The state should build and operate new residential care homes

The IPPR think tank has called for the state to build and operate new residential care homes, and establish new financial regulator to oversee private providers.

According to the organisation’s report, the private sector now provides 84 per cent of beds for people needing residential social care, up from an estimated 82 per cent in 2015. A further 13 per cent are provided by the voluntary sector and just three per cent by local authorities and other public sector.

Meanwhile almost one fifth of all social care provision is provided by the five largest providers, of which four – one more than in 2016 - are owned by private equity firms.

The IPPR lists three factors that can lead to lower quality care from private providers, especially those backed by private equity: covering workforce, instability and size.

To tackle the growing problems and ensure that the sector is properly overseen, IPPR calls for government to: create a powerful new care regulator, OfCare, to oversee the financial regulation of medium and large providers that are important to the stability of the system; compel all state-funded care providers to maintain a minimum ‘safe’ level of reserves, and demonstrate that they pay their fair share of corporation tax in the UK; commit to building homes to provide up to 75,000 beds that will be needed by 2030 through borrowing worth £7.5 billion; and ensure that care within these homes is either provided directly by the state, or - building on the success of the ‘Preston model’ - is purchased from innovative not-for-profit local providers.

The smaller the care home, the more likely it is to provide good care. Some 89 per cent of small residential or nursing homes are rated as good or outstanding by the CQC, compared with 65 per cent of larger nursing homes and 72 per cent of large residential homes. Yet the share of beds in small care homes has fallen in 91 per cent of local areas since 2015, according to analysis by FCC for this project, with only 25 per cent of beds now in such homes.

Harry Quilter-Pinner, lead author of the report, said: “The social care crisis is about more than just money. We need radical reform in who provides care and how they do this. Over the last few decades care the state has handed over the responsibility for care to the private sector. Too often these firms put profits before people.

“That’s why we need a new financial care regulator to ensure better monitoring of care providers financial health, and a commitment from the government to increase the share of residential care directly provided by the state, partly through borrowing to build the care homes of the future. It’s time to end the care home crisis.”