Outsourcing: The different employment models

More social care professionals are working outside councils. With personalisation, spending cuts and the Big Society set to increase this trend, Kirsty McGregor and Daniel Lombard explore the different employment models

More social care professionals are working outside councils. With personalisation, spending cuts and the Big Society set to increase this trend, Kirsty McGregor and Daniel Lombard explore the different employment models


Julie Heywood recalls “coming to earth with a bump” when she joined a private care provider in 2005.

The care worker from Norwich, Norfolk was returning to work after a career break for childcare. Previously she had worked for an NHS hospital for disabled people and enjoyed good working conditions.

“Now, I had to pay for my own uniform, and for my own phone calls if I needed to call back to the office if there was a problem with a client,” she says. “We were travelling between service users unpaid. Some staff were travelling two hours a day, which should have been working time but they weren’t getting paid for it.”

The trend towards privatisation has been the source of considerable concern for unions striving to protect pay and conditions for staff.

Helga Pile, national officer at trade union Unison, which represents 300,000 workers in social care, says she “can see only disadvantages, with a decline in terms and conditions and job security” when staff move into the private sector.

For Heywood, the home care contract with Norfolk Council was taken up by a ­second private provider in 2009 and Heywood was one of about 70 staff transferred in the process.

Meanwhile, Heywood had been elected as a shop steward for Unison and campaigned for greater protection for care workers’ rights.

“We recruited about 20 workers to the union, set up regular meetings and an online discussion forum for care workers, www.careworkersnatter.com, and I was pleased when we gained union recognition with the company,” she says.

After talks with Unison, Heywood says the provider agreed to pay for travelling time spent between clients in Norfolk, adding that they now receive one hour’s pay for every 20 miles travelled.

“I use my own car and get 40p a mile, but previously we were paid 25p a mile,” Heywood says. She was “really chuffed” about the changes “but also proud to work for a private company that seems willing to take a lead in improving conditions for home care workers”.

But she adds that pay and conditions in the private sector generally leave staff, including her, struggling to pay household bills.

“If companies paid more attention to retaining their staff it would provide more stability and better continuity to service users,” she says.

A Skills for Care report in 2010, The State of the Adult Social Care Workforce, found that supermarket cashiers, with a median gross hourly pay of £6.47, were paid about 50p more an hour than care workers in the private sector.

Many in the sector argue that staff deserve to be paid more to reflect the skills and commitment required by the job.

Sheila Scott, chief executive of the National Care Association, which represents 2,000 providers, agrees that improving conditions is “a challenge for all of us”.

But she insists that the major cause of low pay in the independent care sector lies in local government: “It’s widely acknowledged that the fees paid by local authorities to providers are very low.”


 Trading company Essex Cares was set up without disruption to service users


Definition Trading companies are wholly owned by councils but operate as commercial enterprises, providing more opportunities to compete for contracts. Any profits are either returned to the local authority, which remains the main shareholder, or ploughed back into the company to improve services. Two councils have set up trading companies, and many more have expressed interest in the concept.

Trading companies offer the best of the private and public sectors, according to John Baker, executive director of Ernst and Young UK. The auditing giant recently began working with local authorities interested in setting up trading companies to take over adult social care services.

Baker says trading companies benefit councils, as well as staff and service users. “Local authorities have a continuing influence and control over the company,” he says. “There is a focus on value for money, and councils can transfer other services to the trading company, so it gives them flexibility.”

The model is also more popular with unions, Baker says, because it protects staff terms and conditions.

Essex Council was one of the first in the UK to set up a social care trading company, Essex Cares, in 2009. Michelle Gilbert, a domiciliary support manager at the company, says staff were reassured by the fact they would retain their terms and, perhaps more importantly, their pensions.

“Pensions were a real worry for staff,” she says. “Some of them had been at the council for 20 to 25 years.”

Another advantage was the lack of disruption to the service. “It was business as usual,” says Gilbert. “On the ground you wouldn’t notice a difference.”

Mark Lloyd, managing director of Essex Cares, adds that service users benefited from knowing that the company still had council backing. But he acknowledges that Essex Cares employees do not have as much control as those working in a social enterprise or co-operative.

 Staff at social enterprise Evolve YP feel more effective with control over their budgets


Definition Social enterprises are businesses with a stated social or environmental purpose. The profits they make are re-invested towards achieving that purpose.

When a group of Staffordshire Council employees volunteered to take part in the government’s pilot scheme for independent, GP-style social work practices, they decided to run the practice as a social enterprise.

“It was an opportunity to bring our values into it,” says Liz Fuller, a social worker at the resulting company, Evolve YP. “It’s not market driven, and I think that improves outcomes for young people.”

The practice has been providing services for looked-after children in Staffordshire since 2009. It is led by social workers and support staff, who have embraced the autonomy and control afforded to them by the social enterprise model.

“When you’re working in a local authority, you can enjoy the job but you see where there are gaps in the service,” says Fuller. “This was an opportunity to identify those gaps and look at how to offer the services differently.”

Social enterprises require a hands-on approach, and Fuller argues that this has led to better outcomes for the children using Evolve YP’s services. For example, it has its own out-of-hours service staffed by everybody in the practice, which gives children a greater sense of continuity.

“I’m also able to spend more time with children in care in an informal environment,” she adds. “So they don’t just see me as a social worker fulfilling my statutory duties.”

Ceri Jones, head of policy at the Social Enterprise Coalition, says social enterprises suit people who are keen to be masters of their own destiny, to do things differently. But with that comes risk. “A social enterprise, like any other business. can fail, There is a greater level of responsibility.”

The social workers at Evolve YP have to juggle their roles as board directors with a full caseload. “It can be difficult,” says Fuller. “If a complaint is raised against one of your colleagues, human resources normally manage it. Here, we have to deal with it.”

But she says the challenges are far outweighed by the advantages of having greater control, particularly over the budget. “It makes me feel more effective as a practitioner.”

 Sunshine Care manager Chris Bailey: “We can visit someone when they want us to, not when we’ve got time to do it”


Definition Co-operatives exist to benefit their members. The businesses are run according to seven “principles of co-operation”, which include the belief that every member has an equal say in what the co-operative does and control over the capital.

Last year, the Department of Health commissioned Co-operatives UK to explore how the organisations could be used to manage self-funded care, by allowing service users and care staff to work together. Since then, as personalisation has taken a stronger hold on adult services, co-operatives have risen up the political agenda.

One project on the government’s radar is Sunshine Care, an employee-owned co-operative set up by former Rochdale Council staff to deliver home care services to people on direct payments.

There are two major advantages to this model, says Sunshine Care’s manager, Chris Bailey. The first is having the ­flexibility to adapt services to meet the needs of individuals.

“We can go in and visit someone when they want us to, not when we’ve got time to do it,” she gives as an example. “Or, if somebody rings up because they want to go out for two hours that afternoon, we can try to accommodate that.”

The second benefit is financial control. After six months in the job, employees become members of Sunshine Care and have a say in where the company’s profits go, including how much is spent on training.

Guy Turnbull, director of the Social Work Co-operative, a social worker-owned agency in the North East which supplies staff to local authorities, argues that a co-operative is the only outsourced structure that gives employees this much control over what the company does.

He adds: “Co-operatives have a flat hierarchy; they can provide more responsive services because the workers own the business and can easily make decisions about how things are done.”

However, Bailey says the extra responsibility can be difficult to manage.

“Working in a co-operative is a lot harder, because you’re constantly wondering if you’ve remembered to do this or that. It’s like being on call,” she says.

But she adds: “It’s also much more enjoyable and rewarding.”

Perhaps a clearer disadvantage to working in a co-operative is the comparatively low pay and conditions.

Staff transferred from a local authority to a co-operative under TUPE regulations keep the same terms and conditions for the duration of the initial job contract (see below). But Graeme Nuttall, a lawyer at Field Fisher Waterhouse and an expert on employee ownership, points out that, once the initial job contract is up, there is pressure on care providers to drive down terms and conditions to save costs.

“TUPE provides initial protection, but the business must be profitable,” says Nuttall.

“Staff may need to make some tough decisions.”

However, this gives staff the incentive to work hard and to make sure funds are used wisely. And that spirit of working together, Nuttall and Turnbull agree, is why co-operatives work.


Definition Personal assistants are employed directly by older or disabled people via direct payments or personal budgets to help them live independently at home. This model is set to become more prevalent under the government’s personalisation agenda – Skills for Care has predicted that there could be as many as 1.2m jobs for personal assistants, done by 722,000 people, required by 2025 if current policies continue.

Harmander Singh, who provides personal care for his son Jasvir at their home in Ilford, Essex, is one of at least 100,000 ­people across the country working as ­personal assistants.

Jasvir was a healthy, sports-mad teenager with plans to join the police until he contracted a rare illness, Churg Strauss Syndrome, in 2002.

He was confined to his bed for lengthy periods before using a wheelchair and then crutches. Now 27, he gets around on a single crutch, but still requires help with everyday tasks and takes 15 tablets a day.

Harmander says the advantages are that he gets to spend more time with his son, he is always on hand and knows his medical history inside out.

On the other hand, he says, he does not receive any respite care from the local authority, and only receives £8 for each of the 12 hours of support a week to which his son is entitled. He had to give up his job as a local government policy officer in 2007.

“I felt it was my moral duty, but it has affected my ability to pay my mortgage and there’s a loss of status – people might look at me and think ‘he’s only a carer’.”

Miranda Wixon, managing director of the Homecare Partnership, a care provider in London, says the consistency in the relationship can benefit both parties, but there is a lack of clarity around the employment rights of personal assistants, including access to training, and pay and conditions.

“Personal assistants feel overly loyal to their service user and don’t feel that they are able to take holidays and rest breaks. At present there is no professional status or union membership possibilities which leads to concerns about insurance and rights,” Wixon adds.


● The private sector provides 800,000 jobs in adult social care, about 46% of the total.

● 81% of adult care homes are in the private sector.

● 21% of the children’s social care workforce in England works in the private sector.

● 36% work in local authorities.

Sources: The State of the Adult Social Care Workforce, Skills for Care, 2010 report; The State of the Children’s Social Care Workforce, Children’s Workforce Development Council 2008 report


The Transfer of Undertakings (Protection of Employment) regulations, known as Tupe, were drawn up to protect employees’ rights when a business or service is transferred to a new employer.

For local government staff transferred to the private sector, their existing employment contract is protected under TUPE. This includes pay and some terms and conditions, but not pensions.

Pensions are currently protected by the Fair Deal policy, which requires new employers to provide transferred staff with a broadly comparable pension scheme. The government recently proposed reforming or scrapping this policy.

Tupe protection does not have a time limit, but in practice it cannot protect employees indefinitely. Once a worker’s contract is up for renewal, the new employer can change terms and conditions.

If you are unsure whether you are protected by Tupe, you should seek further advice from conciliation service Acas, which runs a helpline providing advice on employment rights – telephone number 08457 474 747 – or your trade union.

This article is published in the 5 May 2011 edition of Community Care under the headline “The changing face of social care”

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