First Person Article

FIRST PERSON ARTICLE

Veteran Scottish care home operator Robert Kilgour on the missed opportunity following the demise of Southern Cross Healthcare

At some point in the futurewe may collectively look back upon the collapse of the care home operator Southern Cross Healthcare as a missed opportunity.

With the break-up of Southern Cross I believe we had the chance to create a potentially significant new business model to operate 752 care homes for the elderly across the UK.

My suggested solution is one based on the John Lewis Partnership model of ownership, management and operation and adopts the same core principles and strategy that have been so successful for them for manydecades.

The situation with Southern Cross has dragged on for too long and the various parties are now arguing with each other over what they can take away; senior managers want to safeguard their redundancy packages, funders want their money back and landlords also want to protect their interests.

The people who are losing out the most aremore than 30,000elderly and vulnerable residents and their families as well as over 40,000 staff.

As someone who is currently negotiating to take on the operation of several former Southern Cross care homes in Scotland, I amacutely aware of the important of the continuity of care for some of the most vulnerable people in our society.

It was during the current due diligence process that I visited a number of Southern Cross care homes and I came to realise two things; one, that the best and most valuable resource which Southern Cross has is its staff and two, that there is a huge task ahead to stop and reverse the downward spiral that many of their former homes have been - and still are - experiencing.

That was when the idea of introducing a new ownership model first occurred to me.

Anyone who has ever shopped at John Lewis will have noticed the excellent level of staff service that this model produces and encourages.

If staff, landlords and funders at these care homes each owned an equal share of the business and were represented on the board as they are at John Lewis, they would decide how much money to reinvest or pay out in bonuses.

Imagine the effect of involving and empowering every member of staff, from the cleaners to the chief executive; creating an immediate and sustainable upward spiral that would have a positive impact on thousands of vulnerable elderly residents and their families.

All decisions under this new structure would be made in the best interest of customers and staff, as well as the funders.

Not only would residents, their families and employees see the benefits of a positive change in culture but I am convinced it makessound business sense.

Despite the gloomy economic conditions in July this year John Lewis reported a 20% growth on summer sales compared with the same period last year and they boast a staff turnover rate of only 17%compared tothe national retail average of 40%.

Consumersbuy into good business models, whether they are shopping for clothing and household goods or care for an elderly relative.

In fact, I believe it is more likely to work in the care sector than almost anywhere else as there are few decisions we take as individuals that are more important than finding someone to look after those we love.

Excellent customer service, high staff retention and a happy client experience are vital for building a successful business with a strong brand.

The big question - and the real challenge going forward - is how do we stop this downward spiralthat the Southern Cross homes are currently experiencingand start heading in an upward direction?

To achieve this fairly quickly and successfully it would be vital to get all the stakeholders involved in Southern Cross to work together more productively.

These include over 40,000 employees, a couple of trade unions, 80 landlords, several major banks, devolved Scottish, Welsh and Northern Irish governments, local councils, the UK government, the Care Quality Commission in England and equivalent inspection bodies in Scotland, Wales and Northern Ireland.

The tough economic climate and the very often different agendas of the groups involved mean that only an initiative which was led, brokered and funded by central government could create such an outcome if it was to stand any chance of succeeding.

While I believe a partnership model across the care sector would vastly improve standardswithin the UK industry, I wonder whetherthe government has the appetite for such a task.

The chance for this new ownership model to be implemented has probably passed us by. If it has, in years to come I have the feeling we will look back at this opportunityas the ‘one that got away’.

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