![[Southern Cross Healthcare Group - Investor Relations]](/ir/sche/images/banner.gif)
Our objective is to deliver continual improvements in the way we work but in a way that is sustainable and aligns, as far as is possible, our core business objectives with our wider responsibilities.
To reflect the increased importance of our corporate social responsibility ("CSR") policies to both Southern Cross and to our stakeholders it was decided during the year that the Group Operations Director, John Murphy, would take the lead role in all CSR related matters, while overall responsibility remains with the full Board of Directors. The Company has established a CSR working group under his Chairmanship with the remit of developing the Company's CSR policy and driving the process. Membership of the committee has been drawn from all business units to ensure the whole Company contributes to the development of the Company's CSR policy.
Southern Cross is fully committed to the continued development of our business in a way that takes account of our responsibility to our many stakeholders including our service users, the wider community, the environment, our employees, our suppliers and those who own the business. Our objective is to deliver continual improvements in the way we work but in a way that is sustainable and aligns, as far as is possible, our core business objectives with our wider responsibilities.
Care Standards and Service Quality
Our aim is to provide the best possible levels of care and service delivery to our service users. Our policies and procedures are constantly reviewed and updated, in line with best practice and current legislation and are available to all homes via the Group intranet.
The Company operates a whistleblowing policy which is published on our intranet and is also placed on all home notice boards. Currently the Company is working with the charity "Action on Elder Abuse" to pilot a Whistleblowing hotline which employees can use if they have any concerns surrounding the care of our service users.
From April 2008, inspection scores will be used to introduce a star rating system for care homes. This should ultimately lead to price differentiation, with operators achieving higher fees for quality service and environment.
The Board reviews the results of inspection scores at every meeting and is committed to delivering the highest standards of care. We acknowledge that from time to time individual homes can experience problems. Where a home has not scored well (either through internal audit or regulatory inspection) or a complaint has been received, investigation and review are initiated immediately through the operational teams, and action plans with appropriate delivery timescales are implemented.
Inspection scores are based on the regulators overall view of the outcomes the service provides to the people who use it. At the year end, the profile of inspection scores across the portfolio was as follows:
Inspection Scores
Community
Our care centres are an integral part of the communities in which we work, delivering an essential social service that must enable the continued interaction of our service users both with their families and the wider community. Most activities are organised at a local level by individual care centres, as we believe they are in the best position to understand local needs. As well as making donations to a number of local causes the Company supports local fund raising, often on a pound-for-pound matching basis. We try to involve as many sections of the community as possible in fund raising efforts, be that traditional events such as coffee mornings or more unique events.
These events are generally organised for the benefit of our service users' social funds but of course they also serve the community through its engagement with our service users. The Company has continued its support of local primary school football and considers this link between young and old to be particularly valuable.
Support for national charities also continues. The principal charity that we support is Action on Elder Abuse. This year a number of fundraising events were run throughout the Company in support of the charity including the "kidnap for ransom" of the Group Operations Director! This event raised £9,400 from staff, suppliers and partner organisations. In addition, our care centres raised funds from a variety of fundraising activities which totalled £34,263. These funds were matched by the Company resulting in a total donation of £87,326 being made.
In many other ways we encourage community involvement. Groups regularly visit our care centres from the community to provide entertainment or just to spend time with our service users so they do not become isolated from the wider world. Regular trips out to the community are also organised by care centre staff using the company's fleet of mini-buses.
Workplace
Southern Cross appreciates that its performance is affected by the way it manages its employees. It can be seen from elsewhere in this report that our staff are our most significant resource - we are a people oriented business: we rely on our staff to deliver our vision of care to our service users. Ultimately our ability to enhance and sustain shareholder value relies on our effectiveness in recruiting, managing and developing our staff.
At the end of September 2007 the Company had 41,344, full and part-time, employees. 83.8% (2006 - 82.5%) of our workforce were female, while 8.2% (2006 - 10%) of our workforce were non-EU nationals. The average age of employees was 39 years.
We operate an equal opportunities policy to ensure there is no discrimination against applicants on the grounds of age, gender, disability, religion, sexual orientation, and race, or for any other reason. We live in an increasingly diverse world and therefore it is imperative that our recruitment policy reflects this. Understanding and valuing diversity allows us to meet the needs of our service users more effectively and therefore equal opportunities for all are embedded in our principles and practices.
The successful recruitment of the correct calibre of staff in terms of qualifications, aptitude and attitude is essential to our success.
We recruit using many different mediums including staff introductions and overseas recruitment. Southern Cross has formed a partnership with the Royal College of Nursing in a special project aimed at internationally recruited nurses. The objective of the project is to enhance the opportunities and potential for development for such staff. All newly recruited staff undertake an induction programme designed to familiarise them with their workplace, their new colleagues and our working practices.
Equally important is the retention of staff. We strive to ensure that all staff are appropriately remunerated. Salaries and rates of pay are reviewed annually. All staff have access to the Company benefits' scheme which provides a range of special offers and discounts on, for example, holidays, health club membership, car purchase and hire schemes, cinema visits and insurance services.
The provision of the correct facilities and adequate care equipment levels is crucial in the achievement of our aims; however, equally important is a comprehensive system of staff training. The Company has set it itself the objective of having all care centre managers enrolled in the Registered Managers award scheme. Care centre staff are also enrolled in a training programme and work towards the NVQ level 2 qualification. Currently 52% of managers and 55% of other care staff have achieved their qualification. In addition to this, specific health and safety and fire training is conducted on a regular basis.
Other training is routinely delivered within the homes by home managers and our dedicated training department. This includes comprehensive induction training and statutory moving and handling training. During the year the Group invested £4.8m in staff training.
In a further effort to ensure our staff are kept up to date the Group regularly communicates with them in a variety of ways. As well as direct communication, the Group regularly publishes updates to its polices on its intranet. A quarterly newsletter is produced and circulated to all homes as is the weekly briefing which includes (as well as news articles) urgent health and safety and policy matter updates.
In June 2007, Southern Cross joined other leading UK companies to sign the Skills Pledge. This is a public commitment by the Company to support all of our employees in developing their basic skills, including literacy and numeracy and work towards relevant and valuable qualifications. With the Skills Pledge and support from the "Train to Gain" programme we have now accelerated our vocational training programme for ancillary and support staff.
In addition we run an active Talent Management programme whereby we identify individuals within the Company who have the potential to make a significant contribution to its future success. These individuals receive ongoing coaching and development to ensure they reach their full potential and are central to our succession planning.
Staff performance is also monitored and appraised in such a way that staff regularly receive constructive feedback through supervision.
The calibre of our staff is recognised throughout the sector. Ten members of staff reached the finals of the Scottish Care Awards, four the Welsh Care Forum Awards and three the Care Awards. Recruiting and retaining such people is crucial to the success of the Company.
Health and Safety
A key area of concern to the Company is the safety of its employees and of its service users. Our ultimate aim is to achieve an injury free working environment. The Chief Executive has overall responsibility for the health, safety and welfare of both the staff and service users. The Company has a comprehensive written health and safety policy. Operationally the responsibility for implementing the policy falls to the Group Operations Director, John Murphy.
Performance is measured and the Senior Executive Team ("SET"), comprising the Group Operations Director, Managing Directors and other departmental heads monitor the performance by way of a system of regular audits. The Group operates a Health and Safety committee which meets quarterly and which reports to the SET.
We seek to promote a positive attitude to health and safety and, where accidents do occur, to learn from them in order to help prevent recurrence.
Southern Cross encourages participation in its affairs in a variety of ways, including regular team meetings and membership of trade unions. A weekly staff newsletter is produced to keep staff informed of current events. Employee suggestions are welcomed and are often used to inform future policy.
Harassment, bullying or any form of intimidation of our employees, clients, customers or suppliers is not acceptable or tolerated at Southern Cross. We are committed to providing a safe, secure and attractive environment for both our service users and our staff. Our employee assistance line is available to all of our staff and their families to offer them advice on stress related issues 24 hours a day.
Environment
The Company has, where possible, continued working in this crucial area both to reduce the impact of our business on the environment and to achieve savings in operating costs.
Acting on reports previously prepared by The Carbon Trust, we have continued to look at ways in which we can reduce our carbon footprint. The Group has estimated that, based on the number of homes currently in the Group, its annual environmental impact is 118,000 tonnes of carbon dioxide. The roll-out of smart metering that was previously reported has been completed. In addition the Company tested the effectiveness of retro-fitting control systems to our gas boilers at ten locations. Energy savings of up to 25% can be achieved using this equipment. Following the successful evaluation of the control equipment by the Company we are planning to install the equipment at the 50 homes with the highest utilisation of gas. This process began in September 2007. It is planned to complete this stage of the project by the end of December 2007. Thereafter an ongoing programme will be implemented, again tackling the highest gas-consuming homes first.
The Group continues to expand through the development of new sites. Care is taken at the design and planning stage to build in as many energy efficiency measures as possible. Where possible, construction elements, such as timber frames, are manufactured off-site, thereby reducing energy usage and waste. We also try to procure elements which utilise renewable sources or which minimise energy usage both in manufacture and during their operational life. The current generation of homes is developed, for example, using factory manufactured en suite bathroom pods. We are also installing a water purification system which allows hot water to be heated and circulated at 10 degrees lower than normal along with an ozone dosing system in the laundry which allows clinically clean washing at temperatures around 20 degrees as opposed to 60 degrees or more. Other building techniques that are being used presently include; heat recovery on ventilation systems, increased insulation in the superstructure and rainwater harvesting systems. As a further step in producing more energy efficient homes, the next generation of homes may include air source heat pumps and solar preheat panels.
The effective disposal of waste presents a real challenge to all businesses. New regulations now require greater attention to the sorting of waste prior to disposal. It is estimated that the Company produces 13,313 tonnes of landfill waste per year. In addition a significant amount of clinical waste is also produced (estimated at 12,651 tonnes per year). Currently we are endeavouring to increase the proportion of waste that can be recycled while enabling more waste to be incinerated. It is clear that with increasing landfill duty and other disposal costs there are clear financial as well as environmental incentives to reduce waste. All practical and easily implemented measures are adopted, such as using recyclable products for our copiers and printers and recycling waste cooking oil from our kitchens. The variety of initiatives we have put in place reflects the scope of our business; however the Company does intend to focus on this area in the coming year in order that we can make progress in our waste handling.
Marketplace
At Southern Cross we wish to differentiate ourselves by the quality of service provided to our service users and their families. The ability to compete in this increasingly regulated marketplace is dependent on many factors - but first amongst these is the quality of care we deliver.
As part of our dedication to delivering the very highest standards of care, we are committed to all our care centres being accredited to ISO 9001 standards. We now have 175 care centres certified as ISO 9001 compliant. It is anticipated that by 31 December this year a further 22 care centres will have been accredited.
Our service users' needs are central to the services we provide. During the year the Group purchased a PC based nutritional system, "Nutmeg". This system, used to develop nutritionally balanced menus, has been installed in all homes. We actively look for service users' feedback and conduct regular surveys to ensure we incorporate their views when defining our service.
The Group maintains a website aimed at prospective services users and their families, potential employees, investors and other stakeholders. This site is regularly updated with information about new homes and other developments within the Group.
An important part of our drive to achieve excellence is the selection of our business partners. It is essential that our suppliers adhere to our business ethos in terms of the delivery of care. We seek to work with our suppliers to ensure that not only do they deliver competitive products and services but also that they can be relied upon to deliver first class products and quality service. In return we commit to adhere to their terms of business. Our supplier payment cycle is 50 days (2006 - 45 days). At all times we try to develop long-term relationships with suppliers.
Professional Ethics
Our philosophy of care is to provide the highest standard of person specific care to both older people and younger people with special needs. To give them the opportunity to enhance their lives by providing a safe and comfortable environment, as well as support and stimulation to help them maximise their potential with regard to their physical, intellectual, emotional and social capacity. Our core values of privacy, dignity, independence, choice, rights and fulfilment are central to this philosophy. This philosophy is supported by the Southern Cross Practice, Ethics, Education and Research Review Group.
The objective of the Group is to ensure that all research and procedures operate under and maintain the highest standards of ethics. The protection of our service users' human rights remains paramount.
Employees' Corporate Responsibility
The commitment of our staff to the delivery of our care objectives is second to none. We seek to encourage such commitment and to recognise it through our Care Awards scheme. The awards are structured to recognise and reward achievement across a number of categories at both regional and national level. The awards are presented at an annual gala dinner. It is open to service users, service users' families or their own colleagues to nominate employees for an award.