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Care for the vulnerable and profit don't mix

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The market knows best, is the mantra of the moneymen; let private enterprise, financiers, bankers, run everything.   Competition will deliver good quality service.   Light touch regulation and light touch supervision should be the order of the day.   Otherwise you will kill innovation and progress.   Two scandals in Britain this week have awakened ordinary Brits to the fallacy that such sentiments are universal.

Scandal one: the British Guardian (6-June-2011) reports on the financial plight of Southern Cross, the country's biggest care homes company, which is responsible for looking after 31,000 elderly residents, many of whom are funded by the taxpayer, across 750 homes.   The GMB union, that has a membership of over 600,000 drawn mainly from manual workers in local government and the health service, published a dossier on the troubled company blaming the troubles on "scandalous financial engineering". The dossier states:

"The US private equity firm Blackstone is estimated to have made 600m pounds in a four-year period on secret financial dealings on the care homes, which are now run by Southern Cross. The report said the debacle involved Jeremy Heywood, the permanent secretary to David Cameron, who was co-head of UK investment banking at Morgan Stanley. The company acted as financial advisors and lead managers during the sale."

Note the cosy relationship between politicians and the financiers.   The uncertainty about the future of the company has caused anxiety and worry to the very old and vulnerable in our society.   The shortfall in the finances, according to the dossier, is a result of the exorbitant rents for the care homes.  Guess who is going to pay for the mess created by a financial business model designed to maximize the profits pocketed by Blackstone!   You guessed it; it is the workers who had absolutely nothing to do with the problem.  The company has announced that they plan to make 3,000 workers redundant.  It claims that the standards of care will not suffer.  Yeah, right, as if the company would employ 3,000 more staff than it needs to start with, as an act of social service to society!

Once again, those who made the profit through financial dodgy deals keep it, while the taxpayer is left to pick up the tab of unemployment benefits and financial help that may need to be given to keep the care homes going.   Of course it is right that the government makes sure that the old and those who have become unemployed should be supported, but the money should come from the ill-gotten gains made by sharp business practices.

Scandal two: The BBC's Panorama programme (9-June-2011) presented secret filming in a taxpayer-funded care home (Winterbourne View), showing shocking scenes of mentally-disabled residents being abused, pinned down, slapped, doused in cold water and repeatedly taunted. The British Daily Telegraph (09-June-2011) gives the background thus:

"The abuse took place at a care home for adults with autism and learning disabilities run by Castlebeck, a company which has a -90 million turnover and runs more than 50 other care homes. The company charges the NHS and local authorities up to 3,500 pounds a week to care for one patient.   Castlebeck was founded in 1987, and offers specialist healthcare and rehabilitation to vulnerable people, including men and women with autism, learning disabilities, behavioural and mental health problems.   It employs 2,100 people, providing care for 580 service users at 56 facilities nationwide."

Mark Goldring, chief executive of learning disability charity Mencap, told BBC Radio 4's today programme that:

 "The treatment of patients was "horrific" and seemed "like torture".   The behaviour of the individuals was cruel and barbaric and the management seemed to be either complicit or non-existent."

This is a private company that employs seemingly untrained sadists, probably pays them no more than the minimum wage, just over 6 pounds an hour, and pockets enormous fees, paid by the taxpayer, for those most in need of our protection to be looked after, only for them to be treated far worse than you would treat an animal. The Telegraph continues:

"The investigation (Panorama) also found that a whistle-blower had previously reported abuse to both managers at the home and the Care Quality Commission, the official watchdog. Both failed to act."

It is one thing to have private enterprise producing toothpaste and making cars, where competition ensures that quality is maintained, but quite another to have the care of the vulnerable in the hands of faceless individuals devising financial schemes to fleece the tax payer, unconcerned by the quality of the service provided.   The above two examples demonstrate why the profit motive should not be the driver in places caring for the old and vulnerable, who in most cases are unable to articulate what was being done to them. Nationalize these places, and let local authorities run them on behalf of the taxpayer.   The market is not always best.

 

Dr Adnan Al-Daini took early retirement in 2005 as a principal lecturer in Mechanical Engineering at a British University. His PhD in Mechanical Engineering is from Birmingham University, UK. He has published numerous applied scientific research (more...)
 

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In today's (10-June-2011) British Guardian Pete... by Adnan Al-Daini on Friday, Jun 10, 2011 at 9:39:17 AM