Leading article: The elderly and vulnerable must be protected at all costs

Care homes are not ordinary businesses that can safely be allowed to go bust

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The signs point to a care crisis. BBC's Panorama this week exposed the horrendous abuse of people with learning difficulties at Winterbourne View, a private care home in Bristol. Meanwhile, Southern Cross, which runs 750 elderly care homes, has lurched deeper into financial turmoil. Southern Cross has told its landlords that, unless it is permitted to reduce its rent payments, insolvency looms. Should the landlords refuse to do a deal, tens of thousands of frail elderly people could face homelessness.

Some will draw the conclusion from these two tales that the use of private companies to provide care for the old and vulnerable has been a terrible mistake and that the state should take control of these essential services. But the assumption that state care homes are the answer is a dangerous one.

Abuses of disabled people in the government-run institutions of the past were common. Indeed rampant mistreatment of residents was one of the reasons those places were closed. Private homes, which tend to be smaller, are often better environments for the disabled than the vast state warehouses of old. And the same is true of private care homes for the elderly. The general quality of the remaining state homes is no better than private ones.

Moreover, there is not the money for the re-nationalisation of these services, even if that was desirable. As we report today, councils are reducing their funding for private care home places savagely, as they pass on the cuts handed down to them from the centre.

So what is the way out of this crisis? First there needs to be some official recognition that care homes are not ordinary businesses which can be allowed to go bust, or left alone to run their affairs. Care homes are too socially important to fail. No government can allow hundreds of elderly people to be put out on to the street because their private care home has gone out of business. It would have to step in and take over the institution. If it comes to it, that will be the fate of Southern Cross.

And that implicit state backstop means private care homes need to be subject to tighter financial regulation so they do not get into the sort of trouble in which Southern Cross finds itself. There also needs to be stricter state supervision of private care homes to make sure that the kind of appalling treatment inflicted on the residents of Winterbourne View is not repeated. It is disgraceful that the Care Quality Commission was alerted to the abuse at that institution by a whistleblower at the same time as the BBC, but failed to do anything about it. And lax supervision seems to be a systemic problem. Too many elderly care homes have been permitted to get away with cutting costs in recent years by economising on care for residents.

All this should be a reality check for those in the Government who assume that greater private-sector involvement in the provision of public services is a panacea. Private firms undoubtedly have a role to play in providing competition and choice for families and patients. But ultimately it is the state that must guarantee the quality of care.

Yet the care funding crisis is the hardest challenge. Here there are no simple answers. Extracting more from the general taxpayer is inevitable, yet it can only be part of the solution. Some way needs to be found to monetise the assets of the wealthy elderly (in particular their property assets) to fund their care in old age. The problem is that tapping wealth in this manner can have the undesirable effect of discouraging saving.

The Coalition has tasked a commission, chaired by the economist Andrew Dilnot, with drawing up plans to solve the problem. It is due to report next month. Of one thing we can be sure: whatever the Dilnot commission produces will be the start of the debate about funding care for the vulnerable, not the end.

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