(December 2011) The GMB general union has told the Department of Health that it needs to get to grips with the very real risks to the social care market, if another Southern Cross care home disaster is to be avoided.
The GMB’s evidence to the Department of Health discussion paper, Oversight of the social care market, submitted on 2 December, warned of dangers that have been ignored up to now. The existing framework is completely inadequate and doesn’t provide any proper check on the financial health of care providers.
The GMB has repeatedly warned time and again that Southern Cross’s financial model was unsustainable. The union has now switched its sights to Four Seasons Healthcare and its financial viability. The company has a high level of debt and is taking over some of the home previously run by Southern Cross.
The union has used its submission to the Department of Health to underline the fact that care homes are not an ordinary business and that elderly and vulnerable people are not packages to be bought, sold and moved about in some free-market way.
The GMB wants to see a fundamental review of the care system with proper regulation and increased transparency of the finances of the care companies and their parent companies.
The union points out that the ultimate parent company of Four Seasons is registered in the Guernsey tax haven. A report by the Association of Directors of Adult Social Services found that: “Given the complex group structure and tax avoidance on the property portfolio, it is impossible to say that the care home operation could be extracted as a profitable standalone operation”. For the GMB such lack of clarity in the structure and viability of the largest care-home operator is simply unacceptable.
It wants to see operators like Four Seasons required to abandon their off-shore status, base themselves in this country, and open their books, if they wish to continue to play a role in the care sector. The union also argues that it is not acceptable for the company to claim that they have assets of £200m when the filed accounts at companies house show the opposite.
The Public Accounts Committee of the House of Commons has also made clear its concerns about the state of the care market. Margaret Hodge MP, chair of the committee said: “Effective oversight of the care market, including market share of large providers at the local and regional level, is essential to protect social care users and taxpayers.”
She added that: “Local authority budgets are shrinking and large-scale providers are racking up debt – Four Seasons Health Care, for instance, carries nearly £1 billion of debt - yet the Department is not monitoring their financial health. There is currently no early warning system for providers getting into difficulty.”
GMB Submission on Social Care
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