THE future of seven county care homes is under threat after a healthcare company announced it was in financial dire straits.

Southern Cross, the UK’s largest care home provider, has racked up pre-tax losses of more than £300 million and has admitted it cannot afford to pay the full rent on its 750 homes.

The firm provides residential nursing care for 31,000 elderly and disabled people and employs 44,000 people across the UK.

It runs Henwick Grange and Red Hill Court in Worcester, Ravenstone in Droitwich, Pitchill House in Salford Priors, near Evesham, Bowood Court and Bowood Mews in Redditch and Bryden House in Kidderminster.

There are fears that 200 homes could be closed in a bid to keep the business afloat.

Sue Pidduck, Worcestershire County Council’s safeguarding services manager, said the council was working with directors to ensure residents’ care continued.

She said: “The council and NHS Worcestershire are aware of the current situation regarding Southern Cross Healthcare.

“As Southern Cross is a large provider we do, of course, have contracts for people in their homes in the county.

“We are working with ADASS (Association of Directors of Adult Social Services), who are liaising closely with Southern Cross directors to ensure that continuity of care is maintained for residents who are funded in their care homes by our authorities and will work with these homes to arrange alternative provision if it becomes necessary.”

This week, Southern Cross announced talks with its landlords were ongoing in a bid to slash its multi-million pound rent bill.

The GMB trade union has called for state intervention. It said Southern Cross was paying £100 million a year over the odds for rent and criticised landlords for failing to act sooner.

Christopher Fisher, chairman of Southern Cross, said a combination of rising costs and falling revenues meant it was now in a “critical” financial position and could no longer meet its rent obligations in full.

“Reflecting this reality, it has taken a major book write-off of its goodwill and certain other assets through these interim accounts,” he said.

“Southern Cross stakeholders – landlords, lenders, shareholders, the various components of government, management and employees – all give overriding priority to maintaining the quality of care for Southern Cross’s 31,000 residents.

“Over the coming weeks the key stakeholders will need to agree on a comprehensive package to restructure financial affairs so that a new, stable and sustainable corporate and business model can be developed and introduced to underpin the continued successful operation of Southern Cross’s homes.

“In the view of the directors, there are reasonable grounds for believing that such an outcome can be secured and it is the responsibility of all stakeholders to work to that end.”