How they messed up Social Care
When it was revealed that 40% of all recorded deaths from coronavirus were recorded in care homes, it was clear that something was going horribly wrong. Our ‘care’ system had become a killing field. In fact the crisis in social care is longstanding. It just took the pandemic to tease it out.
Back in the day care homes were mainly run by the NHS. On coming to power Margaret Thatcher chose to privatise social care. Her government provided a bribe to private care homes by giving the full cost of care to those on low incomes – but only to private providers. Greed drew in an explosion of private care homes. At present 85% are privately owned and run.
Realising that owning a care home was a license to print money, small private care homes were quickly elbowed aside or incorporated into financial empires. These outfits resorted to the same sort of rackets as other privateers, such as the water companies. They are often based in overseas tax havens and load the company with debt. They use the debt to offset the profits they are really making in order to dodge tax.
The other way they make money is by screwing down the wages and conditions of the staff. Many are on zero hours contracts and some work for agencies. They flit from home to home which, given the stupidity and incompetence of the government in not delivering test and tracing and Personal Protective Equipment (PPE), massively increased the number of excess deaths from Covid-19. For the private owners providing care for the elderly and other residents is the last thing on their mind. Profit comes first.
This consequences of this system were exemplified by the collapse of Southern Cross in 2011. The firm had been acquired by the US hedge fund Blackstone in 2004. One of the scams Southern Cross operated was selling the homes and then leasing back the property. At its height Southern Cross ran 750 homes with 37,000 beds. Its share price peaked at £1.1bn in 2008 - and then collapsed to practically nothing. The empire finally came unstuck as a result of the financial crisis of 2008. Management was more interested in financial engineering than providing a vital service.
The closure of homes is always a disaster for those who have come to treat the place as their home, and a death sentence for the most vulnerable. There were 19 unexplained deaths in one of Southern Cross’s homes – Orchid View – just one part of the tragedy.
Of course Thatcher’s bribe to the private sector proved very expensive. As the cost of social care swelled, local authority finance was gripped by a relentless squeeze. Councils, now on the verge of bankruptcy because of the pandemic, currently spend £22.2bn on social care which is £300m less than in 2010 in real terms. Even the more sensible Tories realise that this is a broken business model.
But how to mend social care? As soon as any proposal is put forward the Tory press starts yelling about a ‘death tax’. Their preoccupation is about the fear of care recipients having to sell their house to pay the care bill and their inability to pass the money on to potential heirs, not about the pressing need to provide adequate social care. Typical.
Indeed it is estimated that for one in 10 over 65s it will cost more than £100,000 for lifetime care – completely unaffordable for most. So there is deadlock. The Tories have been in office for ten years of crisis in social care and come up with nothing. A former senior civil servant Sally Warren told the King’s Fund that she had drafted Green Papers and White Papers and even legislation, but “not one reform has ever been implemented.” There have been 12 formal consultations on social care since 1999!
Health and social care are umbilically linked. Patients are often released from hospital to a care home, or to their own home to receive care there. In March the Tories released 25,000 from hospital to care homes – without testing for the virus. Criminal stupidity!
It is self-evident that the two services should be administered as one integrated package. But in Britain health care is provided by the NHS free at the point of use while social care is means tested. So if you have cancer the NHS treats you for free. If someone contracts dementia they usually have to pay through the nose for social care. Only those who can’t afford the bill are paid for by the local authority, cross subsidised by the fees of the other residents. And it doesn’t come cheap. Residential care for the elderly can cost £623 to £726 per person per week and £1,320 for working age adults.
In Germany they impose compulsory insurance for social care, as they do for health care. In Britain health care is paid for from general taxation. Social care should be funded in the same way, but we need to make the rich pay. We believe social care should be provided free according to need, like the NHS.
Labour’s 2019 manifesto committed a future Labour government to provide free personal social care to over 65s. On top of those working in care homes there are nearly 630,000 care workers who visit people in their own home. Free personal care would often enable recipients to be looked after at home, avoiding the ‘hotel costs’ of care homes. Of course this is not always possible. Free personal care is already the case in Scotland. It would be a step forward, but it doesn’t go far enough.
The whole social care system is in crisis and urgently needs sorting out. The sector is still dominated by fat cats. For instance Care UK owns 113 homes with 8,000 beds. The biggest of the lot is HC-One with 329 care homes, 22,000 beds and a complex ownership structure, with ultimate owners tucked away in the Cayman Islands tax haven. The big boys have the worst record for passing on the infection in their homes. According to Private Eye (17-30 July 2020), “Large chains, such as HC-One Care Homes, lost 863 residents and three staff to Covid. HC-One Ltd made a £6.5m loss in 2018, yet paid £40m in rent to offshore firms and pays its chief executive £800,000 a year.”
Tory peer Ros Altmann declares, “Many of the largest operators are based offshore, apparently extracting profits of about 12% a year, while much of their £15bn annual income is remitted to owners who pay no UK taxes. A 2019 Centre for Health and the Public Interest study suggests 18 of the 26 biggest providers had corporate structures that separate the firm operating the home from the one owning the buildings, resulting in about £1.5bn ‘leakage’ in fees to pay interest, profit or rent.”
Her solution? Nationalise the care homes!
Altmann warns that looking after our 500,000 care home residents is now “a game of financial pass the parcel where hedge fund companies cash in on company debts... Unfortunately, the parcels are old people’s lives – there’s nothing to stop them in this system.”
This is a disgrace. Covid-19 has also been killing care workers as well as residents. If the care homes were nationalised we could start paying the care workers properly and professionalise their employment status as well as looking after their health. This is urgent. There’s a shortage of 120,000 workers in the sector.
Elderly people, and the working age adults that make up almost half of the social care effort, are not commodities. The value of their lives should not be measured against the profits of absentee shareholders. It’s high time that Labour caught up with the utterances of a Tory peer and demanded the nationalisation of the whole social care sector.
The care home owners have been criminally irresponsible. They chose profit over safety. On top of the health care crisis we have a catastrophic collapse in tax takings as a result of the economic crash. Should we compensate them? We can’t afford it. In 1833 the British Parliament finally abolished slavery. It then chose to compensate the slaveholders (not the slaves!) for their loss of property. We were still paying their descendants till 2015. Never again! The tax dodging menaces to public health should just be taken over.
Sign the Petition to Fully Fund Adult Social Care
Adult Social Care is facing a £10bn coronavirus funding shortfall putting disabled, frail and older people, and care workers at risk.
10 years of cuts and austerity means that Adult Social Care is drastically underfunded.
Local Councils have lost 60p in every £1 of government funding since 2010, and spending on adult social care is at a lower level than it was 10 years ago, despite greater demand.
Along with the NHS, Adult Social Care has borne the brunt of the current crisis. Care home deaths account for at least 40% of the UK Covid-19 fatalities. This consequence of government underfunding and its disregard for the care sector must not be ignored.
To deal with the immediate crisis, the sector needs guarantees from government on:
· regular testing for staff and service users
· secure supplies of PPE
· hospitals not discharging patients with COVID-19 into care homes
Rebuilding our care sector requires funding, so we call on the government to fulfil their promise to give councils “whatever is necessary” to tackle this pandemic.
We demand the government show that they value our care sector as much as we do by committing to fully fund adult social care during and after COVID-19.
