Characteristics of Companies in the Care Sector
Companies operating in the care sector exhibit distinct characteristics, such as financial prioritization, control by financial experts, and reliance on technology. Large care chains engage in takeovers and have offshore accounts, while smaller companies face asset stripping and profit maximization pressure. These entities focus on profitability over service quality, leading to low pay and outdated regulations. The extraction of profits above all else defines the operations of financialized care companies. Reference: Corlet Walker, C., Kotecha V., Druckman, A., & Jackson, T. (2022). Held to Ransom: what happens when finance takes over care? Briefing Paper, University of Surrey, Guildford.
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Company Childcare Characteristics of companies operating in the care sector Helen Penn ICMEC seminar 27 June 2022
Characteristics of Care Chains many of whom have hard to track offshore accounts. Many of these care chains are transnational in scope and have no local or national allegiances Typically, large chains continually takeover smaller competitors, and finance their acquisition through high rates of borrowing; this debt is then used to offset tax. The large chains are run by financial expertsrather than service experts; these financial bosses receive high rewards, on average 13 times the salaries of workers Very large care chains are often run by private equity companies,
Characteristics of Care Companies extraction over and above any other aspect of the business; this is why in the jargon they are called financialized companies. The smaller companies that are taken over are asset stripped and their expenditure closely scrutinized in order to maximize profitability and returns to shareholders. Planning and development in these financialized companies are often at a significant remove from day to day issues of running the service; staff are rarely consulted, or have a say, or are informed about these decisions The companies give overwhelming priority to profits or
Characteristics of Care Companies control and monitoring performance. There is significant low pay, outsourcing and use of gig economy for employees in these companies Regulation concerning these companies is generally very weak and outdated, the financial records are inadequately monitored, and the service targets are likewise dated and inappropriate. The companies make heavy use of technology and algorithms for
Key reference Corlet Walker, C., Kotecha V., Druckman, A. and Jackson, T (2022) Held to Ransom: what happens when finance takes over care? Briefing Paper, University of Surrey, Guildford. Centre for Understanding and Sustainable Prosperity www.cusp.ac.uk/publications
