The quality of adult social care and terms and conditions for staff have declined as a result of increased privatisation, according to a new report.

The report, published by the Centre for Health and the Public Interest, found that workers in the private social care sector are paid ‘considerably’ lower rates than by councils, with a higher turnover of staff.

The failure of privatised adult social care in England: what is to be done? also says that while 41% of community-based and residential social care have been found to be inadequate or requiring improvement by the Care Quality Commission since 2014, it has no power to intervene to prevent a company from collapsing.

The report calls for new measures to be introduced to bring about a more effective way of regulating the market including:

• A transparency test – whereby the contractual arrangements with a private provider should be fully open;
• An accountability test – whereby the local electorate could demand the ending of a contract with a private provider if there are concerns about performance;
• A workforce test – whereby the contracts with private providers would have to include requirements guaranteeing certain terms and conditions of the workforce, and collective bargaining rights; and
• A taxation test - whereby private companies in receipt of public service contracts would be required to demonstrate that they were domiciled in the UK and subject to UK taxation law.

The report said: ‘Whilst recognising the difficulties involved in replacing private provision by state provision, the report concludes that it would be possible to introduce a ‘‘preferred provider’’ policy, whereby local authorities would give preference to either their own provision or provision by the voluntary sector or user-led organisations.

‘Similarly local authorities could require the return on capital achieved by private providers to be capped to a maximum of 5%. This would reduce private equity investors’ interest in adult social care provision and help re-balance the market between state, voluntary and private provision.’