The case for health and care privatisation

Yesterday, the Health and Social Care Bill finished its passage through Parliament. Today is the budget speech.

Saturday’s Guardian had a piece entitled ‘What will the 2012 Budget mean for you?‘. It was not about the NHS, nor privatisation, just about how the budget affects the lives of ordinary people. But one of the ordinary people – acknowledgedly ‘the high earner’ – caught my attention, because he works in the field of social care. His name is Tony Stein.

According to the article,

Tony Stein is founder and director of Canterbury Care, which operates 11 care homes across the UK. Last year his earnings “just about touched” the £150,000 level…

Although Tony signed a letter in the Telegraph last month arguing that the 50p tax rate “puts wealth creators like us in an awkward position”, he is an ordinary guy:

It’s not as if I’m earning millions. Actually, what has me shouting at the telly is the executives of big banks who earn millions but aren’t putting their own money at risk.

Is Tony making out a persuasive case for private enterprise running social care, the case for privatisation? Let me make clear, I don’t know him personally, nor do I have any dealings with his company. Nor, frankly, have I done much by way of research, though I have done a little digging.

A little digging revealed that Canterbury Care is headquartered in Worcestershire, where a local Green Party member in 2010 criticized the Council’s Chief Executive for not taking a pay cut:

Mrs Haines is contracted on a salary band ranging from £167,977 to £183,725 a year.

Worcestershire County Council’s accounts suggest it is rather a larger affair than Canterbury Care with its 11 care homes; its Chief Executive gets paid more, but hardly in proportion to the size of the enterprise. Among the information I extracted from Worcestershire’s balance sheet are that it has long term assets of £1.695 billion and long term liabilities of £1.056 billion. I went looking for that figure to compare it with Tony Stein who says Canterbury Care has “£14 million in borrowing”.

I venture to suggest it is pretty plain that Tony Stein has a salary chasing that of the Council’s Chief Executive, for a far smaller venture. Measured by debt, the Council’s financial headache seems to be about seventy five times the size.

At this point, I start to speculate that it might be 75 times cheaper to have debt presided over by a local authority than a private enterprise, and that Tony Stein really hasn’t made out a persuasive case for privatisation of social care.

But, to be fair, it isn’t just the size of the financial headache that Tony relies on to convince us. It’s the fact that

…We employ 455 people, but we have £14m in borrowing, and a big mortgage on my home. At the end of the day I have my neck on the line. Yes, I earn £150,000 or so, but it’s me who has sleepless nights over the borrowings and operations of the business, and it’s me who works all weekend.

So he can shout at the bankers on the telly like the rest of us, because of the fact that his pay is justified because his own money is at risk in his enterprise. And he works all weekend – though I am presuming his residential care homes are staffed all weekend also.

I’m sorry, Mr Stein, but I’m afraid you have actually made out a case to be relieved of that risk and that income. I’m just not getting what is the benefit to the public of the liabilities and risks being borne by wealth creators like you instead of the taxpayer. If residential care were run by local authorities, no individual would have to have sleepless nights because of their personal investment and risk. No individual would therefore need to be paid £150,000 to preside over just 11 residential care homes. The tax payer wouldn’t need to worry about where the money came from and whether there might be a Southern Cross-like disaster. The case for privatisation is not made out.

And I haven’t even begun to explore the market arguments about quality, efficiency, competition and the like. This commentary is just about the apparently extraordinary cost of privatising capital and investment risk.

Did I mention, yesterday the Health and Social Care Bill cleared its passage through Parliament?

Allan Norman (@CelticKnotTweet) is a registered social worker and a solicitor at Celtic Knot – Solicitors and Social Workers.

Direct Payments, Fraud and Safeguarding

Yesterday, I was engaged in a (very brief) discussion on Twitter about this article in the Guardian on Wednesday which highlights a case where direct payments were used fraudulently with tragic consequences.

The thrust of the discussion was that while there will always be isolated incidences of potential abuse and criminal actions, highlighting the method of delivery of the service (through direct payments) was unhelpful at best when there is so much abuse in the delivery of ‘standard’ care packages especially with the follow up article here about ‘how to prevent fraud in direct payments’ which itself states that

There is as yet no evidence that having more people on personal budgets in Enfield has increased the amount of fraud. In fact, of all the fraud cases identified in the area in the past year, only one was related to personal budgets.

Having been involved in the provision and delivery of direct payments since they were first established (Community Care (Direct Payments) Act 1996)   I’ve never personally  come across an instance of them being misused intentionally.

My gut feeling is that the man in the first article who was killed by his son – after receiving a direct payment for a couple of years – may not have experienced a different outcome if the means of delivery of the care had been different.
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CareAdvisor

Yesterday, it was announced that the government was going to set up a website, the details of which would be unveiled  in the Spring White Paper on Adult Social Care which could bring a kind of ‘Trip Advisor’ model of rating and commenting to providers of care homes and nursing homes.

Sounds good so far. I certainly welcome more open and accessible information for those who are choosing care homes but there are some real and obvious differences that need to be highlighted between the choices that are available to those who are picking hotels in New York City and those who are choosing care homes for Granny in Wallsend.

On a positive note, Burstow claims that these plans came from user-led discussion groups which shows that he is listening but there are some important points that have to be taken into consideration, lest this is seen as a way of trying to provide regulation on-the-cheap because the actual regulatory body – the CQC – is unable to carry out its function.
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CQC – the insiders’ views

The Inquiry into the failings in the Mid-Staffordshire NHS Foundation Trust has been going on for a while now but yesterday there was some hefty evidence from two CQC (Care Quality Commission) ‘insiders’ which blasted open the so-called regulator and lifted the lid on the poor practice that some of us have suspected for a while.

I would urge anyone in health and social care who serves are regulated by this body, take a look at some of the evidence presented yesterday. I did and I hate to say that I wasn’t surprised but let’s just say it confirmed some of my suspicions.

The two witnesses who provided the evidence were Amanda Pollard – an inspector with the CQC and Kay Sheldon – a non-executive director at the CQC.

I want to look at some of the statements that they made in the hope that these issues are picked up on by a wider audience.  Both Amanda Pollard and Kay Sheldon are ‘whistleblowers’ in the finest tradition and should be heartily applauded for the stance they have taken. Continue reading

Is the CQC fit for purpose?

There was an interesting article in the Guardian yesterday about the Care Quality Commission which was set up as a new regulatory body for health and social care in 2009.

The CQC is headed by Cynthia Bower at a salary of £195,000 pa who was previously the Chief Executive of the West Midlands Strategic Health Authority – responsible for Stafford Hospital at the time it was found to have been providing substandard care.

How she was able to take post at the CQC is quite staggering to me, as an outsider but there she is, responsible for the regulation of health and adult social care services. You’d think it was the opening of a black comedy. Maybe it is.

There are some chilling facts that the Guardian have uncovered and they deserve repeating – over and over again – because the CQC is responsible for the regulation – not only of hospitals but of every care home and domiciliary care agency in England.
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What is a Deprivation of Liberty? – Thoughts on Cheshire West and Chester Council v P

I accept that this post is about something of a niche in the corner of health and social care but it’s an area I have some interest in as I’m a Best Interests Assessor. This is going to be a long haul of a post so I’ll start this time with a glossary.

Deprivation of Liberty Safeguards – particular additions to the Mental Capacity Act which were supposed to fix a ‘gap’ (known as the Bournewood Gap – see below) in UK legislation where people without capacity could be ‘deprived of their liberty’ in a hospital or care home without leave to appeal.

Bournewood Gap – while it sounds like the name of a service station, it resulted from the HL v Bournewood case which was taken to the European Court of Human Rights and determined at a man (HL) with learning disabilities had been detained unlawfully in Bournewood Hospital. This case meant the UK needed to change its law to be compatible with the Human Rights Act.

Mental Capacity Act – broad legislation introduced in 2005 which included (on amendment of the 2007 Mental Health Act) these Deprivation of Liberty Safeguards

Best Interest Assessor – one of the minimum of two people involved in assessing whether a deprivation of liberty should be authorised or not. Usually a social worker, nurse or  occupational therapist – could also be a clinical psychologist (unusual). They will assess both whether there is a deprivation of liberty and whether it is in the person’s best interest.

Mental Health Assessor – the other person who would be involved in assessing whether a deprivation of liberty should be authorised. They will be a specially trained doctor. They assess, well, the Mental Health.

So back to the start again and ‘What is a deprivation of liberty?’ in this context? Considering I’m a Best Interests Assessor and one of my roles is to actually assess whether a deprivation of liberty is taking place or not, you’d think that I would have a great answer to add to my ‘summing up’ glossary above.

You’d be wrong. The definition of ‘deprivation of liberty’ is fuzzy and continues to get fuzzier.
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Opening Secret Courts

As it happens, I work a lot around issues of Mental Capacity in my day to day work so I have more than a passing interest in the dealings of the Court of Protection. The Court of Protection, you see, has a hand in many of the issues that might relate to decisions that are made in relation to people who lack capacity.

The Court of Protection is generally closed. The reasons being (and I make no judgement of the rightness or wrongness of this) is to protect those whose personal business arises in the court. As it relates to people who lack capacity in general, they are not able to make a decision about the reporting, or not, of their personal lives as they unfurl in the court and usually have not personally taken the active decision to go to court so should not (the argument goes, I suppose) deal with the publicity that surrounds it.

This is what is mean by ‘closed’ justice and ‘hidden’ courts that some newspapers, the Independent notably, campaign against.
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Private Equity in Social Care

Today, in their ‘Society’ supplement, the Guardian include a special report on ‘private equity in social care’ and particularly in residential care services in the wake of the collapse of Southern Cross.

The articles make interesting reading and have to be considered as parts of a whole.

The introductory article explains the premise and what I would express as the ‘problem’

Before it was floated in 2006, Southern Cross was owned by US private equity group Blackstone, and over the last decade enjoyed a period of heady growth. But its failure to meet a huge rent bill from freeholds that were offloaded to raise cash during the boom years (known as sale and leaseback), together with declining fees from local authorities – which paid for most of the 750 care homes’ 31,000 residents – pushed it under.

In total, more than 200,000 vulnerable people are being cared for in residential accommodation or in their own homes by scores of companies that have been bought out and run by a dozen or so leading private equity companies. This means that a significant proportion of all care homes in the UK are now owned by private equity firms, which are earning hundreds of millions of pounds a year from local councils and the NHS.

Southern Cross made its money on the rising prices of land and property.The market is not about human beings so much as being about the buildings in which those people live and while the fees are rising, there doesn’t seem any evidence from  my own experience (and I go to a lot of care homes) that there has been a rise in quality of care.
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