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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2011/02/cuts-hit-southern-cross-admissions.jpg"><img class="alignnone size-full" title="Government spending cuts have led to a drop in elderly residents being admitted by local authorities to Southern Cross facilities" src="http://londonglossy.com/wp-content/uploads/2011/02/min-cuts-hit-southern-cross-admissions.jpg" alt="Government spending cuts have led to a drop in elderly residents being admitted by local authorities to Southern Cross facilities"/></a></p>
<p>Government spending cuts have led to a drop in elderly residents being admitted by local authorities to the UK&#8217;s largest care home group, the company has warned.</p>
<p>Southern Cross Healthcare said like-for-like admissions to its elderly care business were down 7% in the three months to December 31, after a 15% slide in local authority admissions.</p>
<p>The company, which houses some 37,000 residents in more than 750 homes, said: &#8220;The reduction in local authority admissions is reflective of cuts in service provision to older people in direct response to reduced central government funding.&#8221;</p>
<p>The decline in local authority admissions was offset by an increase in admissions from the NHS and an 18% increase in self-funded admissions but overall occupancy in the period was down to 87.6% from 90.7% a year earlier.</p>
<p>The decline in admissions in the first quarter represents a poor start to the financial year for Southern Cross, after it reported a more than doubling in annual losses in the year to September 30.</p>
<p>The group has suffered as councils and primary care trusts, which pay for more than 70% of its customers, demanded rate reductions while rents have risen, and have sought more competitive rates from other companies.</p>
<p>The group said it continues to &#8220;negotiate robustly&#8221; with authorities over fees and remains concerned over the risks fee-cutting has on the level of care provided to the elderly.</p>
<p>The Darlington-based group, which owns the Ashbourne Senior Living brand, said adjusted underlying earnings were down to £5 million from £14.4 million the previous year, while revenues were down at £236.3 million from £240.5 million.</p>
<p>Shares in the firm dipped 0.04p to 20.5p after the trading update. Brokers Panmure Gordon downgraded its forecast for full year adjusted underlying earnings to £22.2 million.</p>
<p>Panmure analyst Damian McNeela said earnings were revised as the operating environment is set to remain challenging and there was no update on the renegotiation with landlords.</p>
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