Elderly people in care homes across Tayside and Fife owned by an international organisation with funding difficulties have been given an assurance that they will not be made homeless.
Southern Cross Healthcare operates 14 care homes across Tayside and Fife.
A leading union claimed that 31,000 elderly residents in 750 UK care homes faced being made homeless due to financial difficulties at Southern Cross, which has Middle Eastern financial backers.
Last week the company issued a profits warning.
The GMB union which has thousands of members working for Southern Cross in UK care homes claims that public funds that should be used to pay for care of the elderly are being used to pay the interest on bonds raised when the Qatari Investment Authority (QIA) bought care home buildings from a private equity firm.
GMB Scotland senior organiser Michael Conroy said, “It is time for the QIA to clear up the financial mess that it and the private equity industry created at Southern Cross and which now threatens to make 31,000 vulnerable elderly UK residents homeless.
“This is yet another case where the private sector has already made huge profits from public funds and now expects the taxpayer to clear up the mess now that it is all going wrong.”
Michael MacIntosh, regional director for Scotland and Northern Ireland at Southern Cross Healthcare, said, “I would like to reassure people that residents in our care homes do not face the prospect of being made homeless.
“Like all independent care providers, we continue to face challenges because fewer people are being placed in our homes by local authorities, many of whom are seeking to reduce the fee levels they pay in line with public spending cuts.
“Working with the support of our banks, Southern Cross is focused on improving our operational effectiveness and accelerating negotiations with landlords to seek reductions in our rent bill.
“We have an important role to play in delivering frontline services to care for elderly people across the UK. We are taking decisive action to ensure our business remains sustainable.
“We are also urging government, landlords and commissioners to work co-operatively in supporting us.”