For-profit LTC corporation on brink of collapse. So, P3s transfer risk, eh?

Britain's biggest for-profit long term care (LTC) operator, with 752 homes and 31,000 residents, is teetering on the brink of financial collapse as it struggles to pay an annual rent bill of £230m, the Guardian reports.

Southern Cross lost more than £300m in the six months to the end of last March.

 Over the coming months, many of Southern Cross's homes will be taken over by other operators, as landlords seek tenants who are on a sounder financial footing.

Around 3,000 Southern Cross employees are losing their jobs as part of a cost-cutting exercise by the firm, a move the GMB union says will affect the quality of care for residents. Southern Cross staff are also being asked to agree to harsh new working conditions which one care worker described as "the modern-day equivalent of slavery". Many of Southern Cross staff are already paid little more than the minimum wage of £5.90 an hour (about $9.43)

Age UK said it was alarmed the Southern Cross "situation" had reached crisis point "as families and residents of their homes will be greatly concerned.

Today, the beleaguered company saw its stock shares sink almost 10%. Reports in the weekend newspapers claimed that five Southern Cross homes had been reclaimed by one of its 80 landlords .A spokesman for Southern Cross told Interactive Investor they could not confirm or deny the report.

No doubt, defenders of "public private partnerships" (P3s) will continue to insist that P3s transfer tremendous risk from the public sector to the for-profit sector -- and continue to insist that the public pay handsomely for it.

A cartoon from the Guardian:

southern cross kipper williams

Southern Cross gets tough

Care firm's staff face harsh new working conditions

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