Social Care Ministers must direct funding into quality public care, not payouts for private investors

©CanStockPhoto obencem

(13 July 2023) Today, the Spanish Presidency of the Council of the EU is hosting an informal ministerial meeting on Employment and Social Policy (EPSCO). Amongst the topics, they will discuss recent advances in EU care policies such as the 2022 European Care Strategy, which recognises care as a public good and calls for tighter quality assurance mechanisms in the sector.

The focus on care is both necessary and timely. Whilst the social services sector is one of the fastest growing in Europe, the growth of the workforce over the last decade has not matched the growth of demand, and almost all EU countries report staff shortages. To meet the growing needs of Europe’s ageing population, there is an urgent need for more public funding and better pay and conditions to recruit and retain an adequate workforce.

The lack of accessible and affordable public care services, driven by widespread austerity measures, has paved the way for the commodification of care, with disastrous consequences. Over the last few years, the care sector has seen numerous scandals and bankruptcies involving large multinational care providers. Acknowledging this, the European Care Strategy emphasises that a lack of strictly applied, high-quality standards can lead to neglect and abuse of care recipients and poor working conditions for carers. Council of Europe Human Rights Commissioner, Dunja Mijatović, has similarly noted the prevalence of human rights abuses in elderly care residencies and highlighted the risks of private owners privileging profits over the quality of care.

Research by the Centre for International Corporate Tax Accountability and Research (CICTAR) demonstrates the systemic and structural societal costs of for-profit care, which are not limited to the serious abuses and scandals found in the headlines. The latest CICTAR report focuses on Cofinimmo, a large and growing investor in care homes across Europe. It shows how private care companies sell their properties to groups like Cofinimmo in order to raise capital or pay-out dividends. Cofinimmo and others then rent back these care homes to the care provider for huge profits under contracts that leave all the costs and risks with the care company. Residents, largely supported by social security, then have to pay for the profit margins of two private companies instead of one.

The European Care Strategy finds that even after receiving social support, ‘nearly half of older people with long-term care needs are estimated to be below the poverty threshold after meeting the out-of-pocket costs of home care’. It is also found that many carers are in the bottom third of the wage distribution, and that low pay is one of the main reasons it is so hard to recruit and retain workers. Why then are companies like Cofinimmo making such extraordinarily high profits just from owning care home properties when care systems across Europe are in such dire need of public funding?

On the day of the EPSCO meeting, we call on EPSCO Ministers to commit to far-reaching, structural changes to the sector and to reverse the commodification of care. Governments must stop profit being sucked out of the care system through real estate speculation and instead make sure enough resources are directed to workers’ wages and residents’ quality of life.

For further information

CICTAR paper on Failed Market Approaches to Long-Term Care

CICTAR Cofinimmo report

EPSU and Social Employers press release on new EU Sectoral Social Dialogue Committee for Social Services