What lessons can be learned from the collapse of Southern Cross?

Janet Downs's picture
Commenting on the difficulties facing Southern Cross Healthcare, the struggling operator of 750 care homes, Dame Joan Bakewell  warned that this is what can happen when essential services are offered to any willing provider. And today The Observer reported that 28% of Southern Cross Healthcare homes have been condemned by the watchdog while staff complain of poor working conditions and being unable to provide sufficient care.

On 8 February, 2011, the Financial Times* reported that Jamie Buchan, the Chief Executive of Southern Cross Healthcare, “sees further opportunities for growth here [in NHS-referred admissions], and said the government has been receptive to the idea of outsourcing some traditional NHS responsibilities to the likes of Southern Cross”. The FT quoted Mr Buchan: “It gets people into homes closer to their families – it’s very much in line with the Big Society ethos.”

Southern Cross Healthcare, Winterbourne View Hospital , is this what competition within the “Big Society ethos” means - making a profit at the expense of our most vulnerable?

Businesses, including private equity firms like Southern Cross Healthcare, have realised there is money to be made from the provision of public services, including education. Capita , for example, says that the “total UK potential [business process outsourcing] market” is estimated at “£117bn per annum, with only 7% outsourced so far.” But Southern Cross Healthcare should act as a warning about the possible consequences of this policy.

And don’t forget that Capita , using competition legislation as an excuse, has already been accused of taking an excessive amount of taxpayers’ money from newly-converted academies for licences for their schools information management systems (Sims).
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