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Think tanks calls for curbs on private care provision

September 20, 2019

A national think tank, the Institute of Public Policy Research (IPPR) has published a report which calls for the state to build and operate new residential care homes, and establish a new financial regulator, ‘OfCare’ to oversee private providers.

The report, published in mid-September, said that almost one fifth of all social care provision was provided by the five largest providers, of which four – one more than in 2016 – are owned by private equity firms.

“This growing ‘financialisation’ of the sector has seen these organisations rely on high borrowing, complex corporate structures and cost-cutting measures such as tax avoidance and low staff pay, which makes them potentially unstable, with two of the big five providers going into administration in recent years – Southern Cross in 2011 and Four Seasons in 2019,” the report says.

IPPR lists three factors that can lead to lower quality care from private providers, especially those backed by private equity:

Workforce: IPPR says previous research had found strong evidence that private providers employed fewer staff, offered lower pay and less training, and suffered higher turnover, driven by a business model that prioritises shareholder value over the quality of service provided to the taxpayer.

Instability: Three quarters of local authorities reported that they had experienced care providers shutting down during the past year (2019-19), up from two thirds the year before, according to ADASS (the Association of Directors of Adult Social Services). This is partly because of downward pressure on fees local authorities can afford to pay, but IPPR says it also reflects growing reliance on debt within the sector.

Size: IPPR says the smaller the care home, the more likely it is to provide good care. Some 89% of small residential or nursing homes are rated as good or outstanding by the CQC, compared with 65% of larger nursing homes and 72% of large residential homes. Yet the share of beds in small care homes has fallen in 91 per cent of local areas since 2015,with only 25 per cent of beds now in such homes.

Harry Quilter-Pinner, senior research fellow at IPPR and lead author of the report, said radical reform was needed in who provides care and how they do this.

“Over the last few decades care the state has handed over the responsibility for care to the private sector,” said Mr Quilter-Pinner.

“Too often these firms put profits before people. That’s why we need a new financial care regulator to ensure better monitoring of care providers’ financial health, and a commitment from the Government to increase the share of residential care directly provided by the state, partly through borrowing to build the care homes of the future. It’s time to end the care home crisis.”

Care England, which represents independent care providers was quick to respond, tweeting on the day the report was released: “Absurd suggestion to nationalise care. This would cost eye watering amount of money and there is no evidence showing that state run care homes deliver better quality, they are often more expensive. Citizens need choice and quality care.”

One Reply to “Think tanks calls for curbs on private care provision”

  1. I wonder, did the Care England spokesperson actually read the IPPR report before they fired off their incendiary tweet? Somehow I doubt it. The report describes the prospect of nationalisation as “practically challenging”, “exceedingly complex” and “very costly” and concludes that “the wholesale nationalisation of existing residential care providers” would be “unrealistic”. In future, probably best to look before they leap.

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