MP demands probe into homes crisis

AN Oldham MP today called on the Government to launch an inquiry into whether private equity firms should be banned from providing health and social services following recent events with Southern Cross.

Oldham West and Royton MP Michael Meacher said the Government must ensure the protection of all residents if the company collapses, along with setting up a public inquiry into the impact of private equity financial engineering in social care, including a potential ban.

Southern Cross Healthcare — which owns Treelands in Fitton Hill and Avalon Park, Salem — is planning to cut 3,000 jobs from its 750 care homes across the country. Staff at two cash-stricken care homes in Oldham are facing an anxious wait over job cuts.

Mr Meacher made the call in a Commons petition he submitted this morning.

He added: “I am also intending to ask the Speaker to accept an Urgent Question on this matter within the next few days.

“I regard what has been revealed as an enormous scandal and one that needs to be pursued through every channel possible.”

The firm is in a “critical financial condition” after unveiling losses of £311 million in the space of six months.

Its share price has tumbled as it struggles with rising rent bills and declining local authority fees.

It is underpaying its rent by nearly a third until the end of September as it restructures its finances.

It is believed that more than 300 nurses and 1,275 care staff are among those set to lose their jobs, while almost 700 catering posts, 440 domestic jobs and 238 maintenance posts will also be axed.

Troubled care home provider Southern Cross was owned by private equity firm Blackstone from 2004 to 2007. Blackstone has been criticised for its actions while it owned the company, but Blackstone denies it is responsible for Southern Cross’s financial woes.