Unison report following Southern Cross crisis says privatisation of care industry 'is experiment that has gone seriously wrong'
By Hélène Mulholland and agencies
Britain's Business Secretary Vince Cable said he had asked officials
to investigate the role of private equity firms supplying public services.
Photograph: Steve Parsons/PA
The crisis facing the country's largest provider of care homes, Southern Cross, has sparked fears that other firms in the sector are also "on the brink" of collapse, a leading union has said.
A report by Unison says the privatisation of the care industry "is an experiment that has gone seriously wrong".
Southern Cross, which is responsible for looking after 31,000 elderly residents, has announced that it will underpay its rent for the next four months as it struggles with a £230m annual rental bill.
But Unison has warned that the problems facing the company may not be a one-off and takeovers of public services by "private sector wheeler-dealers" that use similar "high risk business models" could leave taxpayers picking up the bill for more company failures.
The business secretary, Vince Cable, said on Monday that he had asked officials to investigate the role of private equity firms supplying public services. He called the financial turmoil at Southern Cross a "shocking state of affairs".
The report by Unison, the country's largest public sector union, highlights the "private equity merry-go-round" that sees many firms seek "major profit opportunities" from health and social care services and from buying public assets cheaply".
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