Predatory financing of care homes has led to the sector being stripped to the bones in the name of profit

Predatory financing of the care sector is also driving poor outcomes for workers and service users.

A care worker holding the hand of a patient

Predatory financing of the care sector is not only a concern for the long-run economic stability of the sector; it is also driving poor outcomes for workers and service users today.

In January 2022, Lord Syed Kamall gave a very familiar answer in the House of Lords when asked about the dangers of private equity firms operating in the social care sector: “The most important thing is the quality of care”. At that point, our team had already been speaking to care workers for months about the impacts that investment firms were having on quality of care and working conditions in care homes up and down the country.

On Wednesday of this week, we released our findings in a new report – Held to Ransom – launched by researchers at the Centre for the Understanding of Sustainability Prosperity and Trinava Consulting, in collaboration with UNISON. We now have a response to Lord Kamall and others who are under the impression that the financial architecture of the sector is irrelevant as long as care standards are not affected: predatory financing is having a highly detrimental impact on care.

Historically, a paucity of available data in the UK has made it very difficult to assess the claim that investment firms are not having an impact on care quality and working conditions. And thanks to the highly precarious status of most care workers, many are reluctant to speak out publicly. Through a series of anonymous interviews, this report lifts the veil on an issue that has, until now, been largely obscured.

Sarah (who’s name we changed for anonymity) works as a care assistant in a residential home for older adults. She told us how she will often pick up extra shifts when the care home needs it.

“I’m one of them that always helps with staffing, because we don’t have staff… when they ring, I feel bad to say ‘no’.”—Sarah

Her care home was taken over by an investment firm in 2017, at which point she noticed some striking changes. In addition to chronic understaffing, her employer was enacting deep cuts to basic care supplies, like sanitary products.

“Even pads, they would tell us ‘We are on a budget. You have to use one pad a day’.”—Sarah

This was a story that came up time and time again as a core theme of our interviews. Laura told us about the fatal rationing of surgical masks. Jennifer told us that residents were going to bed hungry and agitated because there wasn’t enough food for them: “they’re not sleeping properly because they’re hungry”.

Many care workers explained that the terrible conditions in their care home were being hidden from the regulator by putting extra staff on shift to “make it look busy” (Michael), or by removing outspoken staff from rota when the CQC came to inspect. Sarah was even asked to cover up the problems in her care home by lying on paperwork to hide the fact that understaffing was causing carers to have to “skip some stuff”, like regularly turning residents to avoid bed sores. By coercing staff into covering up the aspects of care provision that are falling short of the expected standard, these conditions are being enabled to continue.

But here’s the real kicker – whilst all of this is going on, directors in these investment-firm-owned care homes have been getting wealthier, with average directors’ pay increasing relative to care worker pay at an alarming rate. By 2020, the average director in the largest investment-owned care groups was taking home 13 times the pay of the average employee, with the highest paid director taking home 38 times their pay on average. These sorts of multiples are normal for FTSE350 companies, but not for public services. And not at a time where care workers are battling with the lingering impacts of covid-19, and a pervasive cost of living crisis.

In all, care workers painted a calamitous picture of a care sector that has been stripped back to the bare bones in the name of profit; with wealthy directors and investors using extreme strategies to secure a hefty return on their investment, no matter the cost to the workers and service users. We now know that cost is substantial. The get out clause repeated by Lord Kamall and others no longer holds.

As care home manager Isabelle put it: “It’s shocking that, you know, they live that lifestyle, yet the service users don’t have a nice home and that really upsets me”.

Christine Corlet Walker is a Research Fellow with the Centre for the Understanding of Sustainable Prosperity, University of Surrey

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