseas workers and those on student visas has been discussed. The company will step up discussions with the Home Office, CQC on these matters.

Justin Bowden GMB National Officer said “GMB now know that it was the landlords who pulled the plug on Southern Cross. NHP, in which the QIA has an ownership interest with Capita representing its creditors, seems to have played a key role as the major landlord. GMB and Southern Cross management have now to pick up the pieces and will work closely with the wellbeing of residents and the staff the paramount concern.

The current plan that only two parties, the landlords and the outgoing management as signatories to the proposed Business Purchase Agreement, will have a say in what should happen next at each home is completely unacceptable. Residents and their families and local councils and the NHS who pay the bills, the workforce who manage and run the homes and their union GMB, Governments from across the UK and the Care Quality Commission have to be part of the decision making process.

What happens next at Southern Cross must be subject to full public scrutiny and debate in council chambers and elected Parliaments and Assemblies across the UK.

The nearly £1billion funds dedicated to care for the elderly must be spent for this purpose only. Some homes need upgrading and investment to bring them up to decent standards. The high levels of labour turnover need to be brought down to improve care. More money needs to be spent to give the carers time to care properly and enough resources need to be made available to pay for biscuits with teas etc.

Notice must now be given by councillors and MP that the landlords will not be allowed to re-introduce a new version of the opco/propco model with new “middlemen” like Court Cavendish funnelling money meant to care for the elderly as rent to tax havens.

Politicians who failed to heed warnings from GMB that the rents were far too high and way above market clearing rates this time must take action on this. Proper care for the 31,000 elderly and vulnerable residents in the 750 care homes is still in the balance.”