THE biggest surprise about Southern Cross Healthcare’s profit warning last week was not that the nursing-homes group could find no buyers for some of its freeholds. The stock market is littered with companies that have come a-cropper after attempting financial gymnastics with their property assets. Just ask the pub group Mitchells & Butlers. Of more interest was the latest sign of a public-sector spending squeeze hitting the private sector. Because central government was late in transferring cash to local authorities, it meant that fewer patients were admitted to Southern Cross’s homes. Councils make up 70% of the group’s income, something previously portrayed as making its finances rock solid. However, the knock-on effect of Alistair Darling’s belt-tightening is that some local-authority balance sheets have less room for...
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