THE UK’s largest care home provider is overhauling its business to attract more selffunded residents after its dependence on local authority and NHS finance led to record losses.

Southern Cross Healthcare, based in Darlington, yesterday revealed pre-tax losses of £22.9m in the six months to March 31, compared to £12.5m for the same period last year.

The company, with nearly 39,000 beds, now aims to increase the number of selffunded residents at its 752 homes, having started to feel the effects of the squeeze on public finances.

Presently, only 18 per cent of its residents are selffunded, against an industry average of 30 per cent.

It comes as further pressure is expected on public sector funding and local authority fee increases for this year average only one per cent.

A spokesman said: “It was predicted. What has surprised us is quite how severe it has been, with local authorities not increasing fees in line with increased costs such as the national minimum wage and utility bills. It varies from region to region, but some are not keeping pace with costs.

“You can go from one local authority to an adjacent one and find a 25 per cent difference in fee rates.

“We are also seeing local authorities delaying putting people into residential care or keeping them at home for longer.”

Average occupancy at the group’s homes in the six months to March had dropped to just under 87 per cent, from just under 89 per cent the previous year.

The plan to attract more self funded residents forms part of a New Horizons programme which also aims to see costs reduced by one per cent of revenue and service quality improved by the end of next year.

It has also seen several tiers of management stripped away, with some redundancies, to be replaced by care professionals.

The spokesman said: “It wasn’t cost cutting. There were seven levels of management, that has been cut to three. We have taken on 60 care workers, ex-nurses and people who understand how to make it more efficient.”

Chief executive Jamie Buchan said that New Horizons was necessary to improve operating efficiency, adding: “We are operating within a challenging environment featuring a combination of public sector funding restraint and significant disparity in the commissioning practices of local authority budget holders.

“Given this backdrop, the successful delivery of New Horizons becomes even more imperative.”