Editorial: Britain’s care home crisis (2011)

Editorial from the July 2011 issue of the Socialist Standard

It has often been said that a society can be judged by how it treats its weakest members. How, then, are we to judge what are called the advanced Western democracies?

Consider the case of the elderly. Until recent times, the older members of human communities commanded respect as the bearers of accumulated wisdom. By contrast, how might we expect capitalism to treat the elderly? In short, we would expect it to treat our older citizens with a great deal less respect than it treats profits. We would expect there to be a tendency, strengthened during times of economic crisis, to raise the retirement age, to keep working-class people on the labour market for as long as possible, reduce the costs of pensions and social services so on, and increase the numbers of the unemployed, which acts as a downward pressure on wages and working conditions. We would expect our ageing populations to increasingly be conceived as a threat to prosperity, rather than a sign of human achievement and progress. We would also expect capitalism to rationalise the costs of elderly healthcare to the limits of social and moral acceptability, by centralising and cheapening operations, and turning them into private profit-making businesses where possible.

That’s why socialists are sickened but not in the least surprised by the current crisis in Britain’s care homes. At the end of May this year, Southern Cross, Britain’s biggest care home company, edged towards financial collapse. Southern Cross bought homes across the country before the economic crisis hit, when the sector looked attractive to private equity and property investors – in other words, capitalists looking for profitable homes for their money, who speculated that elderly care homes might make a profit if they bought them, flogged them on (partly to fund expansion, partly to line their own pockets), then rented the properties back. The crisis hit when the care homes could no longer afford the rent, which had been guaranteed to rise by a minimum of 2.5 percent a year.

The increased financial pressure on the industry coincides with weakened regulatory oversight. An investigation by the Financial Times (30 May) shows that this has led to dangerously low standards of care. One in seven privately run homes scored the lowest care ratings by the government regulator, which means they face problems as serious as “a failure adequately to feed or clean residents”. The low rating applied to one in 11 homes run by non-profit organisations or local authorities. An anonymous inspector for the government regulator told the FT: “Fundamentally, it’s now got to a point of being dangerous [for residents] – and it’s going to get worse. If I had a relative who needed to go to a care service, I’d be -concerned.”

A few days after its report, the Financial Times  (4 June) followed up the story by revealing that this disaster was not quite so bad for absolutely everyone. The top executives at Southern Cross pocketed £35m by selling their entire stakes in the company before the crisis hit and the shares began to plunge.

As we said, sickening. But if you’re shocked or surprised, it means you haven’t been paying attention. This is how capitalism works. And that’s how it will continue to work unless we get our act together to stop it.