Hove care home operator goes bust

Posted On 11 Jul 2011 at 11:59 pm

The company that runs two care homes in Brighton and Hove effectively declared itself bust today (Monday 11 July).

Southern Cross made the announcement to the London Stock Exchange this morning and said that the landlords of its 752 homes would take over running them.

The company operates Bon Accord in New Church Road, Hove, and The Downs in Laburnum Avenue, Hangleton.

The landlord of Bon Accord is Gama Tzedaka Ltd, of Hendon, and Yew Tree Properties Ltd, of Golders Green in London, according to the GMB union, which represents several Southern Cross staff.

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It said that the directors of Gama Tzedaka were David Jay, Irvine Sidney Jay and Philip Jay.

Neither Southern Cross nor the GMB identified the landlord of The Downs.


While some Southern Cross homes are to close, Brighton and Hove City Council sought to offer reassurance about the two homes in Hove.

The council has asked the managers to put the minds of their staff at rest – and those of residents and their families, carers and friends.

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Councillor Rob Jarrett, chairman of the Joint Commissioning Board, which brings the council and health chiefs together, gave members an update at a meeting at Hove Town Hall late this afternoon.

He said that Southern Cross was shutting down its operations and transferring responsibility for its home to the company’s landlords.

He said that this did not mean that homes would necessarily close and added that some of those landlords owned and ran other care homes.

Denise D’Souza, the council’s director of adult social services, told members of the Joint Commissioning Board that the two Hove homes appeared to be financially viable.

She said that the council would work with the landlords or the administrators appointed to run Southern Cross until it was wound up.

She added: “We have reassured the residents. They have been reassured by the staff in those homes.

“We’re in a much safer position than some other local authorities.”

Local difficulties

A month ago the council was funding 27 residents at Bon Accord, 18 at The Downs and seven places at Southern Cross homes outside Brighton and Hove.

Apart from the financial troubles at Southern Cross, Bon Accord has had its own local difficulties too.

At its last inspection – in May last year – it was given a one-star adequate rating under the old star-rating system.

The best homes were awarded a three-star excellent rating or a two-star good rating. The worst were given a poor rating and no stars.

Bon Accord has 54 staff and caters for up to 41 people with dementia and other mental disorders with fees last year ranging from £624 to £850 a week

It was given a zero-star poor rating in 2009 although the report in May last year noted sustained improvements and signs of investment in the care home.

Residents said that the staff were “caring and supportive” and that “the home is usually clean and the food is good”.

It has a small number of vacancies – believed to be about seven – and if its performance improves and the landlords are co-operative, some believe that the council will take the places.

The Downs has 25 beds and, in 2009 when it was last inspected, it was awarded a two-star good rating under the Care Quality Commission’s old star-rating system.

Fees at the 12-year-old purpose-built home ranged from £430 to £842 a week.


After Southern Cross shares ceased trading on the Stock Exchange this morning, one of the country’s most senior social work chiefs issued a statement.

Peter Hay, president of the Association of Directors of Social Services (ADASS), said: “The assurances needed from landlords are vitally important to reassure all those people who live at Southern Cross homes, or who have loved ones and friends living there.

“We take the commitment as binding.

“We welcome the news from the landlords committee that all of Southern Cross’s landlords are wedded to working alongside ADASS members.

“Councils are fully committed to providing their help and expertise wherever it is required during the coming months.

“With local authorities, ADASS members will have prepared a range of regional contingency plans to provide help to landlords where necessary.


“We, alongside other colleagues, will be determined to establish that the new emerging organisations preparing to care for older people in their localities have robust business plans showing they can cope with the current public sector spending environment.

“We continue to believe that this is possible, as shown by others in the care home market, and will support landlords accordingly.”

The public sector spending environment – the pressure to keep the fees paid by councils as low as possible – was one of the factors blamed by Southern Cross for its financial problems. It also blamed rent levels.

The cost of caring for the elderly has long been contentious, not least because of the ageing population.

The economist Andrew Dilnot presented a report on the subject to the government just last week.

He proposed capping care costs at £35,000, with pensioners being taxed to help fund the extra £2 billion that the state would have to find.

His proposals are unlikely to become policy any time soon.

So anyone with savings and property worth more than £23,250 will continue to be liable for their care costs in full.

A Hove firm of solicitors is listed by the GMB union as the landlord of a Southern Cross care home in Birmingham.

The union said that Sandstone Holdings Limited, a company incorporated in Jersey in 1993, is represented by S M Reed and Co, of The Drive, Hove.

Stephen and Susan Reed are listed by the Good Lawyer Guide as partners in the practice.

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