Social care industry on the 'brink of collapse'

A union warns that care homes are facing a crisis

The UK's care industry is on the "brink of collapse", according to a report by the public-sector union Unison.

There have been growing concerns about the UK's biggest care-home provider, Southern Cross.

Unison said other companies in the sector also had financial difficulties, and that if they went under, taxpayers would have to pick up the bill.

The Department of Health denied that financial issues had undermined the care system.

Southern Cross, which has 31,000 residents, has said it will have to reduce the amount of rent it pays to its landlords for the next four months.

The Unison report said the next biggest provider, Four Seasons, was also in trouble and the two providers were "clinging on by their fingernails".

But Four Seasons chief executive Dr Pete Calveley said the company was in "a robust financial position and is certainly not in any difficulties".

The union said the care industry could be highly profitable for private-equity investors and was worth about £4bn a year - but the investment was "high risk", with many owners trying to "re-sell at the highest price in the shortest time".

"Just as some banks were too big to fail so some public service contracts are too big, or too important, to fail," it added.

Unison general secretary Dave Prentis said: "We have already seen the huge impact of the Southern Cross collapse, but the care crisis is far from over.

"Private equity and other private sector operators are hovering over the NHS, eager to make a quick profit - at the long term cost of care quality and continuity of service.

"Taxpayers will have to pay the price again, as they will be forced to pick up the bill for collapsing companies. We need to halt the privatisation of any more public services, before more people are made to suffer in the name of profits."

A Department of Health spokesman said: "For many years, the social care sector has involved very large numbers of independent providers of different types and sizes. This has led to a diverse and open market of provision, offering people choice in the care available.

"Financial issues for one provider, even a major one, don't undermine the entire principle of independent care provision."

The spokesman added the government was reforming social care and there were many lessons to learn from recent weeks.