Privatisation and health care are opposites!

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YESTERDAY Southern Cross announced 3,000 redundancies. Its crash is underway with the lives of thousands of elderly residents at stake as well as the jobs of tens of thousands of workers.

Also yesterday a new Unison report, ‘The Rise of the Public Service Industry’, was published which shows that the collapse of Southern Cross is not a one-off, and that a number of other ‘social care’ privateers, who sought massive profits out of health care speculation, are also on the brink.

The report predicts that private equity takeovers of the public services will leave the taxpayers to pick up the bill for the superprofits that have been made, usually just before the bubble bursts.

Unison’s in-depth study of privatisation shows that the second largest care provider, Four Seasons, is also in severe financial difficulties and others may follow.

When both Southern Cross and Four Seasons collapse, around 1,150 nursing and residential care homes will be at risk of closure, affecting nearly 50,000 vulnerable people and their families and hitting over 60,000 staff.

Another of the top four largest residential care home operators is Barchester Healthcare – a sister company to Castlebeck, the operators of the Bristol care home exposed by a Panorama documentary last week for patient abuse.

The home owners have admitted that serious wrongdoing took place at Bristol.

The Unison report shows that Barchester and other operators of care homes have repeatedly changed ownership, often through private equity firms buying, consolidating and selling companies.

In 1990, nearly 200,000 of the 500,000 people in residential care were cared for in homes owned and run by local authorities and the NHS.

Now just 31,000 people are in the public care sector. Trends suggest that there will be no local authority-employed homecare staff left by 2020.

The elderly have been placed into the clutches of private equity and hedge fund speculators whose bubbles are about to collapse, leaving the elderly in the lurch and large numbers of workers jobless.

Unison stresses that: ‘The quality and continuity of care has fallen dramatically since privatisation,

as inexperienced companies bid to run these services. The cost and risk has also risen, as companies borrow too heavily, with their financial performance too weak to repay borrowings on agreed terms.’

Dave Prentis, Unison’s General Secretary, said: ‘The home and day care market is worth about £4bn a year, making it attractive to private companies eager to make profits. But the looming catastrophe in the sector shows that gambling with people’s care is irresponsible and too risky.’

He adds: ‘We are seriously concerned that plans to push through the NHS reforms will lead to a similar crisis in the health service. Private equity and other private sector operators are hovering over the NHS, eager to make a quick profit – at the long term cost of care, quality and continuity of service.

‘Typically these private equity firms buy companies cheaply, merge with rivals and then sell them on as quickly as possible. Short-term asset holding means that people and services are passed from pillar to post, with no continuity of care. Our list of disasters documents a history of privatisation dogged by problems – companies putting profits before people, funds being lost and inexperienced providers delivering poor quality care.’

Health care – hospital, community, and elderly care – and law of the jungle capitalism, hungry for profits and permanently poised on the edge of disaster, are opposites.

This is why the NHS trade unions and all trade unions must demand the nationalisation of Southern Cross and the elderly care ‘industry’, and that privatisation is kept out of the NHS.

A privatised NHS will collapse like a massive Southern Cross bubble, a privatisation collapse that will affect tens of millions.

The trade unions must take action against the privateers and their coalition government.

The coalition must be brought down by a general strike and replaced by a workers government and socialism.