Social care in the UK is dire. In March 2022, 50% of care workers were on minimum wage or below minimum wage plus 59p an hour. 24% of them are on zero-hours contracts. In the lower pay grades, a majority are part-time, and so often doing more than one job.
They face having to do their best in an underfunded service that exploits and demoralises them. Precarious provision of care at unaffordable rates means that they often face abuse from service-users and their families. There is an acute labour shortage (165,000 vacancies) and high turnover (about 29% per year). The system exploits workers’ compassion for service-users to make up for cutting resources and time to do jobs.
Patients are forced to spend their entire life savings and sell their houses to pay for their care. When this money runs out, some are evicted, often without the capacity to understand why. In effect, this acts as an inheritance tax, and one that flows straight into the pockets of private companies. Despite the massive profits extracted from patients, service providers are not delivering proper care and support.
The system works badly for the elderly, and for working-age people in care as well.
Funding
A lack of government funding for care has opened a field for companies which see investment in the care industry as high-yield and low-risk. An ageing population means that there is a stable and rising demand for the service.
Companies that hold large stakes in front-line companies are called holding companies. Because of the low risk, holding companies take massive loans to acquire front-line care companies, knowing that they can repay them using profits from the acquired care company. Large multinational companies which can acquire the most funds for investment come to dominate.
HC-One, the UK’s largest care company, brands itself as the “kind care company”. It reports a turnover of £652.8 million in 2022, making a gross profit of £26.7 million but, it says, a loss after tax of £97.1 million. It plans to make good by selling off care homes.
The ultimate parent of its nested dolls of holding companies is headquartered in the Cayman Islands. The Centre for Health and Public Interests estimated in 2020 that it had debts worth £35,000 for each bed it owned.
To repay their borrowings, holding companies extract the revenue from the front-line companies that provide the care. 20% of weekly patient fees can leave the company to go on repayments, instead of being re-invested in the sector and patient care. The number is similar for most front-line service providers. To pay the holding companies, managers of front-line providers must pursue low-cost strategies that degrade the care received by patients.
Holding companies aim to increase the financial value of a front-line company, so they are able to sell to another holding company at a profit. High demand for care industry capital helps. So the new holding company has to take on even more debt to purchase the front-line company than the previous owner. Then even more funds are extracted from the front-line company, and its operations are reshaped until it can be sold again for even more profit.
The process extracts more and more value from front-line companies which provide an ever-deteriorating service. The costs are borne by service-users who see their lives cut short and workers burnt out trying to make up for a broken system.
The solution is an efficient, universal, and expansive publicly run care service. These privately run care homes under investors’ thumbs are forced to fail at their purpose, caring for patients. If failure descends into crisis, they know that the government will bail them out, as it did during the pandemic. As with the 2008 banking crisis, lots of bail-out money goes straight into investors’ pockets.
A workers’ government should not be afraid of the private companies to go bust, but rather seize the physical assets, pay the frontline workers, and prioritise patient care.
This situation could come about through a crisis, but we also need a national social care plan ready to make these radical steps. A publicly run social care system would provide better care to patients and treat workers better. It would be able to rationally plan, putting care homes in the places they are needed, within communities where people can stay close to their families. Greater resources would mean that workers would have greater autonomy in caring for their patients. Better conditions would mean a much lower rate of turnover, which would keep skills within the service. This would allow the system to provide high quality care. This is all done by removing the predatory extraction of debt finance.
Just nationalisation is not good enough. We need the socialisation of the care service. This means linking up care with health, providing a more comprehensive service than state-owned sites operating as silos. Social care provision must be part of a broader system of workers’ control that would operate through democratic structures which involve front-line workers in site and sector-wide planning.
Workers having more say will slow the deterioration of service-users, as workers know their service-users best. Workers’ experience would be essential in better and rational public planning, helping service-users longer in a fitter state, improving their autonomy and enjoyment of life.
We cannot allow care needs to continue being exploited by private companies. Socialisation of the care industry would be in the interests of workers, service-users, and their families. The fight for a humane care system must start with care workers themselves organising and fighting through their unions to assert the demand for a socialised care service.