TV review by Mark Langabeer, Hastings and Rye Labour Member.
This week’s Panorama programme was aptly named: Social Care, Follow the Money, because it revealed the way that what is supposed to be a public ‘service’, mainly for the elderly, is being looted by the private sector.
The Panorama reporter, Alison Holt, investigated the crises within the social care system, interviewing families who found that the care provided in homes for their loved ones was wholly inadequate. One son commented that his father had old his home and was paying over £1,000 a week to a care home run by the largest provider in the UK, HC-One. In total, the cost paid for his care was an astonishing £125,000. The son reported that following his father’s death in hospital, the only communication he received from the care provider, was an increase in the weekly fee!
There were many other examples given by families of the poor care that was given by the providers. The question is, where do the fees actually go to? Holt reports that the three the biggest companies, Four Seasons, HC-Care and Care UK are or have been owned by private equity companies. Holt interviewed a former investor in Four Seasons, who said who regarded a 30% rate of profit from the investment as “poor”. He went on to say that there was little profit in care homes because of the financial crash in 2008 which resulted in austerity measures.
Maximising profit and minimising tax
The financial and company structure of Four Seasons was shown by the programme to be ludicrously complicated, involving around 160 companies (see chart left) and the reason for this is clearly to minimise taxation and maximise profits, hence their being based in the Cayman Islands.
Holt reported that the Tax Justice Group had discovered that the HC-One group paid out £4.8m in dividends, even while they were asking for financial support from local and national government during the pandemic. These companies have largely been bought with borrowed money and so, being saddled with massive debts, they have to pay large amounts in interest payments.
The programme produced a pie chart (below) which showed that for the running costs of one home, Ashton View, 20% goes to paying debt. What this means is that finance companies, with interest rates well above the basic rate, are also fleecing the service. It is a business model that in the long term is unsustainable without public money to rescue it, but in the short and medium term offers lucrative profits to the private sector.
Even Jeremy Hunt, a former Tory Health Minister, described the care sector as being like the “Wild West” and, repeating the expression used by a former Tory Prime Minister, during a financial scandal in the early 1970s, referred to it as the “unacceptable face of capitalism” …as if there was a benign and “acceptable” version on offer. Yet despite all this, the current Government are only prepared, at some future date, to allocate £5.4 billion of extra funding to the care home sector.
During the programme, a former senior care home assistant commented that in her opinion, care of the most vulnerable is incompatible with the profit motive. Jeremy Hunt doesn’t challenge the fundamental idea of the private ownership of care provision, only its “excesses”, but the market system operates through a relentless and invariable code, which says the bigger the profit, the better.
Social care was well run in the past by local authorities
The private equity investor who was interviewed also claimed that the private sector is more ‘efficient’ than the public sector, but there’s not a shred of evidence to support this view. Care of the infirm and the elderly was carried on perfectly well in the past by local authority care homes, in conjunction with the NHS, including geriatric services. It was hived off to the private sector, not to make it more efficient, but to allow it to be milked for private gain.
Last month the Tories pushed through new measures to deal with social care, although with a reduced majority because of a minor Tory rebelling in the House of Commons. Starting in October 2023, the new plans mean that only those with total assets of £20,000 or under will avoid contributing to in-house care or staying in a care home. Anyone with assets of more than £100,000 will be made to pay for everything, up to a cap of £86,000. And it will mean having to sell your home from under you. Those with between £20,000 and £100,000 can apply for help from their council. However, they will also eventually have to pay up to the £86,000 cap themselves as well.
For a pensioner sitting in a million-pound mansion, losing £86,000 is no big deal. But for those living in low-income, low-house-value areas, that cap is likely to blow a huge hole in the value of a person’s assets. However, there is another fly in the ointment: the £86,000 cap cannot include the cost of accommodation and food in a care home…only actual care. So, in effect, assets of well over that amount may have to be used up.
Rich pensioners will not feel much of a squeeze
In effect, the new measures are a means of getting the elderly to pay for their own care, with the balance tilted in such a way that the very well off will not feel much of a squeeze, while the not so well off will have their assets plundered. It means for most that after a life-time of work and paying taxes, they will be left with £20,000 at the most. Meanwhile, the privatised care home companies, incorporated in tax havens, will be laughing all the way to the bank. Under this ‘marketised’ system social care is simply another mechanism to shift wealth from the poor to the rich.
The Labour Party, in my opinion, should be campaigning for the return of all the care home providers to local authority ownership, to be managed by the local communities in the interests of all and in collaboration with NHS services. The huge debts of these homes – taken out as part of the speculation and looting of the system – should be cancelled.
One of the most important issues – and perhaps the most important at present – was not covered in this documentary: a dire shortage of staff. The overwork and absences of care staff is often behind some of the neglect and poor care mentioned in this programme. Abysmally poor wages and intolerable demands made on staff are the principal reasons for the chronic shortage of workers in this sector. I have even received letters in the post, asking people to apply for a job in the care sector. Care work should be treated as skilled work and paid accordingly. That must be the task of the next Labour Government.
The Panorama programme was good, and worth watching – perhaps with a groups of Labour Party members, to initiate a political discussion – but it really only skimmed the surface of a service seriously failing our elderly. It can still be found on BBC i-player, here.
