The end of Southern Cross
Shares in the troubled Southern Cross Group have been suspended with the news that the landlords are to take control over their 752 care homes.
The news follows months of uncertainty and will leave the 31,000 residents in these homes, and their families, wondering what the provision of services might look like in the future.
Last month we saw Southern Cross trying to renegotiate rents with its landlords, with the expectation that many would leave the group.
What has now transpired is that every landlord has determined to leave Southern Cross, as the Group was unable to pay its rent bills.
This announcement will result in even greater uncertainty for residents, staff and shareholders.
Shareholders in the Southern Cross Group had already seen the value of their shares fall from £6 in 2007 to 6.25p before trading in these shares was suspended. It seems unlikely that they will now receive any value from these shareholdings.
It is still to be seen what role, if any, the government will now play in ensuring continuity of care for residents in the various homes across the UK.
This high-profile failure is certain to raise important questions about the role of the private sector in the provision of care home services, at a time when adult social care is receiving a lot of attention in the press due to the recent Dilnot report.
Photo credit: Flickr/betsyweber