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09 / The wider social care system

Updated: Sep 9, 2023

Why employment conditions are as they are

Home care workers carry out their job as part of a wider system of social care, which is separate to health care. Here is an overview of how social care works in England:

When somebody who needs social care is deemed not to have enough funds to pay for it themselves (see who pays what for their social care?), their local authority must provide funding to cover its cost. The above map shows where this money comes from (taxpayers) and how it flows from central government all the way down to the payslips of individual care workers.

“The funding chain emanates from central government to 152 different Local Authorities. The Local Authorities then procure the vast majority of Care from the independent sector" (Kingsmill, 2014, p.14)

There are weak points at each step in the system:

1. Not enough money raised in tax to meet current and future demand

Owing to the rising demand for social care, more money is needed in the system to provide care to all those who need it. The numbers about the so-called 'social care funding gap' are staggering. The Health Foundation (2021) published thorough "estimates of what it would cost to stabilise and improve adult social care in England". It proposes four funding scenarios based on the projected rises in demand for social care services:

  • Scenario 1 represents the lightest touch approach: how much extra funding will be needed per year to simply meet rising demand under the current system. By 2025/26, an additional £3 billion per year will be needed. By 2030/31, this figure will have risen to £6 billion.

  • Scenario 2 shows how much extra funding will be needed per year in order to both meet demand and improve access to care by "increasing local authority budgets by 10% to increase the amount of care people already receive or to expand care to more people (or both)". By 2030/31, the extra amount needed per year will be £8.9 billion.

  • Scenario 3 covers meeting demand, improving access and paying more for care by "providing local authorities with additional funding to pay higher costs for adult social care packages". By 2030/31, an additional £11.1 billion will be required per year to deliver this.

  • Scenario 4 represents a best-case scenario as far as quality of services and employment goes, within the realm of current systems. By 2030/31, an additional £14.4 billion would need to be made available.

If a policy-maker were shown the above four scenarios, the fact that all four of them are presented as if they are acceptable policy options would likely lend itself to the adoption of scenario 1, which involves the least increase in funding. Yet the additional costs associated with the other three scenarios represent essential aspects of a properly-functioning social care system: ensuring that everyone who needs care is able to access it, and that local authorities pay care providers enough for care workers to be paid a respectable wage.

Here it becomes clear just how huge the challenge facing social care is and how shockingly overdue its reform by successive governments. The only way forward is to increase taxation, but because political parties fear proposing this in case they lose voters as a result, essential public services like social care have effectively been abandoned.

“Successive governments have attempted to address local authorities’ need for more funding for social care through a series of different, short term grants and funding mechanisms. However, despite numerous calls for this, to date there has been no long term funding commitment for social care” (Health and Social Care Committee, 2020, p.7)
“The current level of funding for social care therefore neither meets the expectations society has for the way older and vulnerable people should be treated, nor makes provision for future pressures caused by both demography and rising wages” (Health and Social Care Committee, 2020, p.13)

2. Strained local authority budgets

The government's policy of austerity since 2010 means that the funds flowing from central government to local authorities have been cut. The amount of additional funding required per year simply to meet future demand for social care as outlined in scenario 1 (see above) is based on current levels of access to social care. The Health Foundation (2018) points out that, if the government were to return to "pre-austerity (2009/2010) levels" of social care access, scenario 1 would cost £14.4 billion, instead of £6 billion by 2030/31. This goes to show the extent of cuts to local authority budgets since 2010.

A lack of adequate funding for local authorities leads to poor employment conditions for care workers, and a situation where social care can only be provided to those with the most severe care needs, meaning people who need care are at risk of going without.

“Unmet need is frequently raised as a major problem in social care. Described by the LGA as ‘rationing’ and ‘prioritisation’, local authorities now restrict funding for social care to those with the most severe needs, meaning that individuals who might previously have been eligible for Government-funded care now either have to self-fund, rely on family, or go without. According to the Health Foundation, over 400,000 fewer older people accessed publicly-funded social care in England in 2013–14 than in 2009–10, a 26% fall despite the rise in the population of older people over the same period. There is no agreement about the overall level of unmet need, but Age UK has a widely-quoted figure of 1.4 million older people who are not getting the care and support they need, an increase of 19% in two years” (Health and Social Care Committee, 2020, p.10)

3. Low hourly rates paid by local authorities to care providers

As touched on already, there is an issue around how much local authorities currently pay care providers to deliver care services on their behalf. Owing to the strain on local authority budgets (see point 2), it is now common practice for care providers (the companies actually delivering care) to be paid less per hour of care by a local authority than they are by private clients who fund their own care. The low amount local authorities now pay has led to increasing numbers of home care agencies going under, or deciding to only offer services to clients who pay for their own care, since they are able to charge more for this (Low Pay Commission, 2016). This is creating a two-tier service for individuals in need of care and risks turning the availability of state-funded care into a postcode lottery (Kingsmill, 2014, p.34-35).

Moreover, as a result of not being paid enough by local authorities, care providers are unable to offer decent employment conditions to their employees; locking in the issues of low hourly pay and unpaid working time.

Jane Townson, UK Homecare Association: “We have 13 councils paying less than £15 an hour. That does not even cover the national legal minimum wage and statutory employment on-costs. We believe it should be illegal for councils to purchase care at rates as low as that. Eighteen councils have not given any inflationary uplift to cover the 6.25% increase in NMW that we had in April” (Health and Social Care Committee, 2020, p.12)
"As publicly funded care continues to be squeezed, the danger is that the good providers are driven out and those providers that make a profit by exploiting their workers thrive" (Koehler, 2014, ii)

4. For-profit care providers

The vast majority of approximately 18,500 care providers in England operate on a for-profit basis (Health and Social Care Committee, 2020, p.16). This means they are viewed first-and-foremost by owners as a means for financial gain, instead of prioritising quality of care for their clients and decent employment conditions for their workers.

The standard argument in favour of privatised public services emphasises that competition between providers will naturally lead to a increase in the quality of services and a reduction in the overall cost of providing them.

Whilst there is a degree of consumer discretion at play when someone in needs of social care chooses a care provider in their area, as long as that provider takes on clients via the local authority, it will operate under the same financial pressures as all others. These financial pressures negatively impact quality of care across the board. What's more, if the individual's care package is part or fully-funded by the local authority, under current conditions they are only likely to receive the absolute essentials in terms of contact-time with care workers, regardless of which care provider they go with. So, the competition argument as far as the end service user is concerned simply does not float.

Perhaps the competition angle comes more into play when local authorities decide which care providers to work with? The local authority is the third party and in many ways the deciding force in the relationship between consumer and provider, in what has been described as the "triangular relationship" of social care (Rubery et al., 2016, p.756). From a reduction in cost perspective, yes: care providers compete in a reverse auctioning process to secure local authority contracts, meaning that - as long as the service meets the conditions of the contract - the lowest bid wins (Koehler, 2014, p.15). By making cost the ultimate decider between one care provider and the next, the low-hourly rates care providers receive for local authority contracts prevents them from being able to offer decent employment conditions to care workers, or to indulge best-practice approaches in terms of client care, which has a clear knock-on effect in terms of overall quality of care (Koehler, 2014, p.15).

“Marketisation of care presents a situation where care providers operate within a tight public funding structure, leaving private companies to enhance their profits through setting higher fees for self- funding care users and maintaining low wages and increasing workers’ productivity” (Hussein, 2017, p.1824)

The privatised environment currently responsible for delivering social care in England does not lend itself to the best outcomes for clients or care workers. How can it, when financial growth is the number one priority of care-providing companies, rather than quality of service? Once, when I told someone about my interest in adult social care, they replied that I was wise because "there's a lot of money to be made there". They were right, there is a lot of money to be made from providing an essential service to vulnerable individuals for years on end, diminishing people's life-savings and exploiting workers. Somehow, that doesn't sound right though, does it?

Supporting quotes:

“The privatisation of homecare is a process for which there is no foreseeable possibility of reverse; it is most pronounced in England and available figures suggest that in England, when the care at home workforce is considered in its entirety, a mere 3 per cent of jobs remain with public-sector local authorities” (Hayes, 2017, p.6)

“Marketisation has evidentially increased the role of the private, for- profit, market sector through both outsourcing of services as well as financing users to use/buy such services" (Hussein, 2017, p.1817)

“There was some scepticism, however, about the reality of the inability of the private sector to pay a decent wage. Some participants argued that many private LTC providers could afford paying better wages but they are keeping wages as minimum as possible to achieve their main goal of high profit margins” (Hussein, 2017, p.1823)

“social care employers have argued for several years that the fees local councils pay them to provide services are insufficient to enable them to invest in ways of improving employment conditions for their staff that might improve recruitment and retention (United Kingdom Homecare Association, 2015)” (Moriarty, Manthorpe and Harris, 2018, p.3)

"many of the providers that we have heard from are frustrated by the system. They want to provide good care with a great workforce. They want to stay in business, too. The current commissioning system which focuses on time and task care plans provides little security of revenue and no discretion for change. Councils are also frustrated. They are faced with shrinking budgets and rising demand. They know that good care at home is about the broader network of friends, family and the community and its social and physical assets as well as direct care provision" (Koehler, 2014, iv)

“while in consumer-oriented services, customers’ needs have to be balanced against production costs (Batt, 2007; Korczynski, 2002), users of social care are less able to exert pressure on providers. This is both because in England it is LAs that commission and fund the service directly so that user satisfaction is not critical for repeat business and because elderly adults are often frail and not best able to voice concerns. In social care, the triangular relationships in direct personal services (Leidner, 1993) among employees, consumers or users, and employers becomes four-way, with the LA acting as the dominant client (Fudge, 2006; Marchington, Grimshaw, Rubery & Willmott, 2005)” (Rubery et al., 2016, p.756)

“While councils should be applauded for finding efficiencies in providing home care where this does not compromise quality and safety, methods such as reverse auctioning – getting providers to bid on care and choosing the lowest price to drive down the cost of care – are not an appropriate approach to lowering the cost of supporting people. These methods have a profound effect on the quality of care that is delivered and on the quality of people’s working lives" (Koehler, 2014, p.15)

"Reducing expenditure levels in Care, as a result of austerity measures and increasing demand from an ageing population, is putting Local Authorities under unbearable pressure” (Kingsmill, 2014, p.14)

“Local Authorities have reduced the amount of state funded care and increased the threshold for eligibility. 85% of adults over 65 now live in Local Authorities that arrange services for adults with substantial or critical needs only. 1% of adults now live in authorities which provide for critical needs only” (Kingsmill, 2014, p.35)

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