Privately run care homes fare worse on value for money, treatment of staff and quality of care compared to the non-profit sector, according to a new report scrutinising the sector in Scotland.
The Scottish Government said there was “no evidence” that bringing social care under state ownership would lead to improved standards or fairer working practices, ahead of publishing the bill for the new National Care Service last week.
However, the Scottish Trades Union Congress (STUC) said new analysis had shown that the SNP’s argument did not stack up.
Nearly a quarter of care homes run by major providers had at least one complaint upheld against them in 2019/20, compared to 16% in the rest of the private sector and 6% in not-for-profit homes.
It found that the Feeley Review, which informed the new bill, used “just two pieces of data” to conclude that ownership type did not affect care quality and and considered no evidence at all on the relationship between ownership and fair work.
Analysis of data from the Care Inspectorate, Scottish Social Services Council and Labour Force Survey found that providers were associated with lower staff wages (on average £1.60 less per hour) and higher rents and exhibited a “concerning level of market power”.
The ten largest for-profit care home providers, including HC One, Barchester and Four Seasons, account for around a third or more of registered places in care homes for older people in Glasgow, Edinburgh, North Lanarkshire, Aberdeen and Angus.
In Midlothian, two big companies account for half of the registered places.
READ MORE: Care home owners 'ripping off' elderly with £69,000 fees
The STUC described this as a “ real risk” to provision given that two of the UK’s largest for-profit care home operators have failed since 2010.
Staffing levels were 20% worse in the private sector compared to the not-for-profit sector.
There was strong evidence of “leakage” out of the system through various strategies to maximise (often hidden) profit extraction and minimise tax
liabilities.
Between 2017 and 2020, the ten largest private firms spent £8.45 of every £100 received on non-care costs including payments to the directors and interest payments on loans.
The report also found that at least five of the ten largest private care home operators received £57 million of extra Covid funds in 2020 and 2021.
While one of these companies made a loss, the other four made over three times as much profit as the Covid grants they received.
READ MORE: Dementia will be 'rare condition' within 20 years says Scots expert
The report said Scotland’s ambition to build a transformative National Care Service would not be achieved “ without a radical transformation of power and ownership in the sector.”
It calls for the Scottish care home estate to be gradually transferred out of private ownership and said this could be funded through a multi-year plan backed up by Barnett consequentials from the UK government’s National Insurance tax rise or capital borrowing and said the change would “pay for itself” within a matter of years.
Dave Moxham, Deputy Secretary for the STUC said: “The Feeley review didn’t investigate in sufficient detail the role of private profit in care and therefore came to a conclusion that we think is wrong.
“Our report shows that on value for money, on treatment of staff and on quality of care the private sector fails compared to the non-profit sector and therefore that in conjunction with the view taken that control should be taken away from local authorities punctures a very big hole in the Government’s claim that it is going to revolutionise the care system.”
A spokesman for the Scottish Government said: “The National Care Service will allow us to improve standards across the board and end the postcode lottery in the sector.
"The current models of securing care services will be replaced by a model of ethical commissioning and ethical procurement as the cornerstone of the National Care Service.
“This will include ensuring that all adult care staff experience fair work and introducing national pay bargaining to deliver more equitable terms and conditions.
“The National Care Service will design its services locally to ensure individual needs and local circumstances are taken in account.
"This will include continuing to work with specialist charity and third sector providers of care services."
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