Written evidence submitted by UNISON [ASC 046]

Executive summary

• The pandemic has had a devastating impact on those receiving and providing social care.
• Covid has highlighted many of the problems that exist in the sector, and the government response was slow and faltering when it came to implementing policies to protect social care.
• Targeted initiatives during the pandemic have provided some basic additional funding and reassurance but social care should not be reduced to depending on short-term handouts.
• The pandemic has shone a harsh light on the poor employment practices which are depressingly widespread across the care sector.
• It is clearer than ever that major reform is essential for social care, and a major part of this is the urgent need to secure significant extra funding.
• In the short-term, improved funding should be used to bring stability to the sector, by beginning to target unmet need and by providing for dedicated investment in the workforce.
• Too often the reform conversation begins with the funding envelope rather than establishing a vision for a future system.
• UNISON favours collective means of raising additional funds – as the most equitable way of doing so and to align social care more closely with the NHS.
• The government should tackle the role played by financialisaton and private equity in the sector and should block companies from winning contracts if they do not pay the correct level of tax.
• Meaningful change will be expensive, but the government should make clear the financial cost of failing to reform social care, while emphasising the strong economic case for reform.
• Rather than propping up a failing market, it would be far preferable to completely overhaul the way in which social care is organised.
• The current social care market is vast and unwieldy, and dysfunctional commissioning practices are standard across the sector.
• Constant changes in ownership of care homes and provider companies is a feature of the market, and current accountability and oversight arrangements are insufficient.
• UNISON welcomes recent proposals to improve data collection and to give the CQC powers to scrutinise the local authority commissioning of care services.
• But there is nothing yet to tackle other problems associated with light touch regulation, with the CQC ill-equipped to oversee the complex financial market that operates in social care, and HMRC has been unable to properly enforce National Minimum Wage regulations in the sector.
• An example of the failure of oversight and enforcement during the pandemic was the flouting of arrangements to ensure workers received full / normal wages when they needed to self-isolate.
• The social care market is very fragile and the prospects for the future do not look good.
• Funding increases must be accompanied by sweeping changes to service delivery to ensure value for money and to optimise the benefits for those who receive and deliver care.
• UNISON continues to advocate a national care service for adult social care, and one in which a much larger proportion of care is delivered from within the public sector.
• UNISON is in favour of establishing a national partnership working group of commissioners, providers and unions to agree and take forward solutions in social care.
• There are several short-term measures that would be beneficial, such as increasing the transparency over providers’ financial sustainability and costs.
• An ethical commissioning approach should be introduced, and work should begin now to rebuild the capacity of local authorities to deliver care themselves.

Introduction

1. UNISON is the UK’s largest union, with more than 1.3 million members providing public services – in the NHS, local government, education, the police service and energy. UNISON is also the largest social care union, with around 185,000 members in the sector.

2. This submission is divided into sections based on the key areas of the inquiry’s terms of reference. UNISON would welcome the opportunity to give oral evidence to the Committee.

How has Covid-19 changed the landscape for long-term funding reform of the adult social care sector?                             

3. The Covid-19 pandemic has had a devastating impact on those receiving and providing social care. By January 2021 more than 30,000 people had died in care homes alone[1] and care workers faced one of the highest mortality rates for any profession during the first wave of the pandemic.[2] The crisis has not had an equal impact on society, and this is borne out within the badly affected social care workforce that is older than the general population, overwhelmingly female and has a disproportionately large number of Black[3] workers.

4. Covid has highlighted many of the other problems that continue to blight social care, particularly the need for an immediate, substantial and sustained injection of funding, alongside long-overdue reform of the sector – both of which are reflected in the frequently used description of social care as the “forgotten frontline” of the pandemic.[4] Compared to other services, the government response was slow and faltering when it came to implementing policies to protect the sector, such as the supply of adequate PPE and a comprehensive testing regime.[5]

5. There have been a series of short-term initiatives to tackle particular issues within social care, such as the Infection Control Fund (ICF), the Workforce Capacity Fund, the Rapid Testing Fund, and free PPE for the sector. While such initiatives have not always functioned as they should,[6] they have at least provided some basic additional funding and reassurance for the sector. However, the fact that a public service so essential as social care – particularly during a pandemic that has a disproportionate impact on the elderly and vulnerable – should be reduced to depending on short-term handouts demonstrates just how dysfunctional the system has become. This sense was compounded by the fact that the continuation of the ICF and Rapid Testing Fund beyond the end of March 2021 was only confirmed on 18 March; and even then, social care was deemed to merit only £341m out of a total pot of £7bn, with the rest going to the NHS.[7]

6. The pandemic has shone a harsh light on the poor employment practices which are depressingly widespread across the care sector. During the initial peak of the pandemic some workers in high-risk groups felt pressured into going to work; there were lockdowns in some care homes with workers told to remain on site if staff or residents became infected; and some employers refused to give sick pay to self-isolating members of staff, or even those who had tested positive for coronavirus.[8] Too many care workers have been placed in the invidious position of having to choose between risking people’s lives (including their own) or going without pay – further damaging the living conditions of people who are already very low paid. In the past year it has also come to light that three-quarters of care workers earn less than the real living wage[9], and the most recent blow to care workers has been the ruling by the Supreme Court that sleep-in shifts do not count as working time for the purposes of calculating compliance with the National Minimum Wage.[10] The sad fact is that in an underfunded, low-wage, low-status industry such as social care, too often it is the workforce that bears the brunt of financial pressures and light touch regulation.

7. Even as the worst of the pandemic seems to have passed, there are a number of reasons to fear that the outlook for the care sector is bleaker than ever. For example, before the recent Budget the NAO predicted that swingeing service cuts are on the way for council services, which are likely to include many adult social care packages[11]; and the IFS reports that the Budget itself will lead to further cuts for unprotected departments such as local government.[12] Social care went into the pandemic with alarming workforce shortages[13] and these seem likely to be exacerbated by the government’s immigration policies: recent changes to the Shortage Occupation List have added more senior social care roles to the scheme, but not the wider workforce. UNISON is already receiving reports from social care members of attempts by employers to make redundancies and to further cut terms and conditions of employment. Some providers are also refusing to consider cost of living pay rises, citing financial concerns as the primary factor.

8. The recent NAO report on the adult social care market found that the lack of a long-term vision for the sector combined with short-term funding fixes has hampered local authorities’ ability to plan for the long term[14] and, as the country begins to focus on post-Covid recovery, it is clearer than ever that major reform is essential for social care. Social care did not feature at all in the 2021 Budget and was little more than an add-on to the recent NHS white paper.[15] It is now more than four years since a green paper on social care was promised and nearly two years since the Prime Minister promised on the steps of Downing Street that the government would “fix the crisis in social care once and for all”.[16] The clamour for reform has only grown louder in recent months from all parts of the sector and across the political spectrum.

9. A major part of this is the urgent need to secure significant extra funding. Local authority finances have been decimated over the past decade, with a number of councils in rescue talks with the government.[17] As a result, and taking into account other council revenues, local authorities in England have had 29% less to spend in 2019-20 than they had in 2010-11. And, even though care has been relatively protected compared to other council services, local authority net spending on social care is 4% lower in real terms over the same period.[18]

10. In the short-term, improved funding should be used to bring stability to the sector, by beginning to target worrying levels of unmet need[19] and by providing for dedicated investment in the workforce. The newly-formed Future Social Care Coalition, of which UNISON is a part, has proposed the use of an emergency support fund to boost pay for care workers.[20] There is also a great deal of consensus across the Coalition about the need for social care reform to begin with the workforce, and the overwhelming need for a workforce strategy for the sector (for the first time since 2009) has become a consistent theme for many commentators, including the NHS chief executive.[21]

How should additional funds for the adult social care sector be raised?

11. Other than a failure of political will, one plausible explanation for why meaningful social care reform has proved so elusive is that too often the conversation begins with the funding envelope. Think tanks that have assessed countries, such as Japan and Germany, that have managed to transform their care systems point out that the key starting point is to establish a vision for what sort of system should be created as a way of building public support and only then going on to consider what levels of additional funding are required.[22] The recent Feeley review of social care in Scotland seems to have grasped this idea, stating at the outset that “we will talk about funding in this report but only once we have described our statement of purpose for social care support in Scotland, our design of a system to deliver on that vision, and the values and relationships that will be required to make improvement happen”.[23]

12. Another early consideration should be the need for politicians to be open and honest with the population about the problems with the existing system, as part of a concerted attempt to boost public understanding of social care, which reports suggest is poor – in terms of how the system operates and, crucially, how it is funded.[24] 

13. In terms of specific approaches to raising additional funds, UNISON favours collective means over individual. The Covid pandemic has taught us that inequality is rife within British society and any attempt to push responsibility for additional funding on to users of social care will widen existing inequalities of provision and access. The pandemic has also demonstrated how fragmented and disjointed the social care system is, so a nationally consistent approach to raising funds would allow for greater central oversight of the system and a more equitable way of generating money for social care – particularly when compared to the current use of the local authority precept, which “could disadvantage those areas with a lower tax base and a greater demand for local authority-funded provision”.[25] A further consideration is the government’s renewed pursuit of health and social care integration embodied in the NHS white paper. One of the factors that has so far hindered attempts at integration has been the fundamentally different ways in which the NHS and social care are funded, so the use of collective means rather than individual would bring the sectors closer in at least one regard.

14. A proper focus on tackling the role played by financialisation and private equity in social care and blocking tax avoidance should form part of the plan for raising funds for the sector. A recent report by the Centre for Health and the Public Interest on “plugging the leaks” in social care demonstrated that the use of opaque financial structures by the parent companies of some care providers has allowed billions to leak out of the sector in profit, rent and interest payments.[26]

15. In addition, while clamping down on tax avoidance is frequently cited as a source of potential funding for various initiatives, in social care it has particular relevance. A recent report from international tax investigators CICTAR shows that internationally owned care companies are ​failing to pay their fair share of taxes and depriving the ​UK economy of millions. It identifies three internationally owned UK care home operators, which are diverting cash to offshore tax havens, while claiming to make little or no profit in the UK.[27] In their words, “the UK government needs to get tougher with care companies dodging UK tax. The unrestrained pursuit of profit by international organisations who see the UK care sector as a soft touch demonstrate the urgent need for reform”.[28]

16. A modern successful social care system that delivers quality care for service users and is an attractive career option for staff will not come cheap – and, as mentioned above, politicians should be honest about this. But government should also make clear the financial cost of failing to reform social care, while emphasising that there is a strong economic case for social care reform (in addition to the more obvious moral and social arguments).

17. In the future, social care should therefore be seen not just as a “cost” but an important economic sector in its own right, with investment in it helping to rebuild local economies – particularly important given the economic fallout from coronavirus. The sector does after all employ more people than the NHS (making up 6% of total UK employment) and contributes more than £46bn a year to the UK economy.[29] Given the ageing population, social care is also a growth sector of the economy[30] and is expected to be employing more than 2 million people by 2035.[31] In the words of the New Economics Foundation, “social care should be viewed not as an endless black hole sucking in money, but instead as a key driver in the UK economy”.[32] Again, the Feeley review in Scotland seeks a paradigm shift in which social care is seen as “a good investment in our economy and in our citizens rather than a burden on society”.[33]

18. There is a particular dimension around women’s employment: a major reason people in their 50s and 60s leave the labour force is to carry out informal / unpaid care, and this burden affects many more women than men.[34] The Women’s Budget Group has pointed out that “investing in care is an excellent way to stimulate employment, reduce the gender employment gap and counter the inevitable economic recession as the UK comes out of lockdown”.[35]

How can the adult social care market be stabilised?

19. The social care system is in urgent need of being stabilised, but a key feature of this in the medium term must be to move away from the market set-up that is itself one of the key reasons why the sector is currently so unstable. Rather than propping up a failing market, it would be far preferable to completely overhaul the way in which social care is organised.

20. The current care market is vast and unwieldy, with an estimated 18,200 organisations involved in providing care across around 38,000 establishments.[36] Within one local authority, as many as 800 different care businesses can be delivering care services at any one time.[37]

21. Driven by the long-term underfunding of local government, dysfunctional commissioning practices are depressingly standard across the care sector. Price is the dominant factor in commissioning decisions, and before the pandemic only one in seven councils were paying the recommended minimum amount for elderly homecare.[38] The NAO has pointed out that in 2019-20 the government “assessed that the majority of local authorities paid below the sustainable rate” for both care home placements for the over-65s and for homecare, but also that it “does not challenge local authorities who pay low rates”.[39] Such an approach means that many providers have no certainty over how many hours they will be asked to deliver by the council, and this insecurity is regularly passed on to the workforce: around a quarter of all care workers are employed on zero-hours contracts, but this rises to nearly half in homecare.[40]

22. The Competition and Markets Authority has previously found a number of problems in the way the care home market functions, such as the inability for people to make informed choices about care homes and the lack of sustainability for key parts of the sector.[41] These problems are replicated elsewhere in social care but there are also further issues, such as reports of “care deserts” in some parts of England where this is an undersupply of services.[42]

23. These problems are compounded by the failure to reward those that work in the sector properly, resulting in high rates of turnover (nearly a third of care staff leave their roles each year) and large numbers of vacancies (112,000 in 2019-20).[43] Too many workers leave for similar or improved pay in other sectors such as retail or hospitality, where they may also be treated better.

24. Constant changes in ownership of care homes and provider companies is also a feature of the social care market as investors buy, sell and restructure operations with little regard for the interests of service users or staff. This creates huge uncertainty and upheaval, including for local authority commissioners who may find one of their care providers has been sold off to a previously unknown entity.

25. Given this level of fragmentation, it is little surprise that, as the NAO has pointed out, “the current accountability and oversight arrangements do not work”.[44] Their recent report points out that the government lacks visibility of how effectively local authorities commission care and the outcomes achieved. Similarly, the government has no legal powers to intervene or hold individual authorities to account, limiting their ability to assess how well money is being spent, or what additional funding is needed to support care users.[45] The recent Care Quality Commission report on Do Not Resuscitate orders revealed a lack of oversight and scrutiny of the decisions being made, citing an urgent need for commissioners, providers and others to improve how they assure themselves that the right approach is being taken.[46]

26. In recent years UNISON’s own freedom of information requests have exposed the postcode lottery that exists when it comes to councils exercising any oversight of how care services are delivered by providers in their area. For example, more than half (54%) of local authorities in England did not state in their contracts that firms should pay employees for the time they spent travelling between care visits.[47]

27. The pandemic has shown up the fact that there is no standardised reporting method in social care, which was why at the start of the crisis it proved so hard to get even the most essential data from the sector, such as how many people were dying. In addition, the CQC can scrutinise the delivery of care but cannot regulate commissioning practices. It is therefore welcome that the recent NHS white paper contains proposals to improve data collection (as a way of giving the centre a better grasp of risk and capacity in local care markets), and to give the CQC powers to scrutinise the local authority commissioning of care services.[48]

28. However, the problems caused by light tough regulation go further than this. As a body primarily designed to regulate the quality of care, the CQC is ill-equipped to oversee the complex financial market that operates in social care; its “market oversight regime” warns local authorities if a major provider is about to go bust but can do nothing to prevent it.[49] All the while the CQC’s budget has been cut,[50] with too much bad practice allowed to persist. In addition, HMRC has been unable to properly enforce National Minimum Wage regulations in the care sector, with action to name and shame non-compliant employers restricted to small local companies, sometimes with only one worker identified as having been illegally paid.

29. An example of the failure of oversight and enforcement during the pandemic has been the widespread flouting of arrangements put in place to ensure care workers receive full/normal wages when they need to self-isolate. As mentioned above, the government introduced the ICF to provide resources to employers to deliver on infection control. Throughout the pandemic, and well into 2021, UNISON has received reports from members being told they will drop to statutory sick pay if they need to self-isolate. Survey data suggests the problem is widespread and UNISON holds written evidence from employers stating they would not implement the measure because it was a request from government rather than mandatory. Failure to pay full / normal wages for self-isolation is proven to drive Covid-19 infection rates in care homes. It is no exaggeration to say this failure has been a matter of life and death for some care recipients and care workers, and it shows how little accountability there is within the current care market.

30. The social care market is very fragile, with many providers entering the pandemic on a financial knife edge. In recent years several of the largest providers have either collapsed or faced serious doubts about their future.[51] Others have retrenched from parts of the sector (particularly homecare) in order to consolidate work in more profitable areas.[52] In the year before the pandemic, three-quarters of local councils reported that providers in their area had closed, ceased trading or handed back publicly funded contracts.[53] The aforementioned sleep-ins legal case also highlights the fragility of the sector, with many operators fearing they would have gone out of business if the decision had gone the other way.

31. The prospects for the future do not look good. The additional pressure exerted by Covid has tested this fragile system to breaking point, with the pandemic expected to have short- to medium-term consequences for the market’s financial sustainability.[54] The government clearly expects it will be called upon to bail out failing providers, with the recent NHS white paper including a proposal to give central government the ability to make payments direct to private care providers.

32. Following the earlier points on financialisation and profits, to avoid desperately needed extra investment leaking out of the sector, funding increases must be accompanied by sweeping changes to social care delivery to ensure value for money for the taxpayer and to optimise the benefits for those who receive and deliver care.

33. UNISON continues to advocate a national care service for adult social care, and one in which a much larger proportion of care is delivered from within the public sector.[55] Such a system would provide far greater reassurance and security to those receiving and delivering care. It would also enable care providers to have greater certainty over their funding streams and therefore to plan better for future needs, particularly in terms of workforce.

How can the adult social care market be incentivised to compete on quality and/or innovation?

34. The market system is deeply embedded in England so, in addition to the suggestions above, there are a number of interim measures that could be taken to improve the quality of services, the sustainability of the system and the treatment of the workforce.

35. One of the problems at the heart of the current social care system is that it incentivises a race to the bottom on terms and conditions for the workforce. Commissioners are short of funds and constantly looking for ways to make cuts to their commissioning spend, providers then compete on price and their biggest outgoing cost is their workforce. As a result, there is little long-term investment in the workforce, which is necessary to drive up quality and treat care workers fairly. UNISON is therefore in favour of establishing a national partnership working group of commissioners, providers and unions to agree and take forward solutions. This could put in place national standards around pay, terms and conditions, recruitment, training, and qualifications which would help reverse the current downwards trend in the sector.

36. In addition to the aforementioned incremental steps contained in the NHS white paper, the NAO has recommended that the government should explore with the CQC how best to increase visibility of and transparency over providers’ financial sustainability and costs.[56] This would be a welcome step that could help identify providers’ financial problems before these began to affect service delivery. Ideally it would also help prevent new entrants from joining the market if their financial position was precarious, and could be used to deter the use of heavily leveraged private equity operations, protecting service users from the possibility of providers failing to fulfil their obligations to deliver care.

37. For the past eight years, UNISON has been actively engaged in work to improve the quality of care commissioned by local authorities through the union’s Ethical Care Charter[57], which many councils have signed up to. It centres on the simple idea that if you give the staff delivering care the resources they need and respect they deserve then the care they deliver will be of a higher quality. The Charter outlaws the use of 15 minute visits for the delivery of homecare, it guarantees that workers are paid for their travel time, and it ensures that rotas are scheduled in such a way that prevents homecare workers from rushing or leaving a visit early.

38. There is other good practice out there. For example, in Wales since 2018, as part of a clampdown on zero-hours contracts, employers have been required to give homecare workers a choice of contract after a three-month period of employment. Providers must also ensure that time allocated for travel and care is clearly and transparently set out – as a way of cutting the “call clipping” associated with rushed care visits.[58]

39. The above initiatives could be pulled together and strengthened further. In common with other commentators[59] – and to provide consistency with the inclusion of “service sustainability and social value” as a key criterion in the proposed provider selection regime for the NHS[60] –  UNISON supports the use of ethical commissioning as a process which could be introduced relatively quickly. As part of such an approach, commissioners would, for example, only be able to purchase care from providers that are transparent about their operations, pay their taxes, recognise trade unions, and can demonstrate compliance with a series of workforce requirements. The latter would include paying all staff at least the real living wage and a commitment to training and skills development, as part of a concerted attempt to boost the standing of care workers. The government should make the Care Certificate mandatory and introduce registration for care workers (to bring England in line with the other UK nations). But there is also a need for a standardisation of employment procedures within the sector; a standard contract template should be used for all care workers, which would include full sick pay, contracted hours (rather than zero-hours contracts), and a guarantee of pay for all hours worked (to include items such as travel time). The template should be produced through partnership working, with a requirement for commissioners to reference it in tenders and for regulators to make this part of provider registration and enforcement.

40. Think tanks have suggested similar proposals, such as “social licensing” in which contracted providers should be able to demonstrate financial sustainability, responsibility in tax payment, and willingness to share any financial data with commissioners – with a key objective of forcing poor quality, extractive providers out of the market.[61]

41. As mentioned above, it is anticipated that there will be large increases in future demand for care: on current trends, it is estimated that around 29% more working age adults and 57% more elderly people will require care in 2038 compared with 2018.[62] There will therefore need to be a considerable expansion in care provision over the next 20 years. UNISON suggests that to help fill this gap – and to address many of the problems of the current care market – the government should begin work now to rebuild the capacity of local authorities to deliver care themselves.

April 2021