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If QIA can spend £1.5billion for a shop and another £1.5billion for a football team it’s about time they paid for their responsibilities for staff and residents at Southern Cross and stopped avoiding taxes on much of the £248.3 million paid in rent which ends up in off-shore tax havens.

Overcharging on rent amounts to £60 per week per care home bed. The public funds involved was intended to be used to pay for the care of the elderly in Southern Cross care homes. Instead these funds are being used to pay the interest on £1,100m bonds raised by the QIA when they bought the care home builidngs from a private equity company in 2006. Taxes on this income are avoided as the funds are funnelled via companies in the Isle of Man and the Caymen Islands.

 

There are 744 Southern

Cross Care Homes in the UK with a total of 38,124 care beds for the elderly (September 2009).The published accounts for that period showed that in 2009,Southern Cross paid £239.1m in rent to the owners of the properties.

GMB research indicates that up to half of the properties were acquired by a company called NHP, of which the ultimate parent company is Delta Commercial Property. This is a company owned by the Qatari Investment Authority and is registered in the Isle of Man. The financial returns for this company are consolidated within Libra No.2 Ltd, a company incorporated and registered in the Cayman Islands.Southern Cross rents paid to the homes acquired by QIA in 2009 equated to £6,348 per bed. This was a 4.9% increase on the 2008 figure when the rent was £6,050 per bed. This in turn was a 3.1% increase on the 2007 figure when the rent per bed was £5,866. This in turn was a 7.9% increase on the 2006 figure when the rent per

bed was £5,435. Thus in the past 3 years rents have gone up by 16.8% at a time when property values were falling.

GMB have told the councilors that use Southern Cross to care for their clients, paid for with public money, that if the beds were used for different purposes the market clearing rents paid to the landlords would at least £100m less. If the accommodation was used for students, for example, GMB conclude that the total amount the landlords would receive is £121.8m.If the space were made available for private residential use, GMB consider that this would give rise to £139.5m in annual rental income.