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Commentators discuss if care homes can be run by the private sector. It comes after the UK's biggest care provider Southern Cross, which has 31,000 residents, is asking its landlords to reduce their rent so they can avoid insolvency.

• Q&A: Care home closures

how Southern Cross got themselves into the mess:

"With Blackstone's backing, the nursing home operator embarked on an acquisition spree, buying up packages of nursing homes, selling on the freehold property and locking in cheap loans to pay the rent.
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"With the property sale proceeds more often than not covering the cost of buying the whole business, Southern Cross effectively got the operating company for 'free'. This meant its care home portfolio grew to 750 within months of its stock market float.
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"The business model was known as 'sale and leaseback', or 'opco/propco', because of the separation of the operational business from the care homes. It appeared to work smoothly as Britain's economy grew. However, when the credit crisis struck, Southern Cross suddenly found buyers for its property harder to find."

Southern Cross's owners - private equity firm Blackstone.

"Private-equity players believed the residential care business was tailor-made for their money-making technique of borrowing heavily to buy businesses, subjecting them to some financial engineering, then offloading them at a hefty profit a few years later.
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"Blackstone did just that.
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"But when private-equity firms entered the care market, no one stopped to ask whether the human stakes were too high, or whether the ruthless, dog-eat-dog values of the City were remotely compatible with the care of our oldest and most vulnerable people."

that care homes have quietly taken over but during the "quiet revolution in social care" no provision was made for market failure:

"With Southern Cross teetering on the brink, local authorities have been left to work out their own emergency plans for safeguarding the company's residents - both the majority who are state-funded and others who pay their own fees - in the event of the company's collapse or any home closures.
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"Such emergency planning is easier said than done. Many local authorities no longer have any homes of their own; most have no more than a handful. Few authorities will retain the expertise necessary to go in and take over the management of homes if Southern Cross ceases to trade."

Southern Cross's problems to argue there are some social activities which are inherently uneconomic and the risks and rewards to the taxpayer need to be rebalanced:

"As with the banks, so with care homes: some private enterprises are just too important to fail. Gordon Brown had to promise bank depositors their money was safe; now David Cameron has to make a similar promise to the residents of Southern Cross. Profits to shareholders in the good times; losses sent to the taxpayer in bad. The parallels are powerful.
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"There could be many more Southern Crosses. The firm's troubles are a timely reminder, as the Coalition Government plans to push private finance initiatives and outsourcing deeper and deeper into core public services - schools, housing and heath. Reforms to the NHS will shift the private sector's frontier ever closer to clinical care. Southern Cross highlights what happens if things go wrong."

The a stronger regulator of care homes:

"Private care providers seeking to maximise profits are tempted to cut back on the spending needed to provide the best possible care for those vulnerable people in their charge.
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"Given this temptation, a strong regulator, capable of improving standards and protecting the public, is essential. The CQC has the power to close down failing care homes but given the trauma that relocation causes ill and frail occupants, this option can be used only in extremis. That makes it crucial to identify struggling care homes before they fail. The best way to do this is for the regulator to inspect them regularly and publish the results prominently. To do this, the CQC will need greater resources than it has."