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Southern Cross Healthcare and Social Care Market

Volume 533: debated on Monday 10 October 2011

I wish to update the House on Southern Cross and the Government’s wider response to the issues which this case has raised.

On 30 September, Southern Cross announced that 250 of the care homes in which it operates have been transferred to new care operators. This represents one third of all of Southern Cross’s homes, involving 249 homes in England and one in Scotland. In each case, the transfer was scrutinised and approved by the relevant national regulator. For the time being, Southern Cross will continue to provide care services in the remainder of its homes.

Two further transfers of homes are expected in October and when the transfers are concluded Southern Cross will no longer be a provider of care services.

The Association of Directors of Adult Social Services is maintaining a list of Southern Cross’s care homes with information on plans for transfer to alternative providers, as well as contact information for residents, relatives and any other interested parties. This is updated weekly and is available at:

This first set of transfers is an important step towards the consensual and orderly winding down of the company. Throughout, it has been the Government’s overriding concern to secure the welfare and safety of the residents in Southern Cross’s care. This transfer and the ones to follow should ensure that this is achieved, with minimal impact on the residents of these homes and clear arrangements to ensure continuity of care.

We will continue to monitor closely the remaining steps to the full transfer of all homes, and will work closely with all interested parties, but I am encouraged that those involved in the restructuring negotiations have put in place the necessary agreements to secure a successful outcome.

As noted by the National Audit Office in its recent report on the social care market “Oversight of user choice and provider competition in care markets”, the case of Southern Cross has highlighted the risks associated with a large care provider facing financial difficulty.

In my previous written ministerial statement to Parliament, I said the Government would shortly be publishing a discussion paper on the issue. This paper has been published today, and forms a part of the Government’s wider engagement exercise on care and support reform, as reported to the House on 15 September 2011.

The paper considers the issues raised by the risk of financial failure in large providers and seeks views on service continuity and/or whether new measures are necessary. It sets out what the Government think is the key objective of any reform, and outlines the key considerations which need to be balanced when coming to a view on what measures may be appropriate. It then lists a range of possible options that could be pursued, drawing on experience in other sectors and considering both regulatory and non-regulatory approaches. This includes possible roles for Monitor, as allowed for in the Health and Social Care Bill currently before the House. The paper invites comments on these options, but also welcomes other ideas. At this stage the Government have not formed a firm view on what would be the best approach. They want to take this opportunity to hear different views, before settling their position ahead of next year’s White Paper.

“Oversight of the Social Care Market; Discussion Paper” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper office.