The Scottish Trade Union Congress (STUC) has released a landmark report into the private sector in social care. Profiting From Care: Why Scotland Can’t Afford Privatised Social Care investigates the failures of the private sector in the provision of social care. It has been produced off the back of the assertion made by the Feeley Report and the Scottish Government more generally that in a future National Care Service (NCS) that care outcomes are not affected by ownership.
The Feeley report was commissioned by the Scottish Government after a heightened focus on social care through the pandemic. The Feeley report had several findings, chief of which was a call for the establishment of a National Care Service that was on an equal footing to the NHS. This NCS, as outlined, would oversee processes such as procurement of social care services, taking this power away from local government and into the hands of a largely unelected body.
The report also asserted that “The evidence suggests that nationalisation would not in and of itself improve outcomes for people using care.” Profiting From Care has set out to rebuke the arguments made by Feeley in regards to public ownership. It is broadly agreed within unions that organise in the care sector that nationalisation akin to the NHS is not a desirable model and that a mixture of non-profit and local government services provide the highest outcomes of care and workers’ conditions such as pay.
It cannot be understated the importance of this report. This report is not just another example of tinkering around the edges nor wishful thinking. It’s a critique of capitalism itself. The report makes no secret of exposing the insidious ways in which large private sector care providers seek to make profit.
Profiting From Care spends a lot of time talking about the ‘leakage’ within the private care sector. It defines leakage as money spent on things other than direct care provision such as profits, rents, directors’ emoluments, and interest payments. At the heart of this is an understanding that the private sector is deeply inefficient, money that could be spent on higher wages for workers or better care outcomes for care users ends up in the back pocket of fat cat shareholders who have never cared for anything bar making their bank balances bigger.
For example, the average wage over the past 6 years for care staff in local government was £1.60 higher than those in the private sector. What adds insult to this injury is how many of these large private sector providers obtained incredible amounts of money from the government to take them through the pandemic to build up PPE stocks and increase infection control measures. Yet some of these large care providers still made a profit at the end of the year. It’s often said that profits are the unpaid wages of the working class, however in the care sector every penny that’s not spent rewarding care staff for their work or going into direct care provision is money that could’ve been spent ensuring a high standard of living for our most vulnerable.
Many of the large care providers on paper make very small profits. However, this does not take into account the main source of profit for these companies which come through financialisaton. One company made an on paper profit of under 3%, but actually makes related-party interest and rental payments that could constitute a real profit extraction of up to 22% of revenue. These are profits derived from means such as buying and selling care assets and using those assets for further expansion or speculation, high interest payments on loans to other companies owned by the same shareholder or opaquely-priced management or licence fees paid out to a company owned by the same shareholders. Put another way- large parts of the private care sector exist to financialise your gran.
From this report it’s clear that the words care and private sector cannot sit side by side. Care staff often care deeply for the people they care for, however are impeded by issues such as short staffing. A true care sector is one that starts from the point of how do we best care for people, not one that starts from how we best make a profit. As Roz Foyer, General Secretary of the STUC, correctly says “It simply isn’t the case that Scotland can’t afford to buy out private care homes, we can’t afford not to.”
You can read the Profiting From Care report here
And the Feeley report here
Josh Morris, is the YCL’s Education Officer