The care homes scandal shows just what happens when financiers are free to make a profit out of the most vulnerable, writes Polly Toynbee in the Guardian
David Cameron's regular railing against "excessive regulation and bureaucracy" rings embarrassingly hollow in this week's care homes crisis. So does his promise that "the grip of state control will be released" from "the enemies of enterprise" as he stops the "dead hand of the state getting in the way".
Writing in the Telegraph back in February, he was two weeks away from publishing an open public services white paper which would, he promised, "create a new presumption … that public services should be open to a range of providers competing to offer a better service". Everything would be up for sale and any civil servants getting in the way would be punished. "If I have to pull those people into my office to argue this out myself and get them off the backs of business then, believe me, I'll do it."
But that oft-delayed white paper still cowers in the long grass. Now it will slip out in "mid-July", those dog days before parliament breaks when a rush of embarrassments emerge with no time for debate. Why? Because too many voters have woken up to how the "any willing provider" edict threatens the NHS, and would jeopardise every other public service too.
Cameron's privatising zeal looks even less enticing in the wake of this week's two care home scandals. The "dead hand of the state" looks rather more welcoming than the grasping hand of private equity. Southern Cross has shown how, as with the banks, privatised services that are too essential to fail make profits while relying on the state to pick up the pieces if they run into trouble, without paying the taxpayer for that hidden insurance. How will the public view predators circling many more services – especially in the NHS – now they see how Blackstone separated property value from the riskier running of the care business?
Financial engineering earned Blackstone four times the original value by selling Southern Cross three years later. Downing Street has been forced, reluctantly, to say none of the 31,000 residents will be moved – though analysts suggest many unsustainable homes will still close, with other care companies caught up in the same snare. Sarah Wollaston, Tory MP and GP, says "it can't be right to make a fast buck and leave the taxpayer with the bill", and adds: "The idea competition drives up standards in care isn't necessarily the case." NHS foundation trusts could fall to the same predation, dividing their property value from the lesser value of medical care. When the FT damns the care home sector with the headline "Human cost forgotten in race to invest", Cameron's privatisation programme looks in deep trouble.
Anger at abuse at Winterbourne View hospital landed harder on the regulator, Care Quality Commission, than on Castlebeck, the company that took £3,500 a week for hiring cheap thugs as carers. The CQC confessed that ignoring a whistleblower was unforgivable – but the regulator should long ago have blown the whistle on itself and warned its task was impossible on its current resources. This outfit was created from three already large regulators: now the human fertilisation authority will be added, and, in the NHS bill, Healthwatch too.
CQC's budget is 30% less than the regulators it replaced. In the past year it cut its inspections by 70%, taking a minimum of 120 days to register new homes. Its 900 inspectors are expected to cover more than 8,000 GP practices as well as 400 NHS trusts, 9,000 dental practices and 18,000 care homes. It has been told to recoup all its costs by raising the fees it charges all these providers – which limits its income. But instead of warning that it couldn't possibly inspect all these services adequately, when I spoke to them yesterday they claimed they had no cuts and everything was just fine. Terror at Cameron/Maude/Pickles threats against "the grip of state control" has bullied too many regulators and services into dangerous submission.
Shocking findings from an FT care homes survey this week had to rely on 2010 figures, as this government has abolished CQC's old star ratings, in its bonfire of measurements. The survey revealed that one in seven privately-run care homes rated "adequate" or "poor" in contrast to one in 11 among non-profit or local authority homes. Given the lack of inspectors, only now going in unannounced, that must be a grave under-estimate: wherever the vulnerable are in closed care the risk of abuse is high.
Too few badly paid, under-supervised carers will often mean neglect, but the only way private companies can make significant profits out of non-fee payers is by hiring cheaper, worse-trained staff. Local authority and charitable homes pay higher wages for better care but the government calls that "feather-bedding". Many regulators are burdened with tasks beyond their resources. Just 100 HMRC inspectors check all employers for minimum wage compliance: no wonder illegal immigrants are rarely found. Ofsted should complain it can't properly inspect the vast private daycare and nursery sector – another scandal waiting to happen where the money the state pays in care credits doesn't cover the standards expected.
The Dilnot commission looks set to offer sensible solutions to financing care of the old. Instead of losing the whole value of a property to finance their care, old people will lose no more than a cap of around £50,000, with the state taking over thereafter. That allows the insurance industry to enter a market to cover that £50,000 or to pay for better care. Will George Osborne agree the state must find another £2bn, to add to the £8bn it already pays? So far, Andrew Dilnot appears to be securing approval from the main charities and political parties for a long-term settlement. Labour will not play politics with this.
But Labour should be protesting loudly about inadequate inspection – and against financiers making a killing out of the most vulnerable. Public tolerance for privatising services for the weak and sick may have been tested to destruction. Cameron ignored political warnings about Andrew Lansley's NHS plans, which have already cost £1bn and met with strong public resistance. The care home crisis comes at the worst political time, displaying all the inherent risks in a privately-run NHS. Let me share with you the last sentence in the Daily Mail's leader which ranted against Southern Cross: "When will the City learn that its predatory unethical greed plays into the hands of leftwingers who say the private sector can't be trusted with social care?" Just so.
Illustration by Martin Rowson