Blog | Angela Gifford

Lessons Learnt from the UK Care System


Presentation given by Angela Gifford at the Consumer Directed Care Conference in Melbourne on 3rd December 2013

Consumer Directed Care for the majority of older people in the UK first began in 1988, but CDC had actually been around much earlier but only for those older people and their families who did not wish to enter the State system .i.e. have contact with social services.

At this time in the UK the State provided and paid for home care and had the majority of aged care facilities.

In 1980 I began my home care company ACC. My objective was to provide a home care service which was an alternative to moving into an aged care facility. The service my company would offer would be 24/7 care, 365 days per year for as long as was needed. My clients, by definition of high net worth had made the decision that their wish was to die in their own home and that was the service I aimed to provide for them. CDC!

In 1980 ACC was one of only six FP's companies providing care outside of the State system.

It was not until 8 years later, that the UK government, led by Mrs Thatcher realised that for the State to be the provider and the paymaster of all aged care was unsustainable, it could not be afforded.

At this time in terms of finance, aged care and disability care were different. The majority of young adults, age range 18-65. Do not have high personal wealth. People over the age of 65, they have had time to accumulate wealth from various sources or may have high net worth incomes.

Mrs Thatcher's first directional change was to give young adults CDC. In 1988 the Independent Living Fund was established.

It worked in the following way. A person with a disability, health problem would be assessed as needing a level of care and funding to purchase that care would be paid to them/advocate into an independent bank account for them to purchase the required care. Care would be provided by an approved care provider but choice would be given as to which organisation you wished to use. Care could be from a few hours per week to care 24/7.

Mrs Thatcher's government. then tackled the largest cost on the public purse, Aged Care. Legislation in 1990, The NHS and Community Care Act. Quite simply said that the State would cease to be the provider of care, would buy in care services and people who could afford to pay for their care, either at home or in an aged care facility, would have to pay. Financial assessment had arrived on a national scale.

Three years was given for the implementation of this legislation. Simply put, those three years would turn the UK Care sector on its head.

The State care homes started to be sold off. Many of these were older buildings, utilitarian in many cases and FP's started to purchase them. However, new operators came into the market and built new ones, modern ones with up to date facilities, brought in new services, more luxury services, and ran them as efficient, profitable businesses. Each one trying to attract residents.

The care home market began to split into two streams:

Market 1: The aged care facilities who began to cater for the state market whereby its residents were people who had their care paid for.

Market 2: Other operators who went for the market where people would pay for their own care and the amount they could pay would depend on how luxurious and how many services came as party of the package.

The home care situation was different. Apart from a few care providers such as ACC, there were no home care providers. So in the three years to implementation of the NHS Act there was an exponential rise in the number of home care organisations who came into the market and the vast majority were FP organisations.

However, just as the aged care facility industry split into two streams, so did the home care sector.

Market 1 - The market for people who could not afford to pay for their care, for whom the state would pay was extremely large and companies who wished to provide this state paid for care were in the majority. New operators came in by the hundreds, scores of franchises were sold specifically on the basis that a profitable income could be made from state contracts.

Market 2 - The second market stream was to provide home care services to people who would pay for their care and they very quickly came to the realisation that they were customers. If they or their families were paying for their care then they would expect to quite simply be satisfied with the services they received. CDC meant that organisations who wished to provide care to this sector, had to provide quality care, quality and regular staff, would be happy to adapt and change for example care workers, if the customer requested it, had to provide flexible services, reliable services, innovative services, had to not only give value for money but had to give extra value in many, many ways. This meant competition with all other home care organisations. The competition to attract customers was the first objective and the second one was to keep your customer once you had them.

Within a few years the realisation that people who could pay for their care had a better choice of care providers demonstrated that there was discrimination between older people who were state funded and those who were not. Basically, older people paying for their care had more choice of who actually provided their care services.

The State therefore decided that older people who were state funded could have the same opportunity as young disabled adults. Quite simply if an older person or their family wished to have their care cost allocation paid directly to them in order that they could choose who provided their care, then this would be possible. The CDC options were therefore given to many more thousands of people.

Let me start with home care and the companies who came and come in to this market.

Many of the franchises that were sold, were sold to people who had no experience of care either as a provider or of working in care or related fields. They were bought by people with savings, redundancy payments, etc. by people who were sold them on the basis of getting the state sector contracts, anything from around a few score hours per week to hundreds and thousands.

Lesson 1 - Many people especially in home care came into the market with no experience.

One of the problems that soon became apparent was that many new organisations were going for the same contracts, competition was stiff, and tendering took place, contracts were usually given to the organisations that came in with the lowest price. This situation still continues today. State contracts are usually given to the organisation that puts in the lowest tender.

Lesson 2 - Stiff competition for State funded contracts.

Many organisations, franchises in particular ended up with having to look for private, fee paying clients and many did not have the skills for marketing, PR, etc and after a relatively short time, vanished.

Lesson 3 - Many organisations ceased to exist and this continues today.

Many of the franchises and new companies who were successful were unable to fulfil their contractual obligations. Reasons were several, many could not recruit enough care workers, many could not in reality provide the service for the price they had quoted, many could not manage cash flow, basically paying their care workers, business costs from a state sector that paid retrospectively to name but a few.

Lesson 4 - The reality of fulfilling the contracts won.

Home care organisations will have their care workers on zero hours contracts, pay no travel time, will accept 15 minute sessions in order to keep their contract. Contracts however, are usually of a three year duration and at the next round of tendering, may not win the contract, their staff will follow the work and their business vanishes.

Lesson 5 - Care workers follow the work.

Approx 60% of home care organisations have either all or a high percentage of their work with state contracts. This year, 2013, the rate of home care organisations going out of business is up by 27%.

Lesson 6 - Do not have all your eggs in one basket.

The UK Government has been increasing year on year the number of people who have in the past had their care delivered under a contracted home care agency or contracted aged care facility, the right to have personal payments. They then have the right to choose who provides their care and move into the CDC situation fully.

Lesson 7 - Who are the organisations which survive in home care?

The long stayers in home care, are companies such as mine, which has never had all its eggs in the state market. As a result, we have had to learn how to provide care services at market acceptable prices, to provide exactly what our customers want, to attract good care workers and to maintain both our client and our care worker bases. We have had to give extra value whilst still remaining financially attractive. We have learnt to run our organisations as efficient businesses making a profit, complying with on going legislation and ever increasing customer expectations.

Lesson 8 - Which aged care facilities survived and continue to survive?

In the first few years, most aged care facilities thrived. The state was purchasing care for its funders and fee payers went on paying for their choice of facility.

However, legislation became to drift in and many homes were found not to comply. E.g. room sizes to small, shared rooms frowned on, health and safety facilities, such as specific fire precautions, etc. Many smaller units could not afford the cost of the legislation and many, mainly the older ones, returned back to being family homes, or changed into restaurants, etc.

Lesson 9 - Currently, the survivors in aged care facilities are those which have appeal to the residents they wish to attract. Consumer Choice.

This could be because they have diversified in specialises such as dementia care. In 2013 people who have mental capacity do not wish to share a community with people with dementia. They will therefore look at aged care facilities which offer, at their time of entry, rooms which they want to live in, staff which they think they will get on with, perhaps small community spaces.i.e. small lounges for a few residents of a corridor rather than one large communal area, beauty facilities, alcohol facilities, trips out, entertainment, hobby rooms, choices of menu and an input into those menu's, visitors accommodation, etc.

Further up the financial scale, landscaped large gardens, hotel facilities, luxury fitments, lounge and bedroom, etc. the list can be long.

Lesson 10 - Any other casualties?

In 1993, many home care services and aged care facilities were run by charities. Paid and volunteer staff. Many had as part of their income, government grants. The mission statement, if these words were used in that era would have been, simply we care.

It was almost as though such organisations had the mindset of the new world not affecting them. The result was many aged care facilities either closed, remained static or as a few did, realised somewhat later that survival was at stake. These last ones, took their situation in hand, worked and grew. E.g.. Anchor Care Homes or The Leonard Cheshire Foundation.

Home care in the charitable sector almost vanished apart from the services provided by volunteers. Some geared up but mainly concentrated on the State market. As the State market has diminished, so have the organisations and many have merged to survive.

Lesson 11 - The most important lessons to take away today.

You are entering a new world, you will have to forget the past and the manner in which you operate.

CDC means, without any doubt that whether you are a FP or NFP aged care facility or an FP or NFP home care organisation that you are in the business of survival.

The co-operative approach I have noticed between many organisations here has to be forgotten. Your previous 'allies' as you may have seen them, are now, quite simply your competitors.

Your organisation has to survive and grow, there is no other choice and there will be hundreds of others who will be going for the same customers, CDC market as you are.

You need to know the cost of your care services, your break even cost and your profit margins. Knowing the cost of care you have to give value for that cost. In addition, you have to find extra value to give.

You will need to learn as an organisation how to market and promote yourselves so that your future customers can find you.

You need everyone in your organisation to be working to the same objectives, be a team that functions and delivers.

Never forget that your front line staff, your care workers are your face to your customers. Your customers want reliability of service but more importantly, all research shows, they want regular care workers caring for them. Care workers that provide them with the care they need, delivered in a way in which they want, with care workers they can engage and feel comfortable.

Treat your customers and care workers with respect. Your future as an organisation is dependent on these two factors. Without care workers you will have no customers and without customers you will have no work.

Having been in the UK care sector for over 30 years and trodden the road of CDC, know and have known hundreds of care organisations and facilities, these lessons are the result of my experience. If they offer some guidance to you, then I have achieved the objective of this presentation.


By:  Angela E Gifford
Posted:  18 Dec 2013


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