GMB hits out over care firm crisis
The crisis facing the country's biggest care homes company was caused by "scandalous financial engineering", a leading union has claimed.
The GMB published a 61-page dossier on the troubles at Southern Cross, which is responsible for looking after 31,000 elderly residents and has announced that it will underpay its rent for the next four months as it struggles with a £230 million annual rental bill.
An emergency debate at the union's annual conference in Brighton ended with a call on the Government to appoint a cabinet minister to help secure the future of staff and residents at Southern Cross.
The union said it was time for a "fresh start" and a different social care model for looking after the elderly and vulnerable.
The dossier, The Cross We Have To Bear - The Greedy And The Gullible, said that major UK and US financial institutions were involved in buying into the sale and leaseback model for Southern Cross which had now "blown up".
The union claimed that rents for the 750 Southern Cross care homes were £100 million higher than they should be, which was at the heart of the current problems. The dossier complained of a "lack of transparency" over who owns the care homes and the financial returns to "ultimate owners" of the properties.
"It gives GMB no pleasure to say that the machinations and dealings of the private equity industry, the banks and the bond market which gave rise to the crisis in Southern Cross and the private care home industry took place while there was a Labour government in office that was either blind to what was going on or were actually encouraging it.
"The kings of private equity in secret, hidden from the press and the public, perpetrated ravages on the British economy and British jobs. Under current rules more is known about the mafia than about the antics of private equity," said the report.
"What is really galling is that many of those who organised the mess that is the care sector in private hands are still in senior jobs in the City employed as highly paid financial experts. We need to expose the reality that they are either greedy pigs or gullible fools."
Helen Ewan, who works at a Southern Cross home in Mansfield, told the conference that employees were having to work longer hours by being "blackmailed" by managers to cover for staff shortages.