:00:03. > :00:08.Hello. This week I'm in Luton in Bedfordshire. And this is what's
:00:08. > :00:14.coming up on tonight's Inside Out. What happened to the �50 million
:00:14. > :00:17.grant to improve the lives of Luton residents? They have no faith any
:00:17. > :00:21.more. They've lost hope. They have no faith at all. They've been
:00:21. > :00:23.promised so much in the past, and they've got nothing.
:00:23. > :00:27.A former inspector reveals what went wrong with Southern Cross Care
:00:27. > :00:31.Homes. And we see if the mountain bike
:00:31. > :00:37.course in Essex is good enough for the Olympics. It's tough, it's fun,
:00:37. > :00:41.it's fast. And I think it's going to be a really great show.
:00:41. > :00:51.They're our three surprising stories where we live. On tonight's
:00:51. > :01:00.
:01:00. > :01:06.The recent riots left many people wondering just what had happened to
:01:06. > :01:10.our communities. And also how to make sure this kind of thing
:01:10. > :01:13.doesn't happen again in the future. In the '90s, there were riots in
:01:13. > :01:16.parts of Luton. And one of the solutions was to give �50 million
:01:16. > :01:20.to improve the area. So, did it work? And how has the money been
:01:20. > :01:30.spent? Nick Conrad has been investigating.
:01:30. > :01:30.
:01:30. > :01:33.Marsh Farm in Luton. One of the most deprived areas in the UK.
:01:33. > :01:37.Blighted by memories of rioting in the '90s. 10 years ago, it was
:01:37. > :01:40.given a lifeline. And that lifeline came in the form of cash. �50
:01:40. > :01:43.million to be exact. Paid over 10 years, it was regeneration money
:01:43. > :01:49.from the Government. A new deal, designed to lift Marsh Farm out of
:01:49. > :01:52.deprivation and create a lasting legacy. It's not a handout, it's a
:01:52. > :01:56.deal. It's a partnership with the local community. The more you are
:01:56. > :02:03.prepared to get involved, the more you are prepared to do, the more we
:02:03. > :02:06.will be there helping you to help people help themselves locally.
:02:06. > :02:15.a decade of cash injection came to an end earlier this year and the
:02:16. > :02:22.future, well, it looks anything but right. -- bright. How let down do
:02:22. > :02:28.people feel in Marsh Farm? Totally. Absolutely totally. Because they've
:02:28. > :02:31.been promised so much in the past and they've got nothing. So, why is
:02:31. > :02:40.there only a half empty building, a council-owned children's centre and
:02:40. > :02:45.this scruffy piece of land to show It's a bright Wednesday morning in
:02:45. > :02:52.November. The Pearly Shopping Centre right in the middle of Marsh
:02:52. > :02:55.Farm. Minister Vic Cowl has lived in Marsh Farm for over a decade. He
:02:55. > :02:57.remembers what it is like being told that area was getting �50
:02:57. > :03:03.million of new deal money. Tremendous amount of excitement
:03:03. > :03:06.because it was such a large sum. And it came out of the blue. When
:03:06. > :03:12.we got it, people were like, at last, something. The poor offspring
:03:12. > :03:15.of the town. People were so excited. When they could see what was
:03:15. > :03:20.proposed that was going to happen, for this area, it was so
:03:20. > :03:27.revolutionary. In 2001, residents were promised the Pearly Shopping
:03:27. > :03:30.Centre would be replaced. I've got to be honest, it doesn't look like
:03:30. > :03:34.it's had a multi-million pound facelift. Well, of course, it
:03:34. > :03:37.hasn't. This is still the original. We are still waiting for it. There
:03:37. > :03:42.is nothing new apart from the odd coat of paint. But that's it. This
:03:42. > :03:49.is what it was originally. Apart from some paint on the inside,
:03:49. > :03:53.which again was paid for, that's it. Nothing has changed. In fact, a lot
:03:53. > :03:58.of promises were made. Promises which included the centre of Marsh
:03:58. > :04:03.Farm being redeveloped, a new shopping centre, affordable houses.
:04:03. > :04:08.A master plan costing �1 million was drawn up. But delays and
:04:08. > :04:15.internal wranglings meant most of the plan never went ahead. But
:04:15. > :04:19.there is something to show for the cash. One of the first things the
:04:19. > :04:29.Marsh Farm Community Trust did is to buy an old factory for community
:04:29. > :04:36.
:04:36. > :04:41.use. It cost �6 million to buy and refurbish. It was knocked down and
:04:41. > :04:44.replaced with this, Futures House. At a cost of another �9 million. So
:04:44. > :04:49.is this �15 million building project on which the entire future
:04:49. > :04:53.of Marsh Farm's regeneration worth it? The idea is the building will
:04:53. > :04:56.be able to generate enough money to be able to run itself as a
:04:56. > :04:58.community hub and fund projects in Marsh Farm. It's supposed to be the
:04:59. > :05:01.sustainable legacy of the �50 million grant. But is it
:05:01. > :05:04.sustainable? One expert is not convinced. He looked at Marsh Farm
:05:04. > :05:09.Futures Strategy as part of a government team which evaluated
:05:09. > :05:13.regeneration spending in Luton. Do you think the Luton strategy has
:05:13. > :05:18.been successful? No. It demonstrates a lack of forward
:05:18. > :05:21.thinking. There is a lack of management, lack of planning. When
:05:21. > :05:28.you look at the statistics, it doesn't show much resemblance to
:05:28. > :05:30.any sort of desired outcome they would have had from the beginning.
:05:30. > :05:39.The idea is rent generated from tenants in this building improves
:05:39. > :05:45.the lives of people in Marsh Farm by running community project. --
:05:45. > :05:49.projects. But it's less than half full. We did ask Marsh Farm Futures
:05:49. > :05:52.Trust who run this place how much money they spent the past year on
:05:52. > :05:54.projects for the community. But they wouldn't tell us. We also
:05:54. > :05:58.wanted to do how much income they've received from tenants. But
:05:58. > :06:01.they wouldn't tell us. And we also wanted to know how successful their
:06:01. > :06:07.fundraising has been over the past year or so. But, guess what, they
:06:07. > :06:11.wouldn't tell us. So, we found out anyway. According to the most
:06:11. > :06:20.recent accounts, the income is half what was predicted. �342,000 for a
:06:20. > :06:23.�15 million outlay. And there's no sign of any community-based project.
:06:23. > :06:29.So what else is there to sustain a legacy of regeneration in Marsh
:06:29. > :06:35.Farm? This. A rather attractive piece of land, was sold to Marsh
:06:36. > :06:43.Farm Trust by Luton Borough Council in 2008 for a shade over �700,000.
:06:43. > :06:47.�763,000, to be exact. And there are no firm plans for using it. For
:06:47. > :06:50.anything at all. In fact, there's only one thing this land is allowed
:06:50. > :06:57.to be used for and that is affordable housing. But there's no
:06:57. > :06:59.money available and there's no developer waiting in the wings.
:06:59. > :07:06.According to Crispian, this doesn't bode well for the future
:07:06. > :07:09.regeneration in Marsh Farm. The big problem there is that they own a
:07:09. > :07:14.piece of land at a time when there are no developers, there's no-one
:07:14. > :07:17.willing to invest in housing because there is not any money.
:07:17. > :07:19.You're probably thinking that about 30 million we haven't told you
:07:19. > :07:27.about. Well, just over 5 million went on management and
:07:27. > :07:30.administration. 5 million went into the pockets of consultants. And the
:07:30. > :07:38.rest of the money, well, that went largely on community schemes, many
:07:38. > :07:43.of which haven't continued. Back in Marsh Farm, I asked Vic to show me
:07:43. > :07:51.some positive news. Well, this is the Redgrave Children and Young
:07:52. > :07:55.People's Centre, which was a mercenary, basically. -- nursery.
:07:55. > :07:58.This has been a tremendous success. And still is. And, of course, it
:07:58. > :08:01.also acts almost as a feeder for the school. It's part and parcel of
:08:01. > :08:03.the community. And I also came across Jackie. Her life was
:08:03. > :08:07.transformed when she received an education bursary from the
:08:07. > :08:10.regeneration money. It was amazing. It just opened up opportunities for
:08:10. > :08:15.me. I learned things that I could never have learned. I have grown as
:08:15. > :08:18.a person. In the second year of my degree, I got a new job, and if I
:08:18. > :08:21.hadn't have done the course, I wouldn't have had the skills to be
:08:21. > :08:23.able to get through the interview process. So it's made a huge
:08:23. > :08:27.difference to me. So, which organisation is responsible for
:08:28. > :08:37.making sure that every penny of the �15 million was wisely spent? Luton
:08:38. > :08:42.
:08:42. > :08:45.Borough Council. The very same organisation which broke funding
:08:45. > :08:48.rules as regeneration grants need to be funding solid regeneration
:08:48. > :08:51.projects, not the purchase of a scruffy piece of land. They didn't
:08:51. > :08:55.want to be interviewed, but they told us... All the transactions and
:08:55. > :08:58.transfers were undertaken with the express permission of Government.
:08:58. > :09:08.Marsh Farm Futures also didn't want to be interviewed, but they told
:09:08. > :09:11.
:09:11. > :09:14.us... Money for community projects is ring-fenced, but it may not all
:09:14. > :09:16.be spent this year as we are committed to working with our
:09:16. > :09:19.partners in delivering programme activities, rather than just
:09:19. > :09:23.spending money to tick boxes. They also told us that the 40% occupancy
:09:23. > :09:26.of Futures House is a good start. But there's no doubt how Vic feels.
:09:26. > :09:36.I am very, very disappointed. Because a lot of people tried hard
:09:36. > :09:38.
:09:38. > :09:41.to improve it. But they got nowhere. And the people have just accepted
:09:41. > :09:44.the attitude it doesn't matter who's in power, what they vote for,
:09:44. > :09:47.what they propose, you'll get what you are given and like it. Do you
:09:47. > :09:51.regenerate an area or do you regenerate people? People. It is
:09:51. > :09:53.people are what make the area. It's about who is there, it's not about
:09:53. > :09:57.building things and properties. It's about the people who are here.
:09:57. > :10:00.And Marsh Farm is an amazing community as it is. I think with
:10:00. > :10:01.the right sort of investment and if people feel that they are being
:10:02. > :10:04.really heard, it could just be amazing.
:10:05. > :10:14.Now, if there's something you think we should investigate on inside out,
:10:15. > :10:18.
:10:18. > :10:23.Later, what went wrong at Southern Cross?
:10:23. > :10:31.Now, Essex isn't exactly known for its mountains. The highest point is
:10:31. > :10:34.actually 500 feet above sea level. -- less than. So how do you go
:10:34. > :10:37.about building a mountain bike course when you haven't got any
:10:37. > :10:43.mountains? Well, Sean Peel went to meet the people who were determined
:10:43. > :10:46.to bring the Olympics to Essex. London 2012's Mission Improbable.
:10:46. > :10:52.Make a mountain biking course in the flattest region of the country.
:10:52. > :10:55.Make it close to the Olympic Park. And make it the best ever. After a
:10:55. > :11:05.long search, they found 550 acres of Salvation Army land on the
:11:05. > :11:11.
:11:11. > :11:17.Thames Estuary. Essex land guarded by the ruins of a 700-year-old
:11:17. > :11:27.castle. Hadleigh Farm. After all the planning and the knock-backs,
:11:27. > :11:33.
:11:33. > :11:40.these riders are about to find out The Hadleigh Farm International is
:11:40. > :11:43.This is Formula One mountain biking style. History being made in Essex.
:11:43. > :11:49.Some of the world's top riders are here from all the continents of the
:11:49. > :11:55.world. Why? Because this is their first and last opportunity to check
:11:55. > :11:58.out this course ahead of London 2012. It was the hottest day in
:11:58. > :12:03.July for the official road test of the course by the same riders who
:12:03. > :12:08.will be back for next year's games. The test was also a triumph of
:12:08. > :12:18.belief and determination. Belief that the relative flatlands of the
:12:18. > :12:36.
:12:36. > :12:39.East could be the home of Olympic It is raw, tough racing. It's
:12:39. > :12:42.something that we managed to overcome those doubters who said
:12:42. > :12:45.that you can't have a mountain bike race where there are no maintenance.
:12:45. > :12:47.Well, we've proven that you can. Mountain biking at Hadleigh had a
:12:47. > :12:57.difficult birth. The original choice was Weald Park near
:12:57. > :13:07.Brentwood. Lord Coe and co rolled in to tell the world that Weald had
:13:07. > :13:09.
:13:09. > :13:12.wheels. If it did, they soon fell off. In an embarrassing twist, the
:13:12. > :13:14.International Cycling Federation said it was too flat. They have six
:13:14. > :13:17.months to find an alternative. Six months during which the vultures
:13:17. > :13:20.from the higher ground circled overhead. But Essex had the answer
:13:20. > :13:26.and the answer was Hadleigh Farm. One of the technical challenges on
:13:26. > :13:29.the course has been named the leap of faith. It could be said that
:13:29. > :13:32.just thinking about staging mountain biking here could be just
:13:32. > :13:36.that. I always knew it would be a big race success. Original it was
:13:36. > :13:39.going to be in Brentwood. We were disappointed when that was felt to
:13:39. > :13:42.be less challenging. But I grew up around Hadleigh, so I have known
:13:42. > :13:50.this area all my life. I knew this area would be a fantastic venue.
:13:50. > :13:55.There is a great view across the estuary. Not a leap of faith for me.
:13:55. > :14:02.They are just blown away by it. it's ideal for spectators. On some
:14:02. > :14:09.courses, riders disappear into the woods for long spells. But in this
:14:10. > :14:15.natural bowl, 60% of the 5km course is laid out for all to see. After
:14:15. > :14:20.the games, it will be adapted. Absolutely terrific advert for the
:14:20. > :14:24.locality, I think. It may change a lot of peoples minds about the
:14:24. > :14:28.perception of Essex may be. Sometimes you go to an event and if
:14:28. > :14:32.it is a big race, you only see the section in front of where you are
:14:32. > :14:35.standing. Because of all the hills. We can see the start, we can see
:14:35. > :14:38.that drop, we can see that rabbit tunnel thing over there. I really
:14:38. > :14:41.like watching the bikes go really fast. There may be no mountains,
:14:41. > :14:48.but no matter. After eight laps, they'll have cycled the height of
:14:48. > :14:52.Ben Nevis. There are climbs that will burn iron lungs and rocky
:14:52. > :15:01.descents to break hearts and bones. World champions took part in this
:15:01. > :15:06.test and they all agreed happily was hard to handle. -- Hadleigh was
:15:06. > :15:08.hard to handle. Every course is different and that is what is
:15:08. > :15:12.fantastic about the sport of mountain biking. There is always
:15:12. > :15:16.new challenges, always new courses. I think it is tough, it is fun, it
:15:16. > :15:26.is fast and I think it is going to be a really great show. I hope tons
:15:26. > :15:29.
:15:29. > :15:33.of people come to watch the race It's difficult. It's difficult
:15:33. > :15:39.technically and also physically. The only problem is it really
:15:39. > :15:44.difficult to pass on the track. Most of the time you are on a
:15:44. > :15:54.single track and it's really difficult to pass. But I was in
:15:54. > :15:56.
:15:56. > :16:00.front today, so it was not a problem. It is never going to be as
:16:00. > :16:06.hot as Sydney or Beijing, but the things here is it is exposed all
:16:06. > :16:12.the way round. For Dan Jarvis, it was never in doubt. Now he's a
:16:12. > :16:15.commentator. And he has to pinch and self when he sees the world's
:16:15. > :16:25.top riders competing on his local park. This is the very first place
:16:25. > :16:26.
:16:26. > :16:30.that I rode a mountain bike. There's a post down there. It's got
:16:30. > :16:34.an imprint of my face on it. You could say that there is a part of
:16:34. > :16:38.me always here in Hadleigh. But it is been amazing for me to see. When
:16:38. > :16:41.I was riding here 25 years ago, there was no way I would of thought
:16:41. > :16:44.that the Olympics would be here. Not only are they going to be
:16:44. > :16:46.easier, but we've actually realistically got a claim for the
:16:46. > :16:49.best Olympics course ever. The test event was to examine crucial
:16:49. > :16:59.aspects of operations ahead of next year's games. Security was tight.
:16:59. > :16:59.
:16:59. > :17:03.These former Gurkhas were brought Next year, there will be airport-
:17:03. > :17:05.style checks. This is Tony Kavanagh, the venue manager. Today, he wants
:17:05. > :17:07.to make sure everything works. Stewarding, communications,
:17:07. > :17:13.catering, first aid, timing, transport, toilets. It's Tony's
:17:14. > :17:23.world and he is making sure it turns. Touch temporary plastic
:17:23. > :17:26.chair, it's all going well. We are going through basically a period
:17:26. > :17:29.now called readiness. The test event is the culmination of
:17:29. > :17:32.readiness. But we've actually been doing months and months of planning
:17:32. > :17:34.before that for the test event. After this, we go into what we call
:17:34. > :17:37.operation planning three. And that's all about providing for
:17:38. > :17:42.contingencies. So what if it hadn't been gloriously sunny and we'd had
:17:42. > :17:45.loads of rain? What if half the athletes say they don't like the
:17:45. > :17:49.course any more? How are we going to handle that situation? So all of
:17:49. > :17:52.the what ifs. We know we can do it. Now, hopefully by the end of today,
:17:52. > :17:56.what happens if there are things putting our way that stop us doing
:17:56. > :17:59.it. Because there's only one thing we have to do which is to deliver.
:17:59. > :18:04.And that's what needs to happen next year. It's not just Tony who's
:18:04. > :18:14.pleased. There are many others breathing a sigh of relief, not
:18:14. > :18:16.
:18:16. > :18:18.least the organisers. The choice of Essex was called into question. And
:18:18. > :18:28.that turned into incredulity when their first choice was turned down
:18:28. > :18:32.and they still believed the only way was Essex. No one is coming
:18:32. > :18:35.here and saying you need to make it harder. It makes me smile every
:18:35. > :18:38.time I drive into Essex is and see the sign saying welcome to the 2012
:18:38. > :18:42.mountain bike race. That is fantastic for the sport and I think
:18:42. > :18:46.it is fantastic for Essex. We are very happy to be here and we think
:18:46. > :18:49.we have found a new way for the sport, and new way to deliver the
:18:49. > :18:52.sport and we have done that with Essex. So it's brilliant. There are
:18:52. > :18:55.many who said it could never happen. Mountain biking in Essex. But it
:18:55. > :18:58.can happen. It has. As we have witnessed today, you don't need
:18:58. > :19:02.mountains to stage mountain biking. And you don't need mountains to
:19:02. > :19:05.provide a course that will test the very best riders in the world. And
:19:05. > :19:07.those riders will be back here again next year for the Olympic
:19:07. > :19:09.games. But next time the whole world will be watching.
:19:09. > :19:11.pressure! When care home operator Southern
:19:11. > :19:15.Cross collapsed in the summer, thousands of residents were left
:19:15. > :19:18.worrying about their care. 50 of the homes were here in our region.
:19:18. > :19:28.But a handful of people made millions of pounds from the company.
:19:28. > :19:29.
:19:29. > :19:34.So, did Southern Cross put profit For years, managers stayed quiet
:19:34. > :19:36.about the company's problems. Now, in the wake of its collapse, the
:19:36. > :19:46.real story is emerging. Jude Good managed five homes for Southern
:19:46. > :19:48.
:19:48. > :19:50.Cross. It was a 60 bed unit and we only had one bath working for 60
:19:50. > :20:00.residents. The requirement is to have one bath for every eight
:20:00. > :20:01.
:20:01. > :20:04.residents. They knew that I had only one bath working and
:20:04. > :20:09.continually failed to put the money in to get the baths going.
:20:09. > :20:15.Relatives have told us it was their loved ones feeling the impact.
:20:15. > :20:20.George Gilles's mum Kathleen lived in a Southern Cross home. She had
:20:20. > :20:23.to go into hospital once. The hospital pointed out that she
:20:23. > :20:27.hadn't been cleaned properly after she had been to the toilet. And
:20:27. > :20:30.that apparently had been going on for a while. So what went wrong for
:20:30. > :20:37.Southern Cross? Its beginnings were promising. It was set up by John
:20:37. > :20:42.Morton in 1996. Within six years, he was running 140 homes. For
:20:42. > :20:47.industry watches, it was a business of which could be proud. -- he
:20:47. > :20:55.could. Within the industry, he had a reputation for being a very
:20:55. > :20:59.honest man and also a very caring man. Most people who enter this
:20:59. > :21:06.business do so because they have a desire to care for people. The big
:21:06. > :21:09.businesses unfortunately have lost that along the way. But John was
:21:09. > :21:11.certainly one of the early entrepreneurs who believed that
:21:11. > :21:18.care was as important as profit. Seven years later, Mr Morton
:21:18. > :21:22.decided it was time to move on. He sold Southern Cross for �80 million,
:21:22. > :21:24.of which he netted 25 million. He told the BBC his company was
:21:24. > :21:31.profitable and its level of care was considered exemplary. But he
:21:31. > :21:33.didn't wish to be interviewed. The business was so attractive to
:21:33. > :21:43.investors that Southern Cross changed hands several times and
:21:43. > :21:49.
:21:49. > :21:52.hundreds of new homes were bought. In 2002, a management buyout backed
:21:52. > :21:56.by a German bank saw ownership of Southern Cross change hands. They
:21:56. > :22:00.changed the face of the business. When John Morton ran it, he ran it
:22:00. > :22:03.as a care business. When the new investors came in, the equity
:22:03. > :22:08.providers, they ran it as a business which regarded the clients
:22:08. > :22:11.as simply factors of production. This is how it worked. Southern
:22:11. > :22:18.Cross made a profit from selling many of the care home buildings as
:22:18. > :22:21.property prices rose. It paid rent to the new owners. With the profit
:22:21. > :22:24.from the sales, Southern Cross bought more homes but continued to
:22:24. > :22:27.operate the care side of the business. It is known in the trade
:22:27. > :22:37.as sale and lease back. And initially it seemed the sky was the
:22:37. > :22:38.
:22:38. > :22:40.limit. In 2004, American private equity firm Blackstone owned by
:22:40. > :22:46.billionaire Stephen Schwartzman bought Southern Cross for �165
:22:46. > :22:49.million. Former directors Philip Scott and Graham Sizer remained
:22:49. > :22:52.with the company. Southern Cross was a very profitable company. But
:22:52. > :22:55.while the business was doing well, there were growing concerns.
:22:55. > :22:57.Inspectors, patients and some Southern Cross staff were raising
:22:57. > :23:03.questions about the quality of care of vulnerable elderly people. Kevin
:23:03. > :23:08.Mansel was in charge of inspectors assessing care homes in East Anglia.
:23:08. > :23:14.There were lots of individually very distressing failures. Obvious
:23:14. > :23:18.signs this company wasn't well- managed, didn't invest. And yet
:23:18. > :23:28.their reputation in terms of the market, if you want to call it that,
:23:28. > :23:31.
:23:31. > :23:32.was unsurpassed. Other inspectors were equally concerned. We've
:23:32. > :23:35.obtained these previously undisclosed reports which bring
:23:35. > :23:38.together the concerns of inspectors from right across the country. In
:23:38. > :23:48.effect, an annual health check on the Southern Cross empire. For
:23:48. > :23:51.
:23:51. > :23:53.three years, the reports highlight the same problems. People who have
:23:53. > :24:03.dementia were poorly served. This was also highlighted in the
:24:03. > :24:07.
:24:07. > :24:10.previous report. While many care homes did meet the national minimum
:24:10. > :24:12.standards, there were those where inadequate numbers of toilet and
:24:12. > :24:15.bathroom facilities were available. Not all call bells were functioning.
:24:15. > :24:18.Staff were carrying jugs of hot water to rooms. And one recurring
:24:18. > :24:21.theme was very familiar to Kevin. We were aware of the chronic kind
:24:21. > :24:31.of turnover in managers of homes way above anyone else. We were
:24:31. > :24:32.
:24:32. > :24:35.aware of the sort of external support for homes. The manager is
:24:35. > :24:45.one tier up also being very unstable. Just a lot of unhappiness
:24:45. > :24:46.
:24:46. > :24:48.about the way the company was run. In November 2004, Southern Cross
:24:48. > :24:55.bought care home owner NHP and became the UK's biggest private
:24:55. > :24:58.care provider, running more than 500 homes. Inside Out wanted to
:24:58. > :25:05.talk to the American company that was watching Southern Cross expand.
:25:05. > :25:08.But no one from Blackstone would talk to us. In a statement, it
:25:08. > :25:10.insisted that the company was acutely focused on quality of care
:25:10. > :25:13.issues. And that any issues were immediately identified and
:25:13. > :25:17.rectified as quickly as possible without regard to cost. The company
:25:17. > :25:21.was well regarded by its customers and its regulator. And it insists
:25:21. > :25:24.the sale and lease back model was in place before it came involved.
:25:24. > :25:34.In 2006, the landlord side of the business was sold and Southern
:25:34. > :25:41.
:25:42. > :25:44.Cross was floated on the stock market. Stephen Schwartzman and the
:25:44. > :25:47.directers sold their shares at different times. Blackstone made a
:25:47. > :25:49.reported �614 million at the time of flotation in July 2006. The
:25:49. > :25:54.directors sold their shares in December 2007, making them
:25:54. > :25:57.multimillionaires. Blackstone told us it did not profit from stripping
:25:58. > :26:00.assets, but invested in and built a company that was viewed by the
:26:01. > :26:03.market as an industry leader. In June 2008, the company issued a
:26:03. > :26:11.profits warning, saying it had breached its banking covenants. Its
:26:11. > :26:19.share price tumbled by 85%. The BBC approached the directors who had
:26:19. > :26:22.done so well from the sale. A spokesman for the former chief
:26:22. > :26:29.executive Philip Scott told us that when he left the occupancy was over
:26:29. > :26:32.90%. This would not have been possible if residents and their
:26:32. > :26:35.families did not think the business had the right ethos. A spokesman
:26:35. > :26:37.denied the sale and lease back option Hadfield, seeing Southern
:26:37. > :26:43.Cross had got into difficulties because Mr Scott's successors could
:26:43. > :26:46.not pay the rent. -- saying. Mr Scott's spokesman said he sold his
:26:47. > :26:52.shares as a result of changes in tax laws and he rebought shares at
:26:52. > :26:55.a later date and lost money. The situation has not resulted in
:26:55. > :27:00.wholesale home closures. Southern Cross shareholders have been the
:27:00. > :27:02.ultimate losers, not the residents. One-time chairman William Colvin
:27:02. > :27:06.and operations director for John Murphy refused to answer our
:27:06. > :27:16.questions. Former financial director Graham Sizer told us that
:27:16. > :27:16.
:27:16. > :27:25.care was paramount. Without that, there was no business. I don't deny
:27:25. > :27:29.there would have been care issues at some homes. There will always be
:27:29. > :27:31.issues in this type of business. He also said that the timing of
:27:32. > :27:34.selling his shares was driven by government changes to capital gains
:27:35. > :27:37.tax rules. Those shares were sold in December 2007. He still owns
:27:37. > :27:46.300,000 shares today. Southern Cross, which looks after more than
:27:46. > :27:54.30,000... Britain's biggest care home provider... Finally, this
:27:55. > :27:57.summer, Southern Cross were forced to throw in the towel. After a
:27:57. > :28:00.summer of anxiety for staff and 31,000 elderly residents, last week,
:28:01. > :28:05.all but nine of the former Southern Cross homes were assigned to new
:28:05. > :28:12.companies. Effectively marking the end of Southern Cross. They cared
:28:12. > :28:17.about their profits. But they had forgotten that the very heart of it
:28:17. > :28:26.is the residents. If we don't care about our residents, how can we
:28:26. > :28:30.possibly have everything else that Well, that is it from Luton. I hope
:28:30. > :28:37.you have enjoyed the programme. If you have missed any of it tonight,
:28:37. > :28:41.you can catch it again on the eye player. -- iPlayer. I will see you
:28:41. > :28:44.next week when I will be back with these surprising stories. The
:28:44. > :28:47.people accused of theft or false accounting who say we have done
:28:47. > :28:50.nothing wrong. And living with dementia. Bob used to make luxury