Back in the late summer/early autumn of last year, Southern Cross began trying to get in touch with the new social care minister, Paul Burstow. Jamie Buchan, the chief executive, wrote a letter in August warning Burstow the company was in trouble.
The language was careful of course – this letter could have become public under Freedom of Information rules, so Buchan would not have wanted to say anything that spooked investors and made the situation worse. But the message was clear: the company is in trouble and we need to talk to you about it.
I want to outline the potential financial pressures which reductions in government spending place on the Southern Cross business model… My objective in meeting you will be to outline the measures we are taking to preserve the ongoing viability of our business…
During the period 2003-2008 the company expanded rapidfly via acquisition but, latterly, over-extended itself…
The next few years will be very difficult. The majority of our revenues come from the public sector and we will be increasingly impacted by the anticipated cuts in local authority budgets. In addition, despite the increasing standards of care delivered in our homes, we still suffer from unfavourable legacy sentiment.
I hope that it will be possible to discuss some of these points with you.
The reply came in the form of a phone call from Burstow’s office: the minister is not able to meet you because of “diary pressures”.
So in late September, Buchan tried again. This time, he wrote a more generalised letter, outlining the pressures the care home sector faced as a whole. But again, he requested a meeting:
I remain keen to meet with you to discuss these points in greater detail should you wish to do so.
This time Buchan received a written reply. In it, Burstow set out at some length what the government’s policies on care homes were, although not addressing the plight of Southern Cross directly. He finished by saying:
With regard to your request for a meeting, I am afraid that due to the pressures on my diary at the moment, I am unable to accept your invitation.
There then followed calls from Southern Cross into the department, asking to at least meet one of Burstow’s special advisers. Again, the meetnig never happened.
Perhaps Burstow felt this was a company looking for government hand-outs when the going got tough, perhaps he though that meeting them would bring a flurry of similar requests through his door.
But given this was the UK’s biggest care home provider, and ministers are now scrambling to make sure none of its 31,000 residents end up on the street afer it went bankrupt, it does seem odd that Burstow refused sevral times to meet its management. Incidentally, Burstow and Buchan have still never met.