Social care is up against the profiteers

By Stuart Carter

Three quarters of us will need some form of social care during our lifetime. In September the government claimed they were tackling the crisis in social care, by increasing National Insurance contributions by 1.25 % from 1st April 2022, thereby raising an extra £12 billion a year. They also made some changes to the thresholds for receiving free social care or having to make contributions to your social care.

Governments have been talking about social care reform for the past 20 years but have done next to nothing. The Dilnot report, commissioned by the coalition government in 2011, made some proposals similar to the present ones but more generous and far-reaching – but it was quietly ignored.

Successive governments have buried their heads in the sand.

Meanwhile cutbacks, especially in local authority budgets, have seen spending per person on social care drop 7.5% in real terms in the decade up to 2019/20. Progressive privatisation, that began in the 1970s, has resulted in 90% of social care now being delivered by the private and independent sector.

Increasingly, healthcare is viewed as a commodity to be bought and sold on the market, that is controlled by private companies seeking profit.

The graph shows the number of deaths of care home residents in England and Wales, each week between 14 March 2020 and 2 April 2021. The dark blue columns are deaths from Covid-19, the light blue, deaths from all other causes. The Office for National Statistics published the graph, and commented: “The sharpest rise in Covid-19 deaths occurred in wave one, but overall a higher proportion of deaths involved Covid-19 in wave two.” Please see the ONS web site for more details

Council-run care homes and council-employed home helps are things of the past. However the COVID pandemic, which has killed 40,000 nursing and care home residents, has focused public attention on the state of social care.

Social care workers

One and a half million people work in the social care sector providing residential or home care. The average wage is £9.50 an hour and the majority of workers are on the minimum wage. There is no standardisation of training, terms and conditions are poor and there is a very low level of union organisation.

There is a great deal of instability, with many care homes going bust each year or being taken over by bigger companies. In home care, the workers are given limits on time they can spend with each client and many don’t get paid for their travel time between visits.

It isn’t surprising that there are 160,000 job vacancies in the sector, a situation made worse by Brexit. The staff that have stayed in the sector are overworked and frustrated by not being able to give the level of care that is needed and that they would like to provide.

Strike actions have broken out in some care homes – such as the SAGE  care home in North London, where staff organised by the United Voices of the World union won a substantial pay rise, under the slogan “Quality Pay for Quality Care”.

About 1.6 million people are waiting for a care needs assessment by their local authority. There are an estimated 8 million unpaid carers in the UK. These are family members, neighbours and friends who are filling the gaps in provision. Most are women and some are older children. Many carers suffer from stress and isolation and have low incomes because their work options are limited.

Not just the elderly

It’s worth noting at this point that social care is not just about the elderly. Half of all spending on social care goes on adults of working age, those who have mental or physical disabilities, special needs or severe and chronic health conditions.

The ‘market’ (as they call it) in residential and non-residential care for people with learning disabilities had a turnover of £8.6 billion in 2012/13. Cuts to local authority funding has forced them to go to cheaper independent sector providers.

Services in the community such as clubs, day centres and sheltered work and training provision have shrunk and without these carers find it hard to cope. So there is more reliance on more expensive residential care where there has been an increase in the use of seclusion and restraint and an increased use of medication.

Research commissioned by NHS England in 2015 found that:

There is a much higher rate of prescribing of medication associated with mental illness amongst people with learning disabilities than the general population, often more than one medicine in the same class, and in the majority of cases with no clear justification. Medicines are often used for long periods without review. There is poor communication with parents and carers, and between different care providers.

In 2011 the scandal at Winterbourne View private hospital where a nurse secretly filmed residents being mistreated and abused by staff prompted a Care Quality Commission review of residential care in England for people with learning disabilities. The CQC reported that standards were generally poor and that in terms of quality of care and length of stay NHS provision was better than private.

According to the Kings Fund, government austerity resulted in a £700 million drop in spending on adult care from 2010 to 2018, while the costs of care rose by 6.6% between 2015 and 2019.

COVID has exacerbated the situation as care homes faced extra costs and lost revenue due to deaths. It is estimated that a quarter of care homes are facing bankruptcy. In 2019, two care homes closed for every one that opened.

The privateers

There are about 17,600 care homes in the UK, and 5,500 providers. The five largest operators provide 15% of the beds. Some charities run care homes, and there are still many small providers and some family-run care homes struggling to survive. But over recent years, many such providers have been bought out by bigger operators, and there are constant mergers and acquisitions. Let’s look at the Big Five.

□ HC–One has 350 care homes and 20,700 beds, and are owned by private equity firms Skyfall Capital (a real estate fund registered in the Cayman Islands), and Sanafad (who have offices in New York and Dubai).

□ Second biggest is Four Seasons, rescued from liquidation in 2017 by private equity firm Terrafirma. It has 300 care homes and 37 specialist mental health units.

□ Third is Barchester, another private equity-owned firm, with 200 homes and seven hospitals employing 15,000 staff. They are owned by Grove Ltd, an investment company based in Jersey.

□ Fourth is BUPA who have 130 homes. The company is run for profit, but claims to be under a not-for-profit parent company.

□ Fifth is Care UK, which has 120 homes. This is a publicly listed company whose majority shareholder is Bridgepoint Capital.

Private equity firms are in the business of making short-term gains for their investors, and as such are not suited to healthcare. Most are not interested in healthcare but just use borrowing to buy the land and buildings, and lease them back to the home operators, charging them rent from which they service their debt and reward their investors.

They are leaching money out of the system which should be being spent on people’s care.

A good example are the owners of MGM studios, Anchorage Capital, who have recently entered the residential care market.

The government’s proposals raise money to pay for social care but the overriding issue is how it should be provided. The proposals do nothing to reform a failing system of provision: they just prop up a failing market for a bit longer.

Lee Humber, in his book Vital Signs: The Deadly Costs of Health Inequality sums this up:

The shortage of available beds in the care sector has a knock on effect on hospitals which are increasingly forced to retain patients who would otherwise be discharged. This ‘bed-blocking’ crisis is an expression of the broader problems in the social care sector, and a direct consequence of the marketisation of services. Buy outs, bond issues, refinancing and other corporate and ownership strategies make the residential care sector very difficult for local authorities to monitor and control, even if they wanted to. Left to the anarchy of the market, with no central body overseeing and planning provision, with a plethora of independent sector organisations competing for scarce resources and needing to make a profit from them, with their buildings rented from multinational corporate conglomerates beyond the reach of local control, the system bumps along in crisis mode and will continue to do so until radical solutions are found.

Who pays

The other deceptive claim in the government’s proposals is that they are going to prevent people having to use up their savings or sell their homes to pay for social care when they get older.

Average care home costs for residents are £35,000 a year. At the moment, if you have capital of more than £23,250, you must pay the full costs. If you have less than this amount you may pay a proportion of the costs depending on your income. For residential care, the value of your home will be counted towards your assets, unless your partner or spouse is still living there.

The new proposals are that you will only pay the full costs of your care if you have assets, including your property, of more than £100,000. If you have assets between £20,000 and £100,000, you will pay a proportion of care costs according to a sliding scale.

There will be a lifetime cap, so that once you have paid £86,000 towards the costs of your care, any future care will be free. However the average stay in residential care before dying is two and a half years so, even if they pay the average residential care costs of £36,000 a year, most people won’t reach the £86,000 cap. Currently, 850,000 people get some help towards the costs of their care, and the government’s proposals will result in only another 150,000 receiving extra financial help.

The way care needs are assessed is also a major problem with the current system. Anyone needing social care has to request a care needs assessment by a local authority department. At present, 1.6 million people are waiting to be assessed by a social worker. Social work is another area where there are increasing pressures on staff and thousands of unfilled vacancies.

Once care needs have been identified, then a means test is done to decide how much the local authority will contribute. Councils across the country have different rates for how much they will pay per hour of home care or per week of residential care. If families or individuals want better or more convenient provision which costs more then they must pay the difference.

The Homecare Association, which represents domiciliary care providers, estimates that the average cost of providing care in a person’s home is £20 per hour. The average paid by local authorities across the UK is £18.40 an hour. As they point out, this inevitably puts downward pressure on wages.

The same problem affects residential care. The rates set by councils cover only the costs of care, but not living expenses such as meals.

In conclusion, the latest proposals by the government are not a serious attempt to reform the way social care is paid for or provided.

Even where the market model breaks down, and fails to provide adequate care, the government persists in trying to prop it up, causing continuing suffering to those needing care, and to the workers and family members who provide it.

To build a national care service, or to integrate social care with the National Health Service, would mean challenging the capitalist market and the private ownership of care homes and care services.  

Stuart Carter is a mental health worker and long-time union activist.

This article also appears at peoplenature.org. here

Image: One of the Sage care home workers who, by taking industrial action, have won a substantial pay rise. Photo from the UVW website

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