Care homes' unsustainable rents

CARE home firm Southern Cross – who have three homes in Warrington – are in talks with its main landlords over “unsustainable rent levels.”
A series of proposals for the financial restructuring of the business have been put to landlords representing 92 per cent of Southern Cross homes and these are now being carefully considered.
The company says no decisions have yet been made, but there is general recognition of the value to all parties moving forward to a solution in an orderly manner.
GMB – the union representing care staff – says the landlords have to cut rents if the company is to “brought back from the brink” and the threat to residents and staff lifted.
Southern Cross has 21 care homes in Cheshire, including three in Warrington, at Callands, Winwick and Latchford.
Last month Southern Cross said its current rent burden was unsustainable.
Overcharging on rent amounts to £60 per week per care home bed and totals £100 million a year.
Last year, the company paid £248.3m in rent across the UK. GMB estimated that the company paid an average rent per bed to landlords of £6,444 last year.
GMB says it has 10,000 members employed by Southern Cross – the majority paid the national minimum wage and the majority with their pay frozen.
Union organiser Karen Atkinson said: “We welcome this meeting between Southern Cross and 20 of its landlords as a necessary step towards reducing the unsustainable rent burden.
“These landlords are overcharging for rents on the buildings to the tune of £60 per week per bed. GMB considers that all Southern Cross landlords have to cut the rents if the company is to be brought back from the brink and the threat to residents and staff lifted.”
GMB has also written to the Prime Minister asking what pressure the government is putting on the landlords to cut rents to market levels.