National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) Regulations 2020

Baroness Tyler of Enfield Excerpts

Monday 8th June 2020 Lords Chamber

[Baroness Tyler of Enfield (LD) [V]]

My Lords, I too support the long-overdue pay increase for nurses working in the social care sector. I also strongly support the regret Motion tabled by the noble Lord, Lord Hunt, who is right to draw attention to the financial instability of this deeply fragmented sector.

There are approximately 15,000 care homes in the UK, with more than 400,000 beds, run by approximately 8,000 providers. Some are very small; others provide a large network of homes. It is a mixed economy: 84% of homes are owned by the private sector, including some that are owned by private equity firms, both British and offshore; 13% are owned by not-for-profit organisations; and 3% are owned by local authorities. Funding comes from a mix of private funders, local authorities and the NHS. Despite this funding mix, care homes have been hit by a decade of cuts in social care funding. An FT investigation last summer revealed:

“Britain’s four largest privately owned care home operators have racked up debts of £40,000 a bed, meaning their annual interest charges alone absorb eight weeks of average fees paid by local authorities on behalf of residents.”


Many have argued that this debt-laden model is completely inappropriate for social care, as is one that involves paying large dividends to investors.

Many homes are already running close to bankruptcy and have expressed grave concerns about the spiralling costs of PPE and extra agency staff, as well as lost income from empty beds. It has been estimated that when bed occupancy rates slip below 87%—as many have now—operating surpluses are such that many smaller care homes quickly become unviable, particularly those with greater reliance on state-funded residents.

This virus has brutally exposed systemic weaknesses in our social care sector. The latest official figures show more than 12,000 Covid-related deaths of care home residents in England and Wales, but it has been estimated that the true figure, calculated by looking at excess deaths of care home residents in the period, could be double that. According to a recent poll, one-third of people say that they are less likely to seek residential social care for their relatives or as a future option for themselves. This brings into very sharp relief the respective responsibilities of central and local government if care home owners go under financially or simply decide to shut up shop and hand back the keys. Simply put, who is the provider of last resort?

Tellingly, that poll also revealed that the vast majority of respondents want care workers to be paid above the minimum wage. If this pandemic has revealed one thing, it is that we can no longer kick the can down the road but must take advantage of the growing public and political consensus that social care should be free at the point of need, funded largely out of taxation. There are, of course, a number of ways of doing this: general taxation, hypothecated tax, or some form of social insurance. This needs to be at the nub of both the political debate and a grown-up national conversation.