Unions warns of financial threat to Coventry and Warwickshire care homes

PENSIONERS at nine Coventry and Warwickshire care homes face being made homeless if the firm that runs them cannot solve its financial problems, a leading union has warned.

Southern Cross is the biggest care home operator in the UK and runs a string of sites across Coventry, Kenilworth, Rugby and Nuneaton.

Yesterday the cash-strapped firm revealed it had walked away from talks about a potential takeover and would now ask for help from its landlords and the government.

The news sent shares in Southern Cross plummeting by 50 per cent.

And the union GMB fears 31,000 elderly residents at the firm’s 750 care homes across the country will be the ones who suffer most if no solution can be found.

GMB general secretary Paul Kenny said: “These homes are not factories that are failing from lack of demand but are an essential part of every community which now face ruin.”

Mr Kenny warned residents may already be paying the price, as staff wages had been frozen and that led to a high turnover of low-paid workers, which could impact on the care that the pensioners received.

“They now face the prospect of losing their home,” he said.

Southern Cross said trading had continued to deteriorate this year as it found itself trapped between its landlords and local government.

On one hand the firm is paying high rents on the homes it runs.

Meanwhile, it is also confronted with local authorities, such as councils, who are paying less for care home spaces after the government ordered them to slash their budgets.

Now the firm has warned it is even facing the immediate risk of breaching the agreements it made with their lenders. But bosses said they still had their support.

Southern Cross said it had drafted in advisors from financial powerhouse KPMG to help it negotiate with its landlords and lenders.

The Darlington-based group said: “In the light of reduced local authority placements, the company considers its current rent burden to be unsustainable and intends to step up discussions with landlords based on a more radical agenda.”

Union bosses at GMB have also called on the Qatari Investment Authority, which bought Southern Cross in 2006 and also owns Harrods, to help solve the situation.

Southern Cross runs nine homes across Coventry and Warwickshire.

They are: Brandon House, Bell Green; Keresley Wood Care Home, Keresley; Coventry Victoria Gardens, Tile Hill; Victoria Manor, Whitley; Victoria Mews Care Home, Binley; Victoria Park, Stoke; Harmony House, Nuneaton; Kenilworth Grange Care Home, Kenilworth; Rugby Care Home, Rugby.