It will be a worrying time for the care home sector, in terms of economic viability.
Once they were a bit of a cash cow for investors. There was a private home sector catering chiefly for mostly comfortable-off pensioners, alongside a massive public sector provision.
From the early 90s onwards, there was a programme of this public provision being privatised as councils were pressured (by restrictive central funding) into outsourcing. It started slowly, but built quickly in the 00s. By 2010, a clear majority were in private hands.
By 2019, only 3% of care home beds were provided by LAs, with the private sector providing 84% (the remainder by the voluntary sector).
The reasons were simple. Local authority homes employed permanent staff on nationally-agreed pay scales, with the same T&Cs and pension and holidays and sick leave, etc as other local authority staff. It was a decently-paid and secure vocation for those working there.
By outsourcing, the private providers would have freedom to decide their own pay rates and T&Cs. The result has been a downward shift in pay and T&Cs, the proliferation of temporary contracts and agency workers, and the steady increase of foreign workers.
Local authorities would assess the finances of those entering care homes and pay for all or part of the care when financial criteria were met. The rates paid to care homes were set. For those with too great an income or assets, they had to pay full whack to the provider.
Big profits were made by the sector, and the involvement of private equity (around 15-20% of beds are with PE-owned providers) helped drive this.
But problems started post-2010 when local authority budgets began to be slashed by central government. Councils drew in the purse strings and found ways to reduce what they paid private providers.
Some gave gone bust, including a few big players, and the residents have had to endure declining levels of care quality as staff numbers were cut and staff turnover led to under-experience and demotivated carers.
Brexit was already going to be a cliff edge, losing a high proportion of staff as they are unwanted, dirty foreigners.
But the impact on care home residents of this coronavirus pandemic - and the scandal is still emerging; when the smoke eventually clears, there's going to be serious implications and allegations - is going to hit private sector providers in two ways. Firstly, they are losing 'existing customers' as they are dying by the thousand. Secondly, there's going to be a reticence to go into these homes in case there's further 'waves' that kill more thousands (whilst the government seems to shrug its shoulders as they build PR stunt temporary hospitals).
I can a whole new approach being needed for how we care for our elderly.
Originally Posted by: Saint Snow