THE real losers in the ongoing financial crisis at Southern Cross are the 31,000 residents in its 750 care homes.

Although the Darlington-based group has been grappling with falling income, rising rents and higher costs for some time, the Government has just woken up to the potential fallout should it go out of business.

After months of turning a blind eye – when anxious local authorities feared they would have to pick up the pieces if the worst came to the worst – David Cameron stepped in with a guarantee no one will lose out if the firm collapses.

As with banks, so it is with care homes: some public services are just too big to fail.

But what can the Government actually do? Short of privatising Southern Cross – surely a non-starter – even the prime minister is limited to cheerleading from the sidelines.

The group’s fate will be decided when negotiations with its landlords reach a conclusion.

So far Jamie Buchan, the company’s chief executive, has played a blinder.

Bulldozing through a 30 per cent rent reduction was a calculated gamble that could well pay off. It has given the company time to take stock and reorganise.

However, Southern Cross is walking a tightrope between success and financial disaster. If any of its landlords loses patience and puts the group into administration then the game is up.

All the while thousands of elderly and vulnerable residents are left to wonder where it will all end.