Why are most care homes private?

Reviewed January 2021

During the Covid-19 pandemic, there has been a lot of discussion about the role of the private sector in care of older people. There has even been a suggestion that it is immoral to make your living from this work and that profit from those businesses is only possible through abuse of residents, staff and relatives. I don’t hold that view, and that surprises a lot of people who know and share my moral principles which are liberal and left leaning. I know talking about it is taboo…but here goes!

I spend a lot of time explaining why most of the care home care in the UK is done by private companies.

The reason is this. It’s because citizens in the UK do not want to share the cost of care for old people through our income tax, though we gladly pay for the NHS. We are happier to leave the main part of the cost of social care and care of people with dementia to the individuals and families affected. We decided we wanted to reduce taxes and reduce council charges, and so the care that used to be provided in geriatric hospitals got moved to care homes and nursing homes. The NHS sector withdrew and passed it to the local authorities. Then that care got shifted to private companies who would do it less expensively. You could say “more efficiently” but “efficiency” as a concept is uncomfortable for a lot of people in this context. “Value for money” is an easier idea, but it means roughly the same thing. They’ve always been judged harshly, and sometimes individual care homes have been dreadful but mostly they are very, very good.

Less tax means less public money for care homes

It’s simple. We all pay less tax, because most of us don’t need residential elder care. The private companies who do it now (because the state doesn’t) must have some income, so they charge the customers who need care. Not the rest of us. We don’t pay anything. If customers have a house or any money, they can use it to pay for care. If they don’t the rest of us will pay a little bit, through the local authority. It might not be as upmarket as what you get if you pay yourself, or it might be identical. That’s a matter of luck. Usually not, though. Councils don’t have money to lash about. It’s our money after all.

Private care company misconceptions

Some people hate private care companies. It may be because they have a political view that making a profit is wrong in every way no matter what business it is - transport, fuel or health and social care. It’s a sort of general anti-capitalist view. Another view is that profit is only wrong in the provision of health and social care, because those thinkers are happy for capitalism to work in other areas, but not for sick and ailing people. These are two legitimate political viewpoints. Harder and softer.

Related view points that stand against each other are a) that all of society should pay for the vulnerable, as against b) the idea that only poorer people should have a safety net from society. So vulnerable people with resources should pay for themselves, reducing the burden on everyone else.

The argument against private care is not often presented as anti-capitalist. That would be clearer and simpler. Rather, it is more often framed as what philosophers call an “ad hominem” argument. They don’t argue against the system where we have decided to use private providers, through democratic processes. Instead they try to blacken the character of those private providers who took up the work.

To prove themselves right, they say private companies only make a profit because they pocket excessive amounts of money but their care is poor. That's usually wrong.  There’s no evidence that this is generally true, and those who do provide bad care usually go bust. In fact, much of the best care is provided by private companies. This is especially true if you measure the quality of care v the money the client spends. They also muddle up reporting of the cost of private care, representing the cost of provision of the premises as “profit” to the company rather than an expense. People usually fall asleep and get bored when I try to explain that this cost element is no more dodgy than your rent, or your mortgage. Or should I say, no more avoidable. Someone has to pay for it.

In conclusion the reason why so much care is private is because we created a vacuum and entrepreneurial businesses, most of them honourable, took up the challenge. We have ourselves to thank for where we are, and reversing the position looks almost impossible, if you believe the valuation that has been made of the businesses across the UK that provide care for at least half a million people. The state could not buy this back.

A lot of these arguments are explored in the book, the One Stop Guide to Care Homes. It was written before January 2020, but the Covid crisis meant that publication was delayed. It hasn’t changed the position though, even though in the early stages the media and political pundits flipped back and forward between seeing private care homes as either the problem or the solution to the problem. Taking a position on this without understanding properly why we are where we are, is futile.

Happy to discuss, but look out for what I'm saying for the rest of the week.

 If you would like more information, you can buy my book Dementia, the One Stop Guide or Care Homes: When, Why and How to Choose a Care Home. I am available for consultancy for families or organisations. And if you have any further queries or questions, or suggestions for something you’d like to see me write on, please contact me via the Contact Page

See my new course on Dementia the One Stop Guide on Policy Hub here