Yet another example of how our local council, in off-loading its social care responsibilities, is opting for the lowest cost option rather than acting in the best interests of Croydon’s most vulnerable people.
It is less than a month since the Conservative-controlled council ploughed on with plans to privatise the care of elderly residents at a number of Croydon-owned care homes.
Croydon’s chosen provider? Care UK, a profit-making company whose services have been subject to so many complaints that Hertfordshire and Harrow have recently sacked them. In Islington, the company was mired in controversy after the bodies of two residents were left in their rooms for a couple of days.
An investigation for the BBC’s Panorama programme found other startling failures elsewhere in the country at homes run by commercial operators, where “care” is less important than cost. Care UK’s services was among those exposed by the BBC.
Undeterred by that programme’s findings, Margaret Mead, the council cabinet member responsible for social care, ploughed ahead with plans to hand over several Croydon care homes, mostly built at public expense, to Care UK. And all for savings of £2 million a year.
The caring face of Croydon: former mayor Margaret Mead, always careful with carpets
Margaret Mead has an eccentric approach to civic responsibility and caring, as she showed two years ago when she presided over a ban on pensioners and other voluntary groups using the “Mayor’s Parlour” for meetings, for fear that they would wear out the carpet.
At last month’s packed council meeting on the future of the council-run care homes, Mead refused to answer several questions. She then left the meeting early.
Presumably Margaret and her husband and fellow Tory leading light Dudley – who boasts of working from 8am to 11pm every day on council business to justify his and his wife raking in more than £80,000 a year in council allowances – had planned a cosy night in together. Or maybe they had a Chubby Brown gig to attend at the Fairfield Halls, the venue a recent recipient of a £1.5 million hand-out from the cost-cutting Tories on Croydon Council? Coincidentally, Dudders happens to chair the governing board at Fairfield Halls…
We digress.
How is Care UK able to offer supposedly equivalent services at care homes but at lower costs than those incurred when Croydon was running them? By the simple expedient of cutting the staff’s wages. As Panorama showed, this often leads to untrained and under-qualified staff being hired.
London Living Wage, unless you live in Croydon
Croydon Council paid its care staff around £11.20 per hour. According to Labour councillor Kathy Bee, Care UK in London is paying its staff as little as £6.80 per hour – barely above the legal minimum wage. Asked at a public council meeting what terms would be offered to Croydon’s former staff when Care UK takes over their employment, Margaret Mead refused to answer, saying it will be subject to negotiation between individual staff and Care UK. Clearly, once the service is off Croydon’s books, Mead and the Tory council couldn’t care less.
Interestingly, around the same time that this was happening, a campaign for a “London Living Wage” was being launched. Mindful that the costs of living and working in the capital are much higher than in the rest of the country, the London Living Wage is recommended to be £8.30 per hour.
One leading figure said: “Decent hard-working Londoners deserve proper reward for their labours, and I’m delighted that a growing number of organisations recognise that it suits them as well as their staff to pay the London Living Wage.
“It really is a win win for employers as paying a fair wage fosters a loyal and motivated workforce, while at the same time continues to help pull many Londoners out of poverty and boost the capital’s economy. Already many major employers have joined us in signing up and I urge others to look seriously at the benefits and join this important crusade.”
Who was it who voiced such a socially aware concept? A left-wing ideologue such as Bob Crow, perhaps? A Labour cabinet member such as Ed Balls?
No, “this important crusade” was advocated by London Mayor and Tory party icon Boris Johnson.
Perhaps Boris should have a word with his mucker Steve O’Connell (who is paid a very living wage of up to £56 per hour from the public purse as he rakes in his £118,000 in council and London Assembly allowances) about pay rates in Croydon’s care homes?
Southern Cross care crisis
Croydon could be staring down the barrel of a care home crisis, following the news this week that another care home operator, Southern Cross, is in financial difficulties. Maybe trying to profit from the elderly and vulnerable is not always such a proven winner.
Acacia Lodge in central Croydon, Elmwood nursing home in West Croydon, Eltandia Hall in Norbury, Oban House in South Croydon, and Clarendon House nursing home in Thornton Heath are all operated by Southern Cross, which owns almost 750 care homes around Britain, with more than 30,000 elderly in its care.
With financial obligations of more than £200 million and mounting, Southern Cross is now seeking government help, and hoping that its landlords will accept reduced rental payments.
If the company is unable to continue to trade, care for the residents at it homes – including those in Croydon – may fall on local social services. Yesterday, a spokesman for Prime Minister David Cameron gave a guarded guarantee that the on-going care and welfare of elderly care home residents will be a priority.
If only that were also to apply to those elderly residents in Croydon who have been put in the cost-cutting hands of Care UK.
Related articles
- Why has CEO Rouse bunged public cash to private school? (insidecroydon.wordpress.com)
- Secret scheme to cut transport for disabled children (insidecroydon.wordpress.com)
- Care UK care home fails in duty of care (careintheuk.wordpress.com)
- Southern Cross care home rent cuts anger landlords (telegraph.co.uk)
It’s hard to understand how Care UK expects to provide decent care if it’s only willing to pay £6.80 per hour to care workers in London. It’s even more difficult to justify that low hourly rate when the care home resident is paying something upwards of £800 per week for sub-standard care in many cases – and many residents are self-funding, so not able to negotiate a discount as can local authorities.
Makes you wonder what Care UK pays to staff outside of London.
Care on the cheap indeed, but on the cheap for Care UK – not for those in need of care.
Keep up the good work – the more people know about our collapsing care system, because of the greed of care providers, the better!
I explained this to the people at the meeting last night with Gavin Barwell MP, but I shall also explain it here.
I come from Mental Health circles where we already have a mix of Ltd Companies, Charities, and The Public Sector providing help and support. These firms typically have low debts and as such can re-invest 100% (or near enough) of their profits back into their services. Which means the front line is well looked after assuming the firm is funded properly, and also development of services is good.
PLCs (Public Limited Companies) like Care UK are different. They often have huge debts and also have Shareholders. The huge debts eat up more profits that cannot then be spent on the front line and development, and Shareholders take their cut as well. Shareholders do not re-invest though. They usually spend the money on a nice holiday instead, or maybe a new car for themselves. You can think of Shareholders as freeloaders. Basically PLCs leak money like a sieve.
As such PLCs (like Care UK) have to give away so much of their profits to either their huge debts, their shareholders, or both they can only sink 70% of their profits back into their front line services and developing them.
The 70% figure is an approximate. It will vary from PLC to PLC. Some will be able to do 80%, whilst others will only be able to do 60%.
So what is the point in handing over a vital service to The Private Sector? Sometimes it is to allow innovation to come in, but sometimes it is simply out of sheer laziness by the Council or Govt. They can’t be bothered to run it, so simply pass it on to Private Firms.
Let’s look at innovation. Basically Private Medicine can be excellent. As can Nurses working for Charities. But that is because said firms pay enough to keep the best staff. If you look after your work-force they stay motivated and dedicated. If you have to give away 30% of your profits before you even start can you afford to pay the best wage, and as such get the best staff?
Remember staff have bills to pay. They will migrate to the better wages, as they have no choice.
This is the problem Care UK has, and why they are paying less than what used to be paid. They’ve come in, taken the money, they will give a big slice of it straight to their shareholders for their holidays and new cars, will then pay their managers some nice tidy wages, and that will leave very little left. What little is left will go on innovation and the front line staff that actually do the work. Which is why they pay close to minimum wage for something that used to be worth £11.50 per hour approximately.
Quality front line staff will have no choice but to migrate away.
Kiss that quality good-bye? Due to underfunding in development and the better staff leaving for better wages elsewhere? That’s the danger yes.
PLCs like Care UK are simply not reliable enough to provide the sort of support required in the Care Industry or The NHS. Their business models are badly flawed due to shareholders and high debts. Why Croydon Council took them on I do not know. But when it goes to hell (and I’m pretty sure it will) I do hope they hold them to contract and never use them again.
Really they should have researched the providers that had put bids in more, and as such rejected the Care UK bid. Based on past failures, the wages problem, etc etc etc. But that would involve the Council actually doing some work as well.
Laziness is relevant here sadly. And possibly arrogance. Either way I’d say it’s pretty obvious a huge mistake has been made.
I’ll also add this.
This is the time line of Southern Cross. Who also have Care Homes in Croydon.
They win the contract. They get the money, give some of it to their shareholders (and as such never get it back), throw some at their massive debts (and as such never get it back), and spend the rest on cheap staff and investing what they can in the front line.
This works for a while and then Southern Cross gets into trouble. The Govt have to provide a guarantee residents will be looked after. Which means the money spent by The Govt, should Southern Cross go under, will have to be sunk into a new project to look after the Elderly Residents. More than likely it will be the local Council that provides said funds The Govt has promised. The Local Council who already pay the bill to Southern Cross.
So who has profited on this? Remember, front line staff will still need employing, and will still need managing no matter who the manager is (Public or Private). Buildings will still need renting. So you’ll have well paid managers, rent being paid, and low paid frontline workers. And big tidy wodges going to the shareholders. It can be described this way:
– The managers are no better off than if they were employed directly by The Public Sector.
– The frontline staff are worse off, as they have had a significant pay cut.
– The landlords are no better off than before, as their rent has not changed
– The residents will be a worse off to varying degrees as they have low-paid under-trained staff looking after them, and less money getting to the front line where they are. They will see less improvements in their service for this same reason.
– The people owed money by Southern Cross get paid. So profit on the interest.
– The shareholders are better off as they did zero work and raked it in.
So what was the point in using Southern Cross? Less investment in the front line is apparently worth it? Low paid low skilled staff are great? It doesn’t make sense does it.
The same argument can be used for Care UK and how they will perform. Only the people Care UK owe money to, and Care UKs’ shareholders, will see an improvement in things.
As neither firm can perform miracles.
A Southern Cross update (they have homes in Croydon as well):
http://www.bbc.co.uk/news/business-13697582
So…
The managers and admins are fine. Which means it’s got to be cuts in carers that actually do the caring bit for your elderly relatives.
So as well as low paid staff being employed, who will have less training due to the wages offered being so low, they’re now employing less staff to do the caring part of the job.
Anyone else getting worried yet?
And the icing on the cake?
The Elderly, Home Care, and a staffing shortage… Visits that are simply too brief.
http://www.bbc.co.uk/news/health-13813460
What that means is that the care worker simply has too many appointments and as such cannot hang around to do a better job. His or her appts would have been assigned by managers, who also decide staffing. And if they pay naff all and understaff then… You won’t have enough staff, the staff will be poorly trained, and as such the quality will go out the window for those in care.
Due to doing Care On The Cheap.
From what I understand this part of Elderly Care was also privatised. And once again appears to be a skeleton service.
Although, no doubt, a bunch of Bankers and Shareholders did rather well out of it all…