New Report Calls for Reform of Publicly Funded Care Market
Recent research reveals hundreds of millions of pounds extracted from publicly funded care services across the North West.
A new report commissioned by the North West Regional Leaders’ Board and undertaken by the Centre for Local Economic Strategies (CLES) has highlighted the significant level of financial extraction taking place within publicly funded adult and children’s social care across the North West.
The research was commissioned following discussions at a Parliamentary Reception held in April as part of the Powering Up the North West agenda. Sponsored by David Baines MP, the event brought together North West leaders to discuss the growing pressures facing local authorities, particularly the increasing demand for adult and children’s social care services alongside continued financial challenges.
Recognising concerns about the role of large, extractive providers within the care market, the Board commissioned CLES to examine the scale and impact of financial extraction across the region.
Key findings
The report found that:
- Councils across the North West spent approximately £5.9 billion with third-party care providers over the last three years.
- Care companies generated £356 million in profits over the same period.
- Almost 40% of those profits were generated by companies owned by private equity firms or organisations linked to tax havens.
- Significant amounts of public money are being diverted through profits, dividends and debt servicing rather than being reinvested in care services, workforce pay and local communities.
The report argues that the level of money being extracted from the care system is comparable to the investment needed to ensure care workers receive the Real Living Wage.
Calls for national reform
The report calls on government to consider reforms aimed at reducing excessive profit extraction from publicly funded care services and ensuring that a greater proportion of public funding is directed towards frontline care delivery, workforce development and improved outcomes for residents.
Findings from the report have already been shared with officials from the Ministry of Housing, Communities and Local Government, the Department of Health and Social Care, HM Treasury, ministerial offices and the Casey Review.
The findings were also discussed with North West MPs at the Parliamentary Reception in April, where leaders highlighted the importance of securing a more sustainable future for adult and children’s social care.
The report will be discussed at the next North West Regional Leader’s Board meeting.
Read the full report here.