Care as a Public Good: Why Britain Must Stop the Drain on Local Communities
- truthaboutlocalgov
- 2 days ago
- 15 min read
Care in the UK: A System at Breaking Point
Care in the UK is no longer simply under pressure, it is at a structural breaking point. Local authorities now routinely spend around 70% of their entire budgets on children’s and adults’ social care. This extraordinary proportion leaves little room for anything else councils are legally expected to deliver: libraries, parks, youth services, community safety, planning, transport, culture, and the basic civic infrastructure that keeps places liveable. Even with this overwhelming share of resources funnelled into care, the system remains stretched to its limits, inequitable in its outcomes, and increasingly shaped by private profit rather than public value.
This is not a marginal issue. It is the defining challenge for local government finance, community wellbeing, and the long‑term resilience of the welfare state. And yet, for years, the conversation has been dominated by technical debates about funding formulas, efficiency savings, and “market shaping”, rather than the deeper question: why is so much public money leaving the system altogether?
A new wave of research, including work from the Centre for Thriving Places, CLES, Co‑operatives UK, and the New Economics Foundation, is finally forcing that question into the open. These organisations have collectively exposed the scale of extraction taking place within the care market: the profits, dividends, debt repayments, inflated rents, and financial engineering that quietly siphon money away from frontline support and into private equity structures, offshore companies, and complex corporate webs.
Their findings are stark. In just three regions, private care providers extracted £256 million in profit over three years, and that figure represents only what is visible in published accounts. The true scale, once hidden rents, internal loans, and debt‑financed buyouts are considered, is almost certainly far higher.
But numbers alone do not capture the human cost. In a recent conversation with Rosie Maguire, Policy and Programme Manager at the Centre for Thriving Places, the uncomfortable truth was laid bare: care has become a commodity, and the consequences are being felt in every community.
Rosie’s analysis cuts through the noise. She describes a system where the needs of older people, disabled adults, and vulnerable children are increasingly mediated through business models designed not around care, but around extraction. She highlights how the shift from public provision to private markets has created a landscape where:
frontline workers, 75% of whom are women, many from global majority backgrounds, remain among the lowest‑paid in the economy
local authorities face spiralling placement costs, sometimes rising from £40,000 to £120,000 per child per year
multinational companies can earn more from owning the building than from delivering the care
debt repayments and shareholder returns take precedence over stability, continuity, and quality
As Rosie puts it, this is not simply about profit:
“It’s more than profit… it’s extraction. It’s the process of removing, excavating, taking something out.”
And what is being taken out is not just money. It is capacity. It is dignity. It is the ability of communities to care for their own residents without being drained by financial structures designed to maximise return rather than maximise wellbeing. The result is a care system that is simultaneously the most expensive it has ever been and the least sustainable it has ever been. Councils are forced into crisis‑driven commissioning. Families face instability and inconsistency. Workers face burnout. And the public purse quietly subsidises private wealth accumulation. This is the uncomfortable truth at the heart of the debate: care has been allowed to drift from a public good to a commercial commodity, and unless that trajectory is reversed, the system will continue to fracture, no matter how much money is poured into it.
Demand is rising, but costs are rising even faster
The real crisis lies in the widening gap between what care should cost and what it does cost in the current market. As provision has shifted from local authorities to private providers, the price of placements has escalated far beyond inflation or wage growth.
Rosie offers a stark example from the research:
“We’re looking at changes from about £40,000 to some provision being £120,000 a year per child. That’s not just inflation… it’s really significant.”
These are not marginal increases. They represent a tripling of costs in some cases, without a tripling of quality, staffing levels, or outcomes. Instead, they reflect the financialised business models that now dominate parts of the sector: debt‑laden buyouts, inflated rents, and profit extraction mechanisms that have little to do with the actual cost of care.
The people delivering care are not sharing in the rising costs
Perhaps the most troubling contradiction is that while the cost of care has soared, the pay of those delivering it has barely moved. Frontline care workers, 75% of whom are women, many from global majority backgrounds, remain among the lowest‑paid workers in the UK economy. Many still earn below the Real Living Wage, despite performing emotionally demanding, physically exhausting, socially vital work.
This is the moral fault line running through the system. The money is increasing, but it is not reaching the people who provide the care. Instead, it is being absorbed by:
rising placement fees
corporate overheads
shareholder dividends
debt repayments
property‑related profit extraction
The result is a workforce under immense strain, a sector struggling to recruit and retain staff, and a system where the cost burden rises year after year while the people at the heart of care remain undervalued and underpaid.
A system stretched from both ends
The UK now faces a dual crisis:
Demand is rising because more people need care.
Costs are rising because the market extracts more money from the system.
Pay is stagnating because the financial model prioritises profit over people.
This is why local authorities are being pushed to the brink. They are not simply dealing with more need; they are dealing with a system in which the price of meeting that need has been inflated far beyond what is sustainable.
£256 Million Extracted, and That’s Just the Visible Tip
The headline figure is startling enough: across just three English regions, private care providers extracted £256 million in profit over three years. In a sector where councils are issuing Section 114 notices, closing libraries, and stripping back neighbourhood services to keep statutory care afloat, that number is not merely uncomfortable, it is incendiary.
But as Rosie Maguire stresses, even this vast sum barely captures the true scale of what is happening:
“I would say that number… is the tip of the iceberg.”
And she’s right. Because what we traditionally call “profit” is only the most visible, most easily measured form of extraction. The real leakage, the deep, structural, systemic outflow of public money, is embedded in the financial architecture of the modern care market.
The research identifies several mechanisms through which money is siphoned away from frontline care and into private wealth.
1. Dividend payments: extraction hidden in plain sight
Dividends are the most straightforward form of extraction, yet they are often obscured in headline figures. Companies can pay dividends even when their operating profit appears modest, because the money can be drawn from other parts of the corporate group.
This means:
a care home can appear financially fragile
while its parent company quietly distributes cash to shareholders
even during periods when the state is providing emergency support
Rosie notes that during COVID, some providers received public grants to stay afloat while simultaneously issuing dividends, a stark illustration of how the system prioritises financial return over public value.
2. Complex corporate structures: the “babushka doll” model
Perhaps the most revealing mechanism is the use of layered, interlinked companies, what Rosie calls the “babushka doll” arrangement:
“One business buys the building and the other business owns the services and then pays rent to that first business at a profitable rate.”
This structure allows money to be extracted through inflated rents rather than through service fees. It means:
the care home operator can claim to be barely breaking even
while the property‑owning sister company generates substantial profit
which then flows to investors, often offshore
This is not inefficiency. It is design. A deliberate model that treats care homes as financial assets rather than community infrastructure.
3. Debt‑financed buyouts: the Four Seasons warning
The collapse of Four Seasons Care Homes remains the most notorious example of what happens when private equity logic is applied to social care. Each time the company was sold, it was loaded with more debt, debt that had to be serviced through the fees paid by local authorities.
Rosie summarises the problem with devastating clarity:
“That new business has to then pay the debt back with interest… and that’s nothing to do with frontline delivery.”
Debt repayments do not improve care. They do not raise wages. They do not stabilise the workforce. They simply transfer public money into the hands of lenders and investors.
This is financial engineering masquerading as social provision.
4. Offshore ownership: opacity as a business model
Many of the largest care providers are ultimately owned in tax havens. This makes transparency almost impossible. Councils commissioning services cannot easily determine:
who ultimately owns the company
how much profit is being extracted
where the money is going
what risks sit within the corporate structure
This opacity is not incidental. It is a feature of a system designed to minimise scrutiny and maximise extraction.
The result: money intended for care is diverted into financial engineering, not community wellbeing
When you combine these mechanisms, dividends, rent extraction, debt servicing, offshore ownership, the £256 million headline figure becomes symbolic rather than definitive. It represents only the portion of extraction that is visible, measurable, and publicly reported.
The true scale is almost certainly far higher.
And the consequences are profound:
less money for frontline staff
higher placement costs for councils
greater instability for vulnerable people
a workforce trapped in low pay despite rising fees
communities drained of wealth that should circulate locally
This is the uncomfortable truth at the heart of the research: the care system is not simply underfunded, it is being hollowed out. Public money is flowing not into better care, but into financial structures designed to extract value from some of the most vulnerable people in society.
The Human Impact: A Workforce We Don’t Value
Behind every statistic in the care system sits a human being, someone bathing, feeding, comforting, advocating, and holding the emotional weight of another person’s vulnerability. Yet, as Rosie Maguire puts it with disarming clarity:
“As a society we do not value care work.”
It is a statement that cuts through policy jargon and lands squarely on the truth. Despite being the people who support us at the most fragile moments of our lives, when we are ill, ageing, grieving, or in crisis, care workers face a combination of pressures that would be unthinkable in any other essential profession:
Low pay, often below the Real Living Wage
High turnover, driven by burnout and financial insecurity
Limited progression, with few structured pathways into senior roles
Poor recognition, both socially and institutionally
This is not an accidental outcome. It is the predictable result of a system that treats care as a cost to be contained rather than a public good to be invested in.
A sector built on emotional labour, but rewarded with poverty wages
Care work is emotionally demanding, physically exhausting, and socially vital. Yet it remains one of the lowest‑paid sectors in the UK economy. Many workers juggle multiple jobs, rely on Universal Credit, or work unpaid overtime simply to keep services running.
The injustice becomes even starker when contrasted with the salaries at the top of the private care market. Senior managers in large chains routinely earn six‑figure salaries, even in years when the state is providing emergency financial support.
Rosie highlights the contradiction:
“There was some terrible statistics… about management salaries during COVID and the amount of dividends that went out.”
During a national crisis, when care workers were risking their health, isolating from their families, and in some cases losing their lives, some corporate owners were still extracting dividends. The people delivering the care were applauded on doorsteps; the people extracting value were rewarded in boardrooms.
A distorted labour market now undermining the public sector
This imbalance is no longer confined to private providers. It is now reshaping the entire labour market for care. Councils report increasing difficulty recruiting managers and senior practitioners because private companies can simply outbid them.
The consequences are profound:
Public sector leadership pipelines are weakening
Local authorities struggle to retain experienced staff
Commissioning expertise is lost to the private market
The imbalance of power between councils and providers grows
In effect, the public sector is being priced out of its own workforce.
A workforce undervalued, yet indispensable
The irony is painful: the people who hold the system together are the ones who benefit least from it. Care workers are the backbone of community wellbeing, yet they are treated as an expendable resource. Their labour is essential, but their value is systematically suppressed.
This is not simply a workforce issue. It is a moral issue. A societal issue. A political issue. And as Rosie’s research makes clear, it is a structural issue, one that cannot be solved by goodwill alone.
Until we confront the fundamental imbalance between those who deliver care and those who profit from it, the system will continue to fracture, no matter how much money is poured in.
What Would a Community‑Strengthening Care System Look Like?
If the current model of care is defined by extraction, opacity, and financial engineering, then any meaningful alternative must begin from a fundamentally different place. For Rosie Maguire, the starting point is not technical, nor financial, nor bureaucratic. It is moral.
“We need to ground it in dignity.”
That single word, dignity, reframes the entire conversation. It shifts the focus from contracts and cost pressures to people, relationships, and the values that should underpin a civilised society. A community‑strengthening care system is not simply a more efficient version of what we have now; it is a system built on different assumptions about what care is, who it is for, and how it should function. Rosie outlines several pillars that such a system would rest upon.
1. Changing the language: from labels to humanity
Language shapes policy. It shapes culture. It shapes how we see one another. Yet the language of the current system is often dehumanising. Terms like “bed blockers” reduce people to logistical problems rather than human beings with needs, histories, and rights.
A community‑strengthening system would reject this framing. It would:
speak about people, not processes
emphasise dignity, not delay
recognise that care is not an inconvenience but a societal responsibility
Changing the language is not cosmetic. It is foundational. It signals what, and who, we value.
2. Recognising care as relational, not transactional
One of Rosie’s most important insights is that care is not a commodity. It is not a service that can be efficiently “delivered” like a parcel. It is inherently relational, a human interaction built on trust, empathy, and continuity.
A community‑strengthening system would:
prioritise stable relationships over short‑term placements
value emotional labour as much as technical tasks
design services around people, not profit margins
This shift challenges the logic of the marketised model, which treats care as a series of billable units rather than a web of human relationships.
3. Rebuilding accountability: knowing where the money goes
Rosie argues that local authorities should be able to look residents in the eye and say:
“This is the best we can do.”
At present, that is often impossible. The opacity of private ownership structures means councils cannot always see where public money ends up. Without transparency, there can be no meaningful accountability.
A community‑strengthening system would require:
clear reporting on ownership and financial flows
open books for providers receiving public funds
commissioning frameworks that reward reinvestment, not extraction
Accountability is not about blame. It is about trust, and trust cannot exist in the dark.
4. Growing local, non‑extractive provision
Rosie highlights the crucial role of combined authorities, regional economic strategies, and local industrial policy in reshaping the care landscape. Care is not just a service; it is part of the foundational economy, the everyday infrastructure that keeps society functioning.
She asks a vital question:
“How can we support and grow local co‑ops, local organisations… ideally those that are not profit maximising?”
A community‑strengthening system would:
nurture local co‑operatives, social enterprises, and community‑owned providers
keep wealth circulating locally rather than leaking to tax havens
create good, stable jobs rooted in place
embed care within local economic development strategies
This is not anti‑business. It is pro‑community.
5. National leadership: setting the moral and regulatory direction
Local action matters, but national leadership is essential. Wales has already taken a bold step by banning profit extraction in children’s services. England could follow suit, or at least introduce limits on profit, debt loading, and rent extraction.
National leadership would mean:
setting clear boundaries on what is acceptable in a publicly funded care system
creating a regulatory environment that rewards reinvestment
articulating a national narrative that places dignity at the centre of care
This is not simply a policy choice. It is a statement about what kind of society we want to be.
A community‑strengthening care system is not a utopian vision. It is a practical, achievable alternative grounded in dignity, transparency, and local resilience. It asks us to reimagine care not as a market to be exploited, but as a shared responsibility, one that binds communities together rather than draining them.
Stopping the Drain: What Local Authorities Can Do Now
One of the most empowering messages in Rosie Maguire’s analysis is that councils do not need to wait for Westminster to act. While national reform is essential, there is meaningful, practical work that local authorities can begin immediately, work that costs nothing, but fundamentally shifts power back towards communities.
As Rosie puts it:
“One really concrete action… is to understand where money is going.”
This sounds simple, but in a market defined by opaque ownership structures, offshore holdings, and financial engineering, it is a radical act. Transparency is the first step in reclaiming control.
Rosie outlines several practical interventions that councils can take now.
1. Reviewing procurement frameworks: rewriting the rules of the game
Procurement is often treated as a technical process, but it is one of the most powerful levers councils possess. By revisiting procurement frameworks, authorities can:
tighten requirements around financial transparency
demand open‑book accounting for publicly funded services
embed expectations around reinvestment and fair pay
challenge the assumption that the lowest price equals best value
This is not about adding bureaucracy. It is about ensuring public money delivers public good.
2. Mapping ownership structures: seeing the system clearly
Many councils commission services without fully understanding who ultimately owns the provider. In a sector where companies can be nested inside one another, the “babushka doll” model Rosie describes, this lack of visibility is dangerous.
Mapping ownership structures allows councils to:
identify providers linked to offshore entities
understand where profits flow
spot patterns of debt loading or rent extraction
assess financial risk before awarding contracts
Knowledge is power, and in this case, it is also protection.
3. Setting social value requirements: redefining what ‘value’ means
Social value is often treated as a tick‑box exercise, but it can be transformative when used with intent. Councils can require providers to demonstrate:
fair pay and good working conditions
reinvestment in local communities
ethical governance
commitments to workforce development
contributions to local economic resilience
This reframes care not as a commodity, but as part of the social and economic fabric of a place.
4. Prioritising local, ethical providers: keeping wealth in the community
Rosie emphasises the importance of nurturing local, non‑extractive organisations, co‑operatives, social enterprises, community‑owned providers, and ethical SMEs. Prioritising these organisations helps to:
retain wealth within the local economy
create stable, good‑quality jobs
reduce dependency on large, extractive chains
build long‑term resilience rather than short‑term profit
This is foundational economics in action: strengthening the everyday systems that keep communities functioning.
5. Planning early for contract re‑letting: avoiding crisis commissioning
Too often, councils are forced into last‑minute commissioning because contracts expire before alternatives have been explored. Early planning allows authorities to:
shape the market rather than react to it
build relationships with ethical providers
design contracts that reflect community priorities
avoid being backed into a corner by high‑cost incumbents
This is where strategic leadership meets practical action.
These changes cost nothing, but they shift power
None of these interventions require new legislation or additional funding. They require clarity, confidence, and a willingness to challenge the assumption that the current market is inevitable.
By understanding where money goes, demanding transparency, and prioritising community‑rooted provision, councils can begin to reverse the flow of extraction. They can start to rebuild a care system that strengthens communities rather than draining them.
This is not a waiting game. It is a moment for local leadership, and the tools are already in their hands.
A System at a Crossroads
The care system in the UK has reached a point where incremental fixes are no longer enough. The pressures are too great, the financial model too distorted, and the human cost too high. As I put it during the conversation with Rosie Maguire:
“Care in the UK is at breaking point… and profit is flowing to private equity and tax havens.”
This is not rhetoric. It is a sober assessment of a system that is being hollowed out from within. If we continue along the current trajectory, the consequences are entirely predictable:
More public money will leak out of local economies, diverted into opaque corporate structures rather than reinvested in communities.
More care workers will burn out, pushed to breaking point by low pay, high pressure, and chronic understaffing.
More families will struggle to access support, facing long waits, inconsistent provision, and rising thresholds for help.
More councils will face financial crisis, forced to choose between statutory duties and the wider fabric of community life.
This is the crossroads. One path leads to deeper fragmentation, greater inequality, and a care system that becomes increasingly transactional, unstable, and extractive.
But the other path, the one Rosie and her colleagues are pointing towards, is entirely within reach. It is the path of a care system that strengthens communities rather than draining them. A system grounded in dignity, transparency, and local resilience. A system where public money circulates locally, where care workers are valued, and where the purpose of care is not profit, but wellbeing.
The choice is not abstract. It is immediate, practical, and political. And it begins with people coming together to demand, and design, something better.
How to Stay Involved
Rosie is clear that change will not come from reports alone. It will come from connection, collaboration, and collective courage. She puts it beautifully:
“We’re more interested in supporting people to find each other, share good practice, and build up that courage that we can do things within the current system.”
This is an invitation, not just to understand the problem, but to be part of the solution.
Practitioners, councillors, commissioners, community leaders, and sector partners all have a role to play. The four organisations behind the research, the Centre for Thriving Places, CLES, Co‑operatives UK, and the New Economics Foundation, will be hosting further webinars, discussions, and learning sessions throughout the year. These spaces are designed to:
connect people facing similar challenges
share practical tools and examples
build confidence to act locally
explore what non‑extractive care models look like in practice
strengthen the movement for a fairer, community‑rooted care system
