Private companies operating care services in just three regions of England take in more than £250m with a third going to straightforward or tax-based companies.
The new analysis by changing our regional economies warns that public money is rapidly being enjoyed from private companies, instead of registering the improvement of services.
The report, Published on Wednesdayfound that in the North East, South Yorkshire and West Midlands, £256m of revenue was generated by private companies providing care services between 2021 and 2024.
“Politicians and organizations are telling us that it’s not enough money to invest in social care and that we can’t borrow more to build a better system,” the report said.
“The truth is that there is money in the care system but most of it stops. Instead of providing a service to the public, in many things, in constant care or products that can be bought and sold.”
The report found that it has spread to “all aspects of our lives” and “collides with public statements about what public goods and services should be”.
More than a third (£87.7m) of all profits examined were made by care managers owned by private tax-equivalent companies.
A total of £ 45m was paid in dividends to shareholders and £ 33.6m was paid in interest, of which 60% went directly to companies owned by private equity and based on taxes.
The directors of these companies earn 60 times more than the average wage, with frontline care workers often paid less than the living wage.
The report – Final Discontinuation of the Official Care System in the UK – a part of a partnership between the center for local economic methods (CLES), the center for developing areas (CTP), co-operatives UK and the new economy foundation.
It called for the government to put legal limits on the profits made from public services, as well as greater scrutiny of where their authorities spend their money.
“Councils don’t have the kind of data on the companies they support, which is a real problem for taxpayers,” said Lea Millthorne, the report’s co-author and Cles report partner.
“They have to check some boxes, but what boxes are not considered to be related to a provider company or its profit-making methods because it is paired with services because they are forced to contract these services.”
The team behind the report spent months analyzing the complex web of financial assets in homes including children’s homes, sent to the province.
By 2024, £3.8bn will be spent by local authorities in the three regions to fund these care services.
“We know that there is a deeper issue that there are many companies that are still taking more money in debt payments, but our systems to stop the public, from Provie Tors,” said the Public of the Public of Family Marketing
“It does not need to be this way. The government could act, limiting how much can be taken out of public services and supporting further procurement reform so that more local authority contracts go to organizations that reinvest in care, not investors. Care should be a public good that strengthens our communities, not a commodity that drains them.”