The New York Times published an article on companies enriching themselves and then asking for bailouts as coronavirus hits their margins (Wu and Serkez, 2020). I can’t help feeling that in the UK taxpayers will be bailing out decades of bad behaviour by some care home companies as they begin to ask for more taxpayer money.
In February this year the Financial Times published an article on the care home crisis and private equity in the UK (Plimmer, 2020). The article looked at how large care home companies have creamed profits while playing with borrowing. One care home company some of you may know, Four Seasons failing debt repayments of £26m and leaving thousands of residents of an uncertain future. But it doesn’t stop there, the more you dig the more startling are the facts and questions really do begin to surface about whether social care should be outsourced at all. Its easier to blame the local authorities for not paying more, but this isn’t the true picture (Kotecha, 2019).
Its complex to unravel, and I can’t help feeling the big companies like it that way -no transparency. Anyone can track the accounts and business concerns online at Companies House (Gov.UK, 2020), but you won’t find very much in the way of the accounts as most information isn’t disclosed other than charge notices and insolvency notices being served and retracted under some company names, followed by the appointment of yet more new director replacements. As Plimmer (2020) reports, tracing the finances of Four Seasons is all but impossible.
This is just the tip of the iceberg unfortunately I can’t highlight all of the points on a post in a forum, but I think the publics eyes need to be opened. The problems aren’t just about funding they also about how some larger care home companies cream off fees (state and self-funders) as profit which never goes back to care of residents. There is also the buy-back of shares to enhance CEO renumerations and off-shore accounts that can’t be traced outside of the UK as well as playing with large amounts of borrowing with no reserves for delivering care etc. Two reports (Burns et al., 2016, Kotecha, 2019) cover this in detail click the links below, and I invite you to read them. One thing is for certain, things have to change and the way how larger care home companies are allowed to operate begs some serious questions. I personally would rather see the integration of social care with the NHS and at least know taxpayers money is going to where it is needed and the unfair two tier system of self-funding and state funding are abolished. I sincerely hope these companies are not bailed out, having siphoned off millions of pounds away from care provision.
References
BURNS, D., COWIE, L., EARLE, J., FOLKMAN, P., FROUD, J., HYDE, P., JOHAL, S., RHEES-JONES, I., KILLETT, A. & WILLIAMS, K. 2016. WHERE DOES THE MONEY GO? Financialised chains and the crisis in residential care
CRESC Public Interest Report [Online]. Available:
http://hummedia.manchester.ac.uk/institutes/cresc/research/WDTMG FINAL -01-3-2016.pdf [Accessed 05/05/2020].
GOV.UK. 2020.
Companies House [Online]. Cardiff, UK. Available:
https://www.gov.uk/government/organisations/companies-house [Accessed 05/05/2020].
KOTECHA, V. 2019.
Plugging the leaks in the UK care home industry: Strategies for resolving the financial crisis in the residential and nursing home sector [Online]. London, UK: Centre for Health and the Public Interest (CHPI). Available:
https://chpi.org.uk/papers/reports/plugging-the-leaks-in-the-uk-care-home-industry/ [Accessed 04/05/2020].
PLIMMER, G. 2020.
Private equity and Britain’s care home crisis [Online]. London: Financial Times. Available:
https://www.ft.com/content/952317a6-36c1-11ea-a6d3-9a26f8c3cba4 [Accessed 05/05/2020].
WU, T. & SERKEZ, Y. 2020. These Companies Enriched Themselves. Now They’re Getting a Bailout.
The New York Times [Online]. Available:
https://www.nytimes.com/interactive/2020/03/27/opinion/coronavirus-bailout.html [Accessed 05/05/2020].