Monday, 17 April 2017

Proud to live in Derbyshire .............

I want to be a bit more positive with this post because the subject of care for the elderly is a serious matter and should be way above political skirmishing. If by some miracle BelperStuff was asked to create a UK Bill of Rights then respect, love and care for the elderly would be up near the top of the list. I do not understand how anyone who is elected to power can even contemplate cutting the funding that underwrites services for the elderly in their own homes or the provision of facilities such as care homes and day centres ............... yet we have a Conservative government who have been cutting grants to councils who then have to decide which departments will bear the brunt of underfunding. In this respect the Labour controlled Derbyshire County Council have done an amazing job of shielding adult social care from the harshness of these Tory cuts.

Proud to live in Derbyshire

Last year BelperStuff attended a meeting of senior care providers, member's of parliament, academics and journalists to discuss the deterioration in social care to all age groups and the predominant theme was the plight of the elderly. Frontline care workers spoke from the floor of their daily struggle to look after their charges; the lack of resources, the gradual loss of staff who had to care for an increasing number of people ............. I'm sure you've heard this litany before. I was struck by their compassion but also the feeling of helplessness in the face of impossible odds. It was abundantly clear that this same frustration was felt by all care providers as senior managers and even those at the helm of regional and national care organisations spoke of the crisis that was already upon us.

When I spoke from the floor about Derbyshire County Council and their fight to keep care homes in council hands the meeting burst into applause. Let there be no mistake about this, despite what Derbyshire Tories claim, Labour have performed brilliantly in maintaining a level of services that are seen as an example to follow by other authorities.

Barbara Keeley MP
The keynote speaker was Barbara Keeley MP, the Shadow Minister for Mental Health and Social Care. Looking back at my notes I see that her main points were:

  • We need an extra 275,000 care workers
  • 191,000 care workers are from the EU
  • £5 billion has been taken out of social care by the Tories in the last 6 years (remember she was speaking in 2016)
  • 26% less people receiving care from care system as a result of these cuts
  • 1 in 7 unpaid carers are over 80
  • 417,000 people providing care are over 80.
Her passionate closing remarks were:

"Why is there no outcry about this?"

"Now is the time to be outraged".

Thinking about it, why didn't BelperStuff make a report about this meeting back in 2016? I apologise.

So what is happening in Derbyshire?

I can already feel the urge to plunge straight into a critique of the Tory manifesto but first I'll speak about Labour:


Labour regained control of the DCC in 2013 and promptly squashed the outgoing Tory plans to close DCC run care homes and enter into contracts with private providers. Despite cuts in funding (£13 million less per year for care services from central government) Labour have increased the amount in the budget for care; the amount spent per head of population for Adult Care rising from £250 in 2016/17 to £268 in 2017/18 and Children's Services from £115 to £117. Obviously this has to be funded and a combination of shifting money from one pot to another plus an increase in council tax has had to adopted ((can be found here online).

Reading from their council tax leaflet,  I see that Adult Care is provided to almost 17,000 older, vulnerable and disabled people and supports 21,000 carers across Derbyshire. Nearly 1,000 home care staff, 2,200 residential and day care staff and teams in hospitals supporting NHS colleagues, helping people to be discharged into the community.

There are 22 residential homes and community care centres including specialist care for people with dementia and commissions 215 schemes which support people to live independently; with 1,254 minor adaptions and nearly 131,000 pieces of equipment worth up to £8.25 million.

John Owen enjoys a cup of tea when visiting the Ada Belfield
There are of course other schemes such as the new care home being built in Belper to replace the Ada
Belfield, from 26 rooms with shared bathrooms to a modern 40 en suite room facility in Derwent Street (I cannot resist making the point that Belper Town Council - 16 Conservatives - has been opposed to this scheme right through the planning process but it was finally passed last week after an intervention by John Owen at the AVBC planning meeting).
BelperStuff visited the Ada Belfield care home late last year with John Owen, County Councillor for Belper and we found real enthusiasm from both staff and residents for the move. (John is pictured opposite, chatting over a cuppa with staff and residents - but I forgot to ask permission to use a photo of them on the internet so I've cropped them out - sorry).

What do the Tories propose?

We are back to the Tory manifesto but this time leavened with comments from the Amber Valley Tory website. The salient points are:

  • Restart our £30m Care Programme to provide new modern care homes - scrapped by Labour
  • Derbyshire Conservatives implemented a self financing building programme that would have provided new homes for older people across the county. We agreed to invest £30m in partnership with housing associations and the private sector. Savings on the running costs of former old people's homes would have paid the debt charges on our £30m contribution. 
This is a PFI scheme and I am mindful of  a report by the National Audit Office in 2011 which was critical, finding that the use of PFI "has the effect of increasing the cost of finance for public investments relative to what would be available to the government if it borrowed on its own account" and "the price of finance is significantly higher with a PFI"(see here for that report).

By cutting funding from central government the burden is shifted to council tax payers; compounded by ill thought out privatisation which inevitably costs more.

There is of course nothing wrong in principal with housing associations providing care services (as long as they use properly trained staff and pay them a decent wage) but I am fearful of finance deals that might be involved. I recently talked with a director of a local housing association who told me that their financial backers were looking for an 11% return on their investment. One has to ask who would be paying that 11% if those same investors were involved in the Tory scheme and the answer is Derbyshire County Council.

An example of a PFI scheme in Amber Valley

We also have an example of a Tory PFI scheme in Amber Valley where the borough council signed up with DC Projects (Amber Valley) Ltd in 2009 with what seems to be a 31 year contract involving the refurbishment/building/management of three leisure centres in Alfreton, Heanor and Ripley. A quick look at the financial outturn of this project in 2016 (Amber Valley Borough Council Statement of Accounts 2015/16 - turn to pages 104 and 105) and we find that during the remaining 25 years there will be service charges of £18.85m (subject to inflation), repayment of finance liability of £18.262m, finance interest of £25.189m which comes to a total of £62,301,000. So the total cost of the project is that last sum plus whatever else has been paid between 2009 and 2015/16. Unless they had a payment holiday in these initial years then the total project will probably come out somewhere over £74 million given that the annual payment for 2016/17 alone is £2,614,000. The finance charge would seem to be around 8.32% which doesn't look like a very sharp deal when we compare it to the £22m AVBC holds in a variety of bank accounts that are earning on average less than 1%.

A mitigating factor is that the leisure centres generate revenue but how much of this is passed back to the council is not very clear in the accounts.

So what could the Tory PFI scheme for Derbyshire care homes look like

Given that this is an example of the sort of PFI that Derbyshire Tories have entered into (the leader of Amber Valley Tories is Kevin Buttery and he is standing for the county council in the Horsley division) it would not be too much of a stretch to imagine that the £30 million that they want to tie up to their  "self financing" care home scheme would be in many respects similar. If we assume that the finance charges will be comparable then the cost of finance over say, 30 years would be nigh on £52m so the much vaunted "self financing" scheme would entail each care home contributing an annual saving of £100k. The £30 million investment would, we are told, be matched by a minimum of £100 million from private investors so if they also expect a return of 8.32% the total saving per care home would have to be in the region of £600k per year resulting in a net reduction to the adult care budget (for 18 homes) of  £12m. The annual cost of financing plus repayment of the loan would over 30 years amount to £354 million or nigh on £1 million per month and that, for an already squeezed budget is before we add in wages for staff and all the other ancillary costs plus maintenance.

Given that the income of these care homes is derived from payments from Derbyshire County Council such a PFI scheme, if following the AVBC Leisure Centre arrangement, would result in a payment to private investors of at least £12m per year. It would make much more sense to generate this sort of sum internally from the total DCC budget and use it as a rolling annual budget to be invested in improvements and, where necessary, new build facilities such as that in Derwent Street in Belper. Without the benefit of being fully briefed on the DCC Adult Care budget this is just a back of fag packet calculation but I would suggest that care infrastructure costs are a small proportion of the total cost when set beside that of staffing and other more general care home costs. The private sector exploits this fact by reducing wages and benefits to staff once they take over a contract.

Derbyshire Tories advocate transfer of social care to private sector as the private sector is collapsing

The warnings of Barbara Keeley are sadly being proved correct as there are an increasing number of private care home contracts being handed back to local authorities. Outsourcing care for the elderly and other vulnerable adults has become unattractive to private investors. It's those Tory government cuts again as cash strapped councils try to pass on the squeeze in funding to private contractors.


I have copied these bullet points from the BBC article:
  • An estimated 338,520 adult social care workers left their roles in 2015-16. That is equivalent to 928 people leaving their job every day.
  • 60% of those leaving a job left working in the adult social care sector altogether
  • The average full-time frontline care worker earned £7.69 an hour, or £14,800 a year. The median average UK salary last year was around £27,600 for full time workers.
  • One in every four social care workers was employed on a zero hours contract.

Tory mismanagement of social care is a disgrace

"Now is the time to be outraged"

A brief note on the method of calculation. If anyone reading this post has knowledge that would indicate that the calculations are wrong or the methodology is in any way seriously flawed then I will gladly amend what is written here. I'm not talking of comments and opinions but hard provable facts. You can make your point via the comments button at the foot of this post.

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