At-risk British care homes cut rent payments

1st June 2011, Comments 0 comments

Southern Cross, the troubled owner of 750 care homes in Britain, announced Wednesday it would pay a third less rent for the next four months as trade unions called on the government to step in.

The firm, responsible for looking after 31,000 elderly residents, is taking what effectively amounts to a loan from its landlords as it grapples with a £230 million (262 million euros, $378 million) annual rent bill.

The company recently warned it was in a "critical financial condition" as it unveiled a £311 million loss in the six months to March 31.

The GMB trade union, which has around 12,000 members working in Southern Cross homes, urged politicians to take action to help secure the future for the staff and the residents.

The union's general secretary Paul Kenny said: "These are not factories facing closure, they are a vital part of the social fabric of every community."

Southern Cross is facing rising rent bills, but has also felt the effect of public spending cuts as fewer councils place residents in the company's homes.

Local authority admissions declined by 15 percent in the first half of its financial year.

The company said it was confident that a "critical mass" of landlords will support restructuring plans which it will draw up over the summer, with an announcement expected in July.

Chairman Christopher Fisher said: "We believe that all of the key stakeholders in Southern Cross want this restructuring to succeed."

© 2011 AFP

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