The collapse of Southern Cross should end ‘any willing provider’ privatisation

The collapsing Southern Cross private home-care chain has huge implications.   With 750 care homes it is Britain’s biggest private provider of residential homes, and its demise, which could happen any day now, will expose the brutal logic of profit-driven private services – if it’s not turning in a profit, close it down irrespective of the fate of the service recipients.   In this case it’s 31,000 old people, mostly in their 80s and 90s and many with dementia.   The bald question arises: where will they go?   There simply aren’t the places available to take them in the few remaining homes run by local authorities.   This is what happens when Cameron’s policy of parceling out all public services, including the NHS, runs riot.   This calamity should enforce the withdrawal of this policy.   Will it?

There are three key factors behind this approaching catastrophe.   First was the Tory Government policy in the 1990s of incentivising the switch to private providers.   In the two decades 1990-2010 (the policy was carried on by New Labour) no less than 110,000 beds were opened in private and voluntary homes and 95,000 closed in local authority homes.   The result has been that oday some 90% of residential care provision is not publicly provided and most is for profit.   But no provision was ever made (or perhaps even ever contemplated) for when a major provider collapsed or downsized.

Second, driven by very tight financial controls from Whitehall (the legacy of Thatcher’s hostility to local government and determination to screw it into the ground), Councils offered such minimal rates to pay for elderly people in care that small private providers were squeezed out of business.   It is generally agreed that even minimum care cannot be provided for less than £480 a week, yet some Councils have insisted that £400 a week is the most that they will offer.   So the word in Whitehall has developed that only large-scale providers can ensure the security of long-term care.   Now we are seeing that policy being destroyed, with appalling consequences for those thousands of elderly caught up in this ideological quagmire, many of whom will certainly die.  

Third, the logic of privatisation is now being played out in this case in its crudest form.   Homes for elderly people have been floated on the market in exactly the same way as metal or food commodities, namely what purchases will squeeze out the biggest profits?   It could be sub-prime housing via securitisation or vulture funds buying up Third World debt and then extorting the maximum interest rates from some of the poorest countries in the world.   In this case Arab oil money bought up Southern Cross and then walked away with  huge profits by selling off the freeholds, leaving the residual company insolvent and over 30,000 very old people without a home.  

So much for handing over all our public services to ‘any willing provider’.

4 thoughts on “The collapse of Southern Cross should end ‘any willing provider’ privatisation

  1. (in?)voluntary euthenasia looks inevitable in the near future as the UK economy becomes increasingly incapable of providing for the elderly.

  2. Come on this company has been heading this way for a while now. I did not see New Labour doing anything to head off the private companies that are taking over nursing homes, in fact New Labour was happy to allow councils to sell them off. In my area we have just stopped the council from flogging off two council run homes, and the council threats are more council workers laid off. And of course it’s a Labour council.

    The sad fact about all this Labour or Tory these days it’s very hard to find the differences.

    Yes Will Brick I agree with you large camps producing electric and ash for the gardens would be a great way of sending people into the new world, of course the camps could be run by the sick the disabled, once these people start to suffer they can go down the same route, one meal a day no holidays be brilliant.

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