Social care: Cross purposes
Strenuous efforts are being made in Whitehall – and the City – to ensure the survival of the country's biggest provider of residential care
Southern Cross, the troubled social care provider, posted half-yearly results yesterday that have implications far beyond the pockets of its investors, or even the 31,000 residents of its 750 care homes, and the staff who work in them, for whom the future is alarmingly uncertain. Strenuous efforts are being made in Whitehall – and the City – to ensure the survival of the country's biggest provider of residential care. If its pre-tax losses of over £300m were to translate into collapse, it would raise fundamental questions about the viability of both private provision and localised commissioning.
Since the 1990s the private sector has come to dominate adult social care: 95,000 council beds have gone, replaced by 110,000 in private care homes. Big businesses like Southern Cross have been outriders of the smaller state and the purchaser-provider split. The results are not all bad: there may be something fundamentally unattractive about services for society's most elderly and vulnerable being described by business analysts as "the dementia offering" or "the private pay market", but what really matters is the quality of care and whether it is efficiently provided. The safeguarding of the former is not perfect, but at least there are clear statutory obligations. In contrast, there are no controls on the way the private sector runs its finances, nor any national failure regime to pick up the pieces. Local authorities choose on price, with no kind of health check on the business itself, and using calculations that are as much about how much and how many places each council can afford in hard-pressed times as they are about what the service costs and who needs it. This year they will pay on average £521 a week for something Southern Cross says is costing it £558. That may be because Southern Cross has made some curious business decisions such as selling off its properties and leasing them back at rents that only made sense during the property boom. The GMB, the union that represents most care workers, reckons that adds £60 per place per week to its costs. That is remarkably close to the difference between viability and failure. Yet in some regions Southern Cross is so dominant in care home provision that its failure would put acute strain on local authorities, which may find themselves required to rediscover management skills they thought they would never need again. If it meant closing homes, then for some residents it could be fatal.
Southern Cross will in the end almost certainly be too big to be allowed to fail. Meanwhile the architects of health service reform should reflect on the perils of private provision, the weaknesses of localism and the indispensability of national frameworks.
Since the 1990s the private sector has come to dominate adult social care: 95,000 council beds have gone, replaced by 110,000 in private care homes. Big businesses like Southern Cross have been outriders of the smaller state and the purchaser-provider split. The results are not all bad: there may be something fundamentally unattractive about services for society's most elderly and vulnerable being described by business analysts as "the dementia offering" or "the private pay market", but what really matters is the quality of care and whether it is efficiently provided. The safeguarding of the former is not perfect, but at least there are clear statutory obligations. In contrast, there are no controls on the way the private sector runs its finances, nor any national failure regime to pick up the pieces. Local authorities choose on price, with no kind of health check on the business itself, and using calculations that are as much about how much and how many places each council can afford in hard-pressed times as they are about what the service costs and who needs it. This year they will pay on average £521 a week for something Southern Cross says is costing it £558. That may be because Southern Cross has made some curious business decisions such as selling off its properties and leasing them back at rents that only made sense during the property boom. The GMB, the union that represents most care workers, reckons that adds £60 per place per week to its costs. That is remarkably close to the difference between viability and failure. Yet in some regions Southern Cross is so dominant in care home provision that its failure would put acute strain on local authorities, which may find themselves required to rediscover management skills they thought they would never need again. If it meant closing homes, then for some residents it could be fatal.
Southern Cross will in the end almost certainly be too big to be allowed to fail. Meanwhile the architects of health service reform should reflect on the perils of private provision, the weaknesses of localism and the indispensability of national frameworks.
Middle East: Obama weaves an uncertain path
The US is not on the side of reform if to be so collides with a core strategic interest
It was billed as a big speech on the Middle East, the assumption being that if you are the president of the United States and you devote 45 minutes to the topic, the course you set will axiomatically influence events on the ground. This is even less the case than it ever was. Barack Obama promised a new beginning to the Arab world in a speech in Cairo two years ago. He called for a new relationship with the Arab world and for Israeli settlements to stop, and nothing happened. Millions of Egyptians and Tunisians rose up against their dictators, and something did.
It continued to happen on Sunday when thousands of Palestinians left their refugee camps in Lebanon and marched on the Israeli border. Yes, it suited the embattled Syrian dictator Bashar al-Assad to play the Palestinian card by allowing a group of 200 to rush the barbed wire on the Golan Heights. But no, this was not merely manipulation. It turned out to be a commemoration of Nakba Day unlike any other, and one in which the barbed wire of the Israeli border temporarily lost its deterrent value. In Cairo thousands gathered outside the Israeli embassy to demand the expulsion of the ambassador, the first time this has happened in living memory. The era of speeches and summits may have passed. It is what happens on the ground that once again has the power to reshape the region.
Mr Obama's attempts to sketch a narrative which wove a line between America's past role in the Middle East and its future, which distinguished between the dictators of countries that merited western military intervention, such as Libya, and those like Syria that did not – and his claims that US pressure is curbing the repressive actions of allies in Bahrain and Yemen – were singularly unconvincing. The US is not on the side of reform if to be so collides with a core strategic interest. America and the IMF's financial help for Egypt and Tunisia is to be welcomed, as is Mr Obama's support for free elections no matter who is brought to power. But money of itself will not be transformative and, as billions of US dollars were spent in propping up the Egyptian army under Mubarak, Egyptians have seen this all before.
It is at the point where the Arab spring intersects with the region's core conflict that attempts to reset the course of US policy are most problematic. Mr Obama held one uncomfortable welcoming card out to the Israeli prime minister, Binyamin Netanyahu, whom he will meet today: the statement that the borders of Israel and Palestine should be based on 1967 lines with mutually agreed swaps. As this involves bigger concessions on settlements than either he or his centrist predecessor Ehud Olmert were prepared to contemplate, Mr Netanyahu has been desperate to expunge any mention of 1967 from a statement that lays out the parameters of an agreement on borders. But in other respects Mr Obama held a line that had already been frequently breached. He set his face against the declaration of statehood sought by Palestinian president Mahmoud Abbas at the UN in September, saying symbolic acts to isolate Israel would not create an independent state. He dismissed the reconciliation between Fatah and Hamas, which he said raised profound and legitimate questions for Israel.
The leaders of Fatah and Hamas were obliged to reconcile by the forces stirring the Palestinian street. The negotiators of Fatah had stopped negotiating, and the fighters of Hamas had stopped fighting. Both had to respond to a simple idea: if one million Egyptians can fill Tahrir Square demanding Palestinian rights, why can't Palestinians, who taught the Arab world how to mount insurrections, and mounted two intifadas of their own? This will create its own reality as the months pass. Mr Obama was right to say that the status quo is untenable. He has yet to see how many aspects of his policy maintain it.
It continued to happen on Sunday when thousands of Palestinians left their refugee camps in Lebanon and marched on the Israeli border. Yes, it suited the embattled Syrian dictator Bashar al-Assad to play the Palestinian card by allowing a group of 200 to rush the barbed wire on the Golan Heights. But no, this was not merely manipulation. It turned out to be a commemoration of Nakba Day unlike any other, and one in which the barbed wire of the Israeli border temporarily lost its deterrent value. In Cairo thousands gathered outside the Israeli embassy to demand the expulsion of the ambassador, the first time this has happened in living memory. The era of speeches and summits may have passed. It is what happens on the ground that once again has the power to reshape the region.
Mr Obama's attempts to sketch a narrative which wove a line between America's past role in the Middle East and its future, which distinguished between the dictators of countries that merited western military intervention, such as Libya, and those like Syria that did not – and his claims that US pressure is curbing the repressive actions of allies in Bahrain and Yemen – were singularly unconvincing. The US is not on the side of reform if to be so collides with a core strategic interest. America and the IMF's financial help for Egypt and Tunisia is to be welcomed, as is Mr Obama's support for free elections no matter who is brought to power. But money of itself will not be transformative and, as billions of US dollars were spent in propping up the Egyptian army under Mubarak, Egyptians have seen this all before.
It is at the point where the Arab spring intersects with the region's core conflict that attempts to reset the course of US policy are most problematic. Mr Obama held one uncomfortable welcoming card out to the Israeli prime minister, Binyamin Netanyahu, whom he will meet today: the statement that the borders of Israel and Palestine should be based on 1967 lines with mutually agreed swaps. As this involves bigger concessions on settlements than either he or his centrist predecessor Ehud Olmert were prepared to contemplate, Mr Netanyahu has been desperate to expunge any mention of 1967 from a statement that lays out the parameters of an agreement on borders. But in other respects Mr Obama held a line that had already been frequently breached. He set his face against the declaration of statehood sought by Palestinian president Mahmoud Abbas at the UN in September, saying symbolic acts to isolate Israel would not create an independent state. He dismissed the reconciliation between Fatah and Hamas, which he said raised profound and legitimate questions for Israel.
The leaders of Fatah and Hamas were obliged to reconcile by the forces stirring the Palestinian street. The negotiators of Fatah had stopped negotiating, and the fighters of Hamas had stopped fighting. Both had to respond to a simple idea: if one million Egyptians can fill Tahrir Square demanding Palestinian rights, why can't Palestinians, who taught the Arab world how to mount insurrections, and mounted two intifadas of their own? This will create its own reality as the months pass. Mr Obama was right to say that the status quo is untenable. He has yet to see how many aspects of his policy maintain it.
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