An investigation into the five biggest firms providing homecare services in the UK has found millions of pounds has been paid to some owners amid a crisis in standards of care.
An analysis of published reports from the Care Quality Commission, the care regulator for England, reveals that of the 192 domiciliary care services run by major companies, and inspected over the last two years, 80 were found to “require improvement”, with eight found to be “inadequate” and placed into special measures.
In services rated inadequate, people were found to be unwashed, unfed, unable to get out of bed and left at risk of harm. In some cases, medicine was not given on time or safely and services were described as unsafe and short-staffed. Yet, in the past five years, an analysis of care records and company accounts by Corporate Watch reveals evidence of £36m being paid to owners, with a further £34m in liabilities being stacked up in company accounts.
The revelation follows an announcement last week by the Competition and Markets Authority that it was launching an investigation into the sector, after concerns were raised about unfair practices and high bills.
Corporate Watch’s investigation reveals that the care firm City & County Healthcare paid out £4.5m in the form of interest on loans during the last five years to its former owner, Sovereign Capital.
A spokesman for Sovereign said: “The investment and support from Sovereign Capital helped City & County to continue to care for people in their homes and grow as a responsible and successful care provider. The loans referred to were subordinate to the company’s bank loans and were agreed on normal commercial terms.”
Sovereign sold the business on to another private equity house in 2013. That firm, Graphite Capital, has accumulated £17.1m in interest on shareholder loans, which are due to be paid out by the firm through the Channel Islands, should the company be sold.
CQC inspections into 48 City & County branches over the last two years found that 24 were rated as “requiring improvement”, while two were found to be “inadequate” and put into special measures.
A spokesman said Graphite had “received no income or interest payments, or proceeds of any kind, from its investment in City & County”. The company said that Corporate Watch’s analysis incorrectly included services that had been recently closed. The spokesman said that inspection reports yet to be published should also be included in the analysis, adding: “Of our 47 registered sites in England, 33 have been inspected by CQC in 2016 and 21 of those have been rated ‘good’.
“CQC has re-inspected eight of our sites that were previously rated ‘require improvement’ in the last 12 months. Seven of these show a significant improvement, with six now rated ‘good’,” he added.
The care firm Sevacare has also paid out £4.9m to its owners in rent and dividends, principally to its founder, Ravi Bains and his family, over the last five years. Bains was additionally paid £410,000 in 2015 for his role as chief executive and chairman.
Some 17 homecare workers employed across the London Borough of Haringey, backed by their union, Unison, are taking the company and the council to court in a dispute over alleged non-payment of the minimum wage. The case, which is being contested, is over an alleged failure to pay staff a legal wage, as time spent travelling between people’s houses was unpaid.
Inspections by CQC into 36 of Sevacare’s branches over the last two years found 14 rated as “requiring improvement” and one as “inadequate”.
A spokesman for Sevacare said the analysis of homecare services had excluded “the extra care scheme locations” where clients live in communal homes. She said: “We aim to provide the best care possible and we continually review our procedures to ensure that the care we give meets the high standards we set ourselves.”
Meanwhile, the firm Carewatch has built up a pot of £17.1m in interest on shareholder loans which could in future be paid through an offshore financing scheme to investment fund Lyceum Capital, where the chairman of the supervisory board is former Lehman Brothers banker and Tory donor Philip Buscombe. There is no suggestion such a payment will be made and the private equity firm and its partners have invested over £45m into Carewatch and so far not extracted any funds.
Inspections by CQC into 20 of Carewatch’s wholly owned English branches over the last two years, however, found 11 “require improvement” and nine were “good”, although the firm’s franchises performed better.
Meanwhile, care firm Mears Care, which made a loss last year and received an inter-company credit of around £27m in 2015, has paid out £15.8m to its parent company Mears Group over the last five years.
Mears bought Care UK’s homecare business in 2015. Before that, the business had paid out £10.9m to Care UK, which is owned by European investment fund Bridgepoint Capital. Almost three-quarters of its branches inspected by CQC over the last two years were rated as “good”. But another 11 “require improvement” and the Torbay branch was “inadequate” and placed into special measures.
Finally, private equity group Acromas Holdings has not extracted anything from its Allied Healthcare business, accounts suggest. However, around half of the 45 Allied services assessed by CQC in the last two years have been rated as requiring improvement or worse. Allied Healthcare and Mears Care declined to comment.