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The Ticking Clock of Social Care in Crisis

George Osborne is ripping out the very fibre of our social being and selling it off to the highest bidder.   But as a business model, it stinks. Social care is a failing business.  Social care is in crisis.

Earlier this year Age UK warned that the social care system in England is on the brink of a 'cataclysmic' collapse with cuts in funding leaving the system unsustainable.  They warned the government that the 'clock is ticking'.  As a result, many families will be facing unpalatable decisions about the support they will need, and where local authority provision fails, the vultures of a rampant private care system will hover. 

You might think that all this could at least be ameliorated through careful planning, but many families find themselves in unforeseen situations when NHS care comes abruptly to an end.  When a relative goes into hospital in a critical condition, but there is little doctors can do so they are returned home with the anticipation that domiciliary nursing care can be provided. 

Families may be given just a few days to make such provision.  In the turmoil and anxiety, they are expected to search out care providers, consider the financial implications, make necessary adaptations to their homes, seek advice and finance, and still come to a rational choice about what is needed and how best it can be provided.  The cost is huge.  

Consider also that those having to make such decisions are themselves often elderly if not frail.  They are meant to have choices, but in effect, they are given a fait accompli.  Nursing care costs mean that the family faces financial ruin. 

Finding money to foot these bills will, according to the Department of Health,  trigger more than 35,000 emergency property sales a year.  The need for a quick sale also leaves families in a desperate situation where property prices are slashed for a quick sale.  Homes may have to be remortgaged to pay for social care provision.  This is the stark reality. These are not exceptional cases. Our social contract has been abandoned. The fabric of that contract, woven over many decades, has been shredded.

The government will say it is because more and more people are living longer.  But that isn't the reason. The reason is that the government has cut, cut and cut provision to local authorities and they have squeezed funding of the NHS so that it also is now unable to cope with the added consequences of failing social care. The need to prevent 'bed blocking' means that the onus is pushed on to relatives having to make domiciliary provision or put their loved ones into residential care, and often with just a day or two notice. 

It is a problem of the government's making, and not simply that we are 'living longer'.  It is the price of austerity. Yet what kind of 'austerity' is it that cuts inheritance tax whilst cutting social provision? what kind of austerity is it that cuts tax on a pint of beer whilst cutting social care? What kind of austerity is it that cuts taxes for the wealthiest whilst others are ruined by social care costs? It is unfair, unjust and bad economics.

Despite Tory promises made under the previous coalition, tens of thousands of people will have little choice but to sell their homes to pay for social and domiciliary health care.

Cuts in funding have meant that the government has delayed the introduction of its flagship cap on the amount families would need to pay for social care because local authority finances are too fragile to cope. 

In 2011 the Dilnot Commission called for a cap of £23,000 on the costs to be born by an individual. This would have meant that when the care costs had reached that threshold then state funding would kick in. Next year the Government was to set a cap of £72,000 - three times the level recommended by Dilnot. But even this has now been delayed until 2020.

Local authority funding is varied across the country, leaving a postcode lottery for public funding of social care and hundreds of thousands are missing out on support for care costs. The root cause of the problem is cuts in government funding to local authorities. Age UK estimates there are more than one million left struggling each day without proper support and the numbers continue to grow as cuts in funding leave local authorities struggling to meet needs. 

A report published by adult social care chiefs (Association of Directors of Adult Social Service (ADASS) earlier this year warned of £1.1bn budget cuts to the sector. Additional funds, it said, are urgently needed to protect services after "almost unendurable" cutbacks in the past five years. Spending on the NHS has remained static at best, whilst funding for social care has been cut by 10.7%. It is a false economy. 

Most of the care is being provided by some 6 million unpaid carers - partners, parents, siblings. The burdens of such care mean that many of these are unable to stay in work and it may also lead in turn to health issues. The cost to the economy of people dropping out of work to care is estimated to be a massive £1.3 billion a year through foregone taxes and benefits for carers.

With the growing need for social care, you would think that private social care providers were thriving businesses.  Yet this is not so.

Britain's care homes are facing a financial crisis with a recent Care Quality Commission (CQC) report warning that high debts, diminishing local authority fees and rising costs could lead to "another Southern Cross style crisis".

Private sector care came under scrutiny in 2011 when Southern Cross, a 750-home operator, collapsed under a mountain of debt and controversy over its business model. It was controlled by private equity firm Blackstone, which sold off and then leased back its 750 care homes.  With increased rents, falling local authority income, and rising operating costs it collapsed with an unsustainable debt burden. Thousands of vulnerable residents were left in limbo as the group was broken up and its homes sold off to rival operators.

Bupa reported a £1.2m loss in its the UK care home business last year with speculation of a mass sell-off of its care homes, whilst there is also speculation that Care UK, one of Britain's biggest care providers is about to sell off all its domiciliary care services. 

The UK’s largest care home provider is considering selling scores of its properties as it plans to trim its budget. Four Seasons Health Care has seen a 5% reduction in fees over the last five years. The company, which cares for thousands of residents, faces a £500m deficit in its finances after government spending cuts. 
When the banks failed the government stepped in to rescue them.  Now social care is failing as a direct effect of government cuts.  It is time the government stepped in.  It is time for a new strategy.  Austerity isn't working.  It is time for an integrated approach to health and social care.  It is time they accepted that social provision is necessary. It is time to end the belief that markets and price settle everything. It is time the government stopped ideologically destroying the social fabric of Britain with their systematic attack on the welfare state. 

Good government should have both social and economic objectives. Instead the government foolishly sets an objective to cut the deficit. Its solution is always to sell, sell, sell, rather than build and create. It attacks the poorest whilst giving tax breaks to the rich.  The market in social care is failing. Time for social provision. 

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