A GAP in the current care system meant thousands of vulnerable residents were housed in Southern Cross homes without full financial checks being carried out, The Journal has learned.
The Care Quality Commission (CQC), the Government’s care watchdog, yesterday admitted no one holds responsibility for checking care providers’ overall financial stability, as the finances of the care home giant continued to crumble.
The flawed system allowed North East councils to house 1,750 vulnerable residents with Southern Cross, despite clear warning signs of its money troubles.
Local authorities in the region yesterday said they had relied on the approval of the CQC.
However, when asked who would step in to review the financial stability of a group as problem-plagued as Southern Cross, the care watchdog was forced to admit: “no one currently has that responsibility.”
The systemic hole came to light as Labour leader Ed Miliband said a Government bailout could be needed to protect the 30,000 elderly residents housed in Southern Cross homes across the country. Mr Miliband told the Government they should consider extending regulation of the sector to cover finances.
Blaydon MP Dave Anderson last night said the move of care home provision to the private sector over the last 25 years had blurred the lines of responsibility.
Mr Anderson, himself a former carer, said: “It doesn’t surprise me that we have reached this situation because over the past 25 years the provision of care has moved away from councils, where there was full accountability, to the private sector.
“The system was set up with equity deals in the same way as a company selling cars. But that doesn’t work with human beings. If a car garage goes bust, you don’t get your car, but if a care home goes bust some poor soul ends up dead.
“There is nothing stopping Southern Cross declaring itself bankrupt and then we’d have 31,000 people looking for somewhere to spend the night.”
The Darlington-based company, which has more than 100 homes in the North East, is struggling with a £230m annual rent bill and is looking for a £100m cash injection to keep it afloat.
