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Written Statement - Southern Cross Further Update

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Gwenda Thomas, Deputy Minister for Children and  Social Services

My Written Statement of 1 July updated Members on the financial situation regarding the residential care provider, Southern Cross. I now wish to provide a further update.


Yesterday Southern Cross made an announcement to the Stock Exchange to provide an update on the restructuring of the company. The Financial Services Authority subsequently announced a temporary suspension of its shares. While the details of this restructuring are not yet settled, the company has confirmed that all its landlords had indicated their intention to leave Southern Cross and where they were not themselves already care home providers to find new operators for their homes. This move is being undertaken over the next four months in a managed, planned and consensual manner, with all payments to creditors being maintained and all care home staff transferring on their current terms of services. Southern Cross is not going into administration, nor is it closing any care homes during this transition period.    A smooth transition of homes to landlords and new operators is intended.


In discussions my officials have had with representatives of Southern Cross the company has reaffirmed its assurances that any change in its present arrangements will be achieved in a manner that ensures continuity and quality of care for its residents. Southern Cross is writing to all their staff and relevant local authorities with details of this announcement.


I appreciate this must be unsettling for residents, their families and for Southern Cross’ staff. The developments surrounding the restructuring of the company remain fluid while it and its business partners agree how best to proceed. I welcome the progress report announced by the company but this a matter for them, not the Welsh Government.


I would reiterate that my overriding concern is to ensure that the company, or any new provider, fulfils the assurances over the continued provision of and good quality of care for residents and employment of staff. We will continue to keep in close dialogue with the company about its restructuring plans and their impact in Wales.  We will also continue to engage with local government and the NHS over the contingency plans they have in place should the planned restructuring not succeed. The Care and Social Services Inspectorate Wales, in its regulatory role, will continue to assess whether Southern Cross is meeting its responsibilities in maintaining the standard of care in its homes and as part of its registration process under the Care Standards Act 2000, to assess the suitability of alternative care providers. The NHS and Community Care Act 1990 gives local authorities the powers to step in and provide care services to anyone in urgent need.