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Thu 1 October 2020
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After more than 12,500 care home deaths, Iwan Doherty considers what should happen now that business model for social care has proved itself to be not fit for purpose.

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The COVID-19 crisis – which has so far resulted in more than 12,500 deaths of care home residents – has drawn attention to our declining social care system, with Britain’s aging population meaning that the sector faces serious challenges to meet growing demand in the years ahead.

The system is primarily run by large for-profit corporations. 84% of beds are privately-owned, of which one-fifth are taken up by the big five providers. The sector has seen a decline in standards in recent years as funding has been cut, which still remains £0.4 billion below its 2010/11 level.

Only 25% of those who applied for social care were assessed as eligible for formal short-term or long-term care. Councils have been forced to be selective with who they can and cannot provide services to, while the rest are left relying on family members or have to pay for basic care out of their savings.

Last year, 1.9 million people requested support from their council – an increase of 100,000 since 2015/16. This rise has been driven by demographic trends which are predicted to continue so the Government will need to increase funding. But money is not the only issue within the sector. Companies could easily blame declining funding for their problems, labelling it as insufficient to provide adequate care, which is only half the story.

According to a report by the IPPR, social care’s large corporate business model is financially unsustainable and detrimental to quality. Evidence shows that the model has led to less training for staff, higher turnover and lower pay which have the knock-on effect of a deteriorating quality of care. The financial instability is best demonstrated by two of the big five providers going into administration in recent years.

The IPPR suggests two solutions: that the state steps in and takes over, or “innovative not-for-profit providers” do. If the UK could replicate the effective social care sectors of nations such as Italy and Japan, the latter option in the form of co-operatives would be the preferable option.


A Co-operative Model for Social Care

Social care co-operatives are companies owned by those receiving care or carers or a mixture of the two. The multi-stakeholder model has proven very effective and their democratic, equitable, staff-led and community-orientated approach has made these co-operatives ideal for the sector.

The fact that surplus capital has to be reinvested into the business to improve quality and reduce costs – rather than being whisked away in the form of dividends – is an added bonus.

While social care co-operatives may be rare in the UK, they are becoming increasingly mainstream around the world. According to a recent study by the International Labour Organisation, among the new business models emerging in response to the demand for care, co-operatives occupy the pre-eminent role. The model has already become extremely popular in Japan but its largest success has been in Italy, particularly in Bologna.

In Bologna, social care co-operatives account for 85% of care services for children, the elderly, the poor, the disabled and other vulnerable people. These multi-stakeholder co-ops allow vulnerable people to receive affordable care within their community, exceeding state and corporate alternatives in their outcomes – for example, these co-operatives provide superior care at 50% of the cost of state programmes. As these co-operatives receive their incomes from a mixture of sources, this would provide a mark decreased in costs for both the taxpayer and those needing care. The sector is also very stable, benefitting from the resilience of the co-operative ownership structure which means that co-operatives are able to provide long-term, affordable care.

A problem with the UK’s social care sector is extremely poor job satisfaction. The profession is so under-appreciated and under-paid that there is a serious problem caused by a rapid turnover of employees. 27% of staff left the social care sector in 2015/16 and, at any one time, there are more than 80,000 vacancies for social care jobs in England. With co-operatives, this is not the case.

Co-operative ownership Community Home Care Associates is the largest American worker co-operative caring for vulnerable people. It has showed great success at providing greater work satisfaction. Despite the industry being traditionally low-paid with a low satisfaction rate and high employee turnover of around 40-50%, the co-operative has an employee turnover of just 15%.

Granted, this is still fairly high but it stands to reason that carers who both do their work within their community and have a say in how their company is managed – including what their pay will be – will be much more satisfied at work and this should help to stem the rapid loss of workers from the sector and improve standards of care.


Phasing-In Co-operatives

Co-operatives potentially provide solutions to the key problems plaguing social care in this country. The question that legislators should be asking is: how can they effectively phase-in co-operatives to improve the sector?

The Welsh Government has been effective at nurturing the co-operative social care movement with examples such as the Cartrefi Cymru Co-operative, a multi-stakeholder co-operative that provides services to people with learning disabilities and has been successful in generating a turnover of more than £23 million. It should be noted that, due to political differences, social care funding is much higher in Wales than in England but that is not to say that social care co-operatives couldn’t succeed in England.

The political will of Westminster remains vital to creating a legal and economic environment that would allow co-operative organisations to develop and flourish. While they are often viewed as having a left-wing ownership structure, the introduction of social care co-operatives can be forged to attract bi-partisan support in Parliament and across the country.

Before the 2019 General Election, Boris Johnson promised that he would fix the “crisis” of social care in the UK. Social care co-operatives provide one piece of that puzzle.


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