Socialist Worker

Care at a price — how the vultures cash in on people in need

As private firms grab more services, vulnerable people and the workers who care for them are losing out in a race to cut costs, writes Raymie Kiernan

Issue No. 2419

Care UK strikers

Care UK strikers (Pic: Socialist Worker)

If you’re old or disabled in Birmingham, you could soon find private firms bidding in an eBay-style auction to profit out of your care.

Birmingham council has adopted the new “auction” system for individual tendering.

It has so far assigned 92 percent of bids to the supplier offering the cheapest price. Each “bid” represents a vulnerable human being in need of care.

This drive to bring costs down and profiteers in isn’t limited to Birmingham. It reflects a crisis across the social care system, driven by years of cuts and privatisation that the Tories are making worse.

In the 1980s local authorities commissioned 90 percent of care services from the public sector.

Today the opposite is true—and the new private bosses don’t hesitate to drive down the conditions of their workers whatever the consequences for care.

Care workers in Doncaster, currently striking against a pay cut, know this better than anyone.

Their supported living service for adults with learning difficulties was run by the NHS, until Doncaster Council awarded the contract to Care UK last autumn.

They’ve seen how attacks on their conditions put a downward pressure on the whole service, for example in terms of the training they receive.

Striker Wendy told Socialist Worker, “In the NHS we’d get a week’s training, two weeks induction and a series of mandatory courses specific to the unit we work in.”

But it’s a different story for new Care UK staff, paid just £7 an hour. One new worker told Socialist Worker that she only got five days introductory training and five days induction. 

“On my first shift, for 24 hours, I was on my own in the unit,” she said. “I had to do all these different tasks and put people to bed. Sometimes the shifts can be horrendous with a double followed by a single—that’s 31 hours including a sleepover.”

The continuity of care that service users rely on is also threatened by high staff turnover. This is between 19 and 30 percent per year across private providers in the social care and health care sectors.

Care commissioning bosses gave startling advice in July, in the survey report of the Association of Directors of Adult Social Services.

It reminded councils they had “to pay regard to quality measures” and focus more “on outcomes than inputs” when awarding outsourced care contracts.

It also revealed 19 percent of respondents did not know if their homecare providers paid the minimum wage. And just 3 percent were confident they paid a living wage.

In 2011 the bosses’ Financial Times newspaper had to admit public sector residential care services were better quality than the private sector. 

The Care UK strikers are driving home that point, and fighting to stop the race to the bottom.

What’s Labour offering?

Labour’s shadow health secretary Andy Burnham said last month, “If we allow the continued advance of the market into the NHS it will eventually destroy everything that’s precious about it.”

His big general election pledge is to repeal the Tory Health and Social Care Act. 

Labour also argues for merging the health and social care services, claiming that this can solve the crisis caused by austerity. 

But as shadow care minister Liz Kendall admitted in a speech this month, the plan is for “big reforms, not big spending”.

Ed Miliband said Labour will stick to Tory spending plans, and Burnham has no plans to end the market in health and social care.

New Labour continued the privatisation in care services created by Tory governments before them. 

It will take mass workers’ action to stop privatisation.

Bosses want health cash

The private firms that have come to dominate social care services are looking for vast profits to be made in health care.

Hedge funds and private equity vultures are also moving in. 

The supply of all health, social care and special education services is worth an eye-watering £174 billion.

A report for the British Venture Capital Association not long after the passing of the Health and Social Care Act in 2012 made clear, “It makes pots of money.” 

For private equity firms, health care providers are cash cows. They set up complex financial models involving inter-company loans and tax avoidance.

Bridgepoint Capital owns Care UK. It received £90 million in interest payments from Care UK last year, while Care UK posted operating losses of £9 million.

At the same time Care UK workers lost up to £7,000 a year in pay from the imposition of new contracts.

Private equity controls 8 percent of residential care homes, 11 percent of domiciliary social care and supported living and holds stakes in many other sectors.

Zero hours

Care workers account for 20 percent of all zero hours contracts in Britain, the Resolution Foundation think tank has estimated.

Some 85 percent of health and social care workers employed on zero hours have bosses in the private sector.

Nearly 70 percent of private home care providers offered only zero hours contracts, according to research from the University of Manchester.


Private bosses need to “loosen the stranglehold of professionals on health care delivery”, says Penny Dash. 

She is a partner at consultancy firm McKinsey and a former strategy director at the Department of Health.

Dash made the comments in a speech to right wing think tank Reform in 2012.

That year the number of registered nurses in England fell by 2,283. 

And the number of unregulated health care assistants (HCAs) went up by 2,691. HCAs now make up a quarter of the total nursing workforce.

The market

The ideal model is “rivalrous competition” according to the Competition Commission, which oversees internal markets in the NHS.

This is meant to bring “uncertainty, turbulence and change”.

Few would disagree. In just one year from 2000 to 2001, 1,113 care homes closed down in England. That’s 5 percent of the total.

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