Remove private profit and use co-operatives to fix our social care system
Alex Sobel, Labour Co-op MP for Leeds Central and Headingley, at employee-owned social care provider Be Caring in Leeds
4 min read
When we arrive at Be Caring in Leeds, the young women who work there are shy about speaking to the camera.
The Co-op Party team is there to film as part of a video series shining a light on communities, businesses and public services doing things differently across the country. We’ve been brought to Be Caring by local MP Alex Sobel, who is clearly incredibly proud of the company and wants to highlight what they do. When we ask founder Sharon and her staff, many of them still in carer’s uniform having just come back from their morning rounds, to talk about their work, they completely come to life.
Be Caring is the UK’s largest employee-owned social care provider. Employee ownership means it is structured in a fundamentally different way to the vast majority of social care companies. Its employees are also owners, so they have a stake in the company’s success and a formal voice in how it is run. Any profit made is either reinvested into the service, often paying for things like regular uniform upgrades, or paid back to staff in bonus payments. This is the classic co-operative model – ownership, decision-making and profit shared.
It’s a model which stands in stark opposition to the rest of the social care sector, one increasingly defined by crisis and scandal. Adult social care faces persistent staffing problems, rooted in poor pay and working conditions, local authority funding crises, regional inequalities in accessing high-quality care and an ageing population steadily raising demand. The staff at Be Caring understand this, many of them having previously worked in privately-owned care companies. The difference, they say, is a service run in the interests of the people who rely on it most – staff and care recipients – rather than distant shareholders.
The Co-operative Party has today released a report on co-operative care, making the case for this model and its transformative potential in helping to fix an increasingly broken system. Most fundamentally, the report calls for the removal of private profit from adult social care and an end to the pervasive domination of private equity in the system.
We believe that the fight to fix adult social care can’t just be about finding more money, but must also be about the kind of social care system we want to build. Since responsibility for funding and commissioning of social care shifted from national to local government in the early 1980s, private provision has become the norm, and today 80 per cent of the largest care home providers in the UK are owned or backed by private equity firms. With private equity domination comes profit extraction. An estimated £1.5bn is now extracted as profit from the social care system every year. This degree of profit leakage inevitably leads to lower wages, less reinvestment in care quality and worse outcomes for care recipients.
We have the opportunity to change this. Last year, the Welsh government legislated to remove private profit from children’s homes, fostering and secure accommodation. It means that all providers must now operate not-for-profit, ensuring that every penny spent on care goes directly towards supporting vulnerable children. This approach can be replicated for adult social care. Co-operatives and other not-for-private-profit models already exist and thrive within the care sector, but they do so in spite of government policy, not because of it. Government could set a clear intention to incentivise this kind of care and phase out the private equity firms that have had such a poisonous impact.
Andy Burnham will soon be the first ever Labour and Co-operative Prime Minister. We believe that with this milestone comes the most significant opportunity our movement has ever had to fundamentally rewire our economy, our public services and our politics as a whole. We can transform the state from one of hoarding power to sharing it, but it’s a principle that we will need to apply everywhere, a lens through which we analyse all of the major problems our country faces. It’s why Burnham was right, in his first major intervention this week, to point to the Rochdale Pioneers, the founders of the modern co-operative movement who looked at a broken economic system and decided to do something to change it. We have done these things before and we can do them again.
Caitlin Prowle is Co-operative Party assistant general secretary
