THE crisis facing the country’s biggest care home company was caused by “scandalous financial engineering”, a union said.

The criticism came yesterday from the GMB, which called on the Government to appoint a minister to oversee the future of staff and residents at care homes run by Darlington- based Southern Cross.

The company, which is responsible for the care of 31,000 elderly people, is fighting for its survival in the face of rocketing rents and falling incomes.

In a 61-page dossier, The Cross We Have To Bear – The Greedy And The Gullible, the GMB said that major UK and US financial institutions were involved in buying into Southern Cross’ sale and leaseback business model, which had now failed.

The union claimed that rents for its 750 care homes were £100m higher than they should be.

The dossier also complained of a lack of transparency over who owned the care homes, adding that more was known about the mafia than about the antics of private equity companies.

The former Labour government was accused of being blind to, or encouraging, the “machinations and dealings of the private equity industry, the banks and the bond market which gave rise to the crisis in Southern Cross and the private care home industry”.

The dossier said: ‘‘The kings of private equity in secret, hidden from the press and the public, perpetrated ravages on the British economy and British jobs.”

It added: ‘‘What is really galling is that many of those who organised the mess that is the care sector in private hands are still in senior jobs in the City employed as highly-paid financial experts.

“We need to expose the reality that they are either greedy pigs or gullible fools.”

An emergency debate at the union’s annual conference in Brighton ended with a call on the Government to appoint a cabinet minister to help secure the future of staff and residents at Southern Cross.

The union said it was time for a different social care model for looking after the elderly and vulnerable.

Southern Cross has denied claims that as many as 200 of its care homes could be sacrificed as the company battles to survive.