Lady Day, Midsummer Day, Michaelmas and Christmas. They are ‘quarter days‘. The quarter days were the four dates in each year on which servants were hired and rents were due.
The significance of quarter days is now limited, although leasehold payments and rents for land and premises in England are often still due on the old English quarter days.
Quarter days have been observed since the Middle Ages. Accounts had to be settled, a ‘reckoning’ had to be made and publicly recorded on quarter days.
There is a reckoning on the way and it can’t be far off. I shouldn’t wonder if the Christmas quarter day hasn’t got something to do with it.
It could be a fearful reckoning for 20,000 of some of our most vulnerable and frail citizens.
Last week, Four Seasons Health Care, the biggest care home operator, as
reported in the £walled Times, told creditors that its £515m debt burden was;
“… not appropriate for the long-term needs of the business”.
In English I take that to mean… ‘we’re going broke’. My guess is a whack of repayments will be due on Xmas quarter day.
Southern Cross is in the eye of a perfect storm. Borrowings set at a time when the world was a different place, penniless local authorities cutting care home fees, the hike in the living wage and increases in utility, regulatory and other costs.
Margins in the care home sector are slim at the best of times and this is far from the best of times. Rumour has it, the venture capitalists, who fund Southern Cross, are on a 12% return. It’s a
complex business.
Likely scenarios?
The lenders could take a hair-cut; reduce fees, payments and spread the life of the loans. Putting aside all compassionate grounds for keeping this business going, I doubt they’ll do that .
Look at the future from their point of view; councils and the NHS are not likely to have more money in the foreseeable future. Maybe a bung in the months prior to the 2020 election?
After the election the pressures and confusion of trying to wriggle out of the EU, the damage to the economy and uncertainty means the Treasury is unlikely to relax its grip on public expenditure.
The care sector is not (as venture-caps put it) a place ‘to be exposed in’. Anyone with an ounce of common-sense would say; get out.
It might be possible for Four Seasons to find another funder. A bail-in. Borrow more money, over a longer period, at a cheaper rate; buy-out the existing debt… trade on.
There are two doubts.
The first; it’s unlikely that a new funder would take a chance on business so dependent on a public sector customer. Councils are no longer the gold-plated payer they once were.
Second; I’m guessing; contractural arrangements would prevent a buy-out or switch.
Sorry but I think it inevitable; Southern Health will go broke. They are struggling-on, causing all sorts of confusion and worry. If you have a relative in a Southern Cross care home and you can, I’d move them.
What happens if they go broke?
The CQC have the responsibility for overseeing the financial governance and solvency of providers. I wouldn’t trust the CQC with the Christmas Club money, never mind an opaque venture-cap deal.
CQC chairman, ex-PWC honcho, Peter Wyman probably recognises the inevitable but will be powerless to stop it.
Prepare for thousands of frail people, wrapped in cellular blankets out on the street? The CQC has done it before.
Too awful to contemplate? What would you do?
If debts aren’t paid, the court orders will start flying. Homes will be repossessed and no amount of contingency planning on the part of local authorities, huffing and puffing from the CQC, or the industry itself, circling the wagons, will solve this. There isn’t the spare capacity in the system.
The solution; nationalise Southern Cross, get on and do it now. A one line Bill in the House of Commons, unopposed and passed in a day.
Let health and social care run local homes jointly, get them back on their feet and later, sell them back into the sector in small lots, at a profit.
Sound familiar?
Yup, we did it for the banks… now let’s do it for yer granny.
Like my food blog, I’ve not been here for some time… The only suggestion I can think of this week, for living beyond dementia, is to not give up! A very close friend’s son died unexpectedly, a colleagues house burned to the ground, including their pets, and the week before that, a close girlfriends husband had a major stroke.
I made a silly mistake on turning in last night: I chose the wrong bedroom. When Maureen woke in the early hours and found me in the marital bed she let me have it. The onslaught lasted for over half an hour as I was told in no uncertain terms what a s*** I was. Fortunately, I’ve now got a strategy for ‘cocking a deaf un’ so that I don’t absorb the vitriol and there was a bonus on-line.
I will be contacting the Chief Executive’s Office of 
Neuropathy Nightmare 