1 – Exploring public ownership. Is nationalisation the best model?

The Covid crisis has demonstrated the fragility of social care provision in England. Over the next few weeks (let’s hope not years) we need, as a country, to look radically at the funding and organisation of social care. And one of the issues we need to examine is the ownership model.

An obvious lesson from the crisis is the fact that when a big crisis hits important institutions in our society we need the state to stand behind them. The state needs to act as the bank of last resort whatever the short term cost. So many institutions that had previously looked strong needed state support to keep them from collapsing when the Covid crunch came.

When we look back we will see that not only the care sector is fragile, but that the same is true for nearly all other sectors of our economy. In fact, because it has continued to operate during the crisis, social care as a sector has received fewer extra resources than, for example, the hospitality or manufacturing industries. Extra money has gone in, but nowhere near as much as had to go into pay for furloughed staff in most other sectors.

By now there will be society-wide recognition that we cannot continue with such a  fragile social care system. Its organisational fragility contrasts badly with the absolute need that hundreds of thousands of families have for its services. We cannot continue with something that is both so fragile and so vital. The whole population has learned that the lives of hundreds of thousands of people depend on something that increasingly looks like it could fall apart.

The lesson we recently learned about the need for state support for all our institutions is so potent, it is inevitable that the idea of public ownership will be an important part of the debate about the future of social care.

Let’s leave aside the economics of the state buying out existing organisations for the moment. (But let’s be clear about two of those economic factors. Post Covid we will be a poorer society and it may not be a priority to spend a few billion pounds on buying the property and organisation of existing providers. Also remember that there are many small scale owners that have put their hearts and pension funds into social care businesses that must be compensated.)

Given that there will be calls for public ownership of the sector, I thought it would be useful to explore the different models that could be developed.

I’m doing this because much of the politics of public ownership in the UK sees nationalisation as the only model for ‘real’ public ownership.

In most other European countries there are many other options available –  depending on what you want to achieve by public ownership. Europe has a wide range of different models in which co-operatives, local, regional and community ownership, all play a role.

But post World War II government in Britain utilised only one model – nationalisation. In this form of public ownership the service is not just owned by the public, it is owned by the central state and run by it nationally from London. What accountability exists is through a national Board linked to a Minister.

This conflates a number of very different issues.  It’s true that some people believe it is wrong that profit should be made for private gain from a number of services. In this country the majority see health as being one of them.

The argument is that public  ownership prevents resources going to shareholders (or in the case of some care homes – to hedge funds).

Others feel – and following the Covid crisis there will be many who view social care in this way – that private enterprise cannot guarantee the absolute necessity that these services are provided. The profit motive will ensure social care continues only insofar as there is sufficient revenue to make a profit out of it and (in the case of residential care) for as long as the property market holds up. If in the next two years the property market were to collapse by say 30% many residential care providers would be bankrupted, and those much needed services would disappear.

However a service sector does not have to be owned by the central state to ensure public ownership. Other forms of public ownership can ensure resources are not leaked to hedge funds and at the same time ensure future stability.

There are however those on the left who are not at all interested in models of public ownership. They do not believe in any other model save nationalisation. They specifically want services to be  owned – and run – by the state. They believe much more in the centralising power of the state than in the concept of public ownership.. Centralised state control is what matters most to them.

And in our sector they have a vital example. The NHS is a nationalised industry. It is financed from national taxation and is responsible mainly to central government. Local government – as we have seen in recent weeks – holds no sway whatsoever about what the NHS actually does.

Some will see the NHS experience of the Covid crisis as a classic example of why this is a good thing. The NHS command and control system drove the improvement in the number of ICU beds and, after a period of time, it worked.

That’s actually a really good example of why managing the national organisation of high-need acute beds in our hospitals is a really good idea. However, contrary to what some may believe, organising the provision of ICU beds is not the same as organising a national health service.

Central control works well for a small (but significant) part of the NHS.  But not for the rest – and that is more important.

If, for example, the discharge of patients from hospital had been carried out with equal knowledge and empathy for the needs of local social care organisations as for the need to clear NHS beds, untested patients would not have been discharged into care homes. The NHS needed to clear beds and central control ‘got’ that. What it needed was an equal input from localities in the process.

Of concern too is the two-thirds of work the NHS does with people with long-term conditions. The last few years have shown us that Whitehall (or the Elephant and Castle) is not in a position to tell district nurses, primary care nurses and social care workers how to help manage people with long-term conditions. To do that requires local knowledge and empathy which the centre simply does not have.

If we nationalised social care, there would immediately be problems arising from how you make a national system fit the diverse interests of local communities. Within weeks there would be a plethora of organisational structures set up to try and localise services that nationalisation had wrongly decided had to be central.

In recent weeks we have learned lessons from a cobbled together central Covid testing system. Real people live in a distributed and diverse country. We learned that having the capacity to test 200,000 people was wasted unless you could deliver the tests to the people (and get them back again) – and then tell them the results. This has proved beyond centralisation.

So yes to public ownership – but no to nationalisation and central control.

Over the next few weeks, amongst other things, I’ll be exploring the different methods of public ownership that could work for social care.