Southern Cross – an obituary

Posted on: 13 July 2011 by Alexander Hay

Caring for the elderly is a lot harder than you might think

As our society ages, what care can we expect?

So farewell then, Southern Cross...

Much like the News of the World, the Southern Cross brand is on its way out, with all 752 member landlords in this benighted chain of care homes deciding to withdraw from the group, its brand fatally tainted and its reputation smashed to pieces.

Unlike the News of the World, however, Southern Cross will not go out on a sentimental note. It was losing money, staff were increasingly under pressure and it had been financially ailing in the last few months of its existence. It was, simply, not designed to survive.

The fall of the chain exposes a fallacy that lies at the heart of all public-private crossovers. Providing a good service and making money at the same time are not always feasible. One must come at the cost of the other, or you end up with Southern Cross's slow, inexorable decline. It had no way of making the money it needed to continue as a private concern.

This is no defence of state provision, however. Rationed as it is, and scarce in the sense of being purely state run, its not-for-profit nature is no guarantor of quality. What Southern Cross' demise reveals instead is that the main issue of care for the elderly is one of funding; where the money comes from, and how it is to be adequately sustained so it provides the best care possible.

As Southern Cross proves, however, making money from such an enterprise is difficult, but more to the point, running one is, right now, even more so. The cost of care is prohibitive for both provider and customer.

Which brings us back, once more, to the Dilnot Report. Its calls for reforming how care is funded and by whom are a necessary first step, and it addresses the most important issue of them all – since care costs money, who pays, and how much?

And as Southern Cross has found out to its cost, we still don't have a good enough answer..

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Alexander Hay

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