Care UK and the Scandal of Islington Council

Below is a letter I have submitted to the Islington Tribune in response to an article that was printed in last week’s addition.

To the Editor, Islington Tribune

I was pleased to see the coverage given in last week’s Tribune to the investigation being launched by Islington Council into its contracts with Care UK and the circumstances surrounding the slashing of the wages of staff who work for that company.

I was shocked, I am sure like many other people, to discover the obscene contrast between the salaries and various perks enjoyed by Care UK’s directors and the wages of staff in their Islington care homes, now only just above the legal minimum. This is scandalous enough but there is perhaps a bigger scandal in the way in which the Council has orchestrated the cutting of staff wages behind the scenes.

While the Council has tried to pretend that the cuts had nothing to do with it and that the decision was made by the company, the truth is that the Council’s ruling executive made a secret decision in December, 2005, to give Care UK additional money in order to buy out staff terms and conditions. A key feature of the contract, as originally negotiated, was that the Council continued to top up staff pay so that employees could receive the same wages as when they were working for the local authority. In deciding to give this additional money to Care UK, the Council spotted an opportunity to save itself something like £19 million pounds over 22 years and perhaps also an immediate reduction in the Council Tax.

Islington Unison has however been concerned that the decision to make the payment to Care UK may have breached the Council’s own rules on procurement and was possibly unlawful. And last month we submitted a report to the Council’s Performance Review Committee calling for an independent investigation into the decisions taken by Care UK and the Council. Now the Council has announced that an internal review is to be carried out by the Deputy Chief Executive, Andy Jennings. This means that the Council is investigating itself and I question whether it will do so with sufficient rigour and scrutiny.

The Care UK spokeswoman quoted in your article as saying that the changes to staff terms and conditions ‘will have no effect whatsoever on the balance sheet ‘of the company is largely being truthful. But the whole sorry affair has cost the company more then they originally intended as the money provided by the Council has not in the end covered all of their costs. Care UK representatives told me that the reason they were saving money for the Council was in order to secure ‘future business opportunities’. This is something which I am deeply concerned about because when a company tenders for a Council contract, it should be judged only on the bid it has submitted for that contract, not on business favours it has provided for the Council previously. I hope that Mr. Jennings will be considering seriously the fact that at the same time as Care UK were being provided with the additional money, the Council also awarded them a second contract to run another care home. I am at the end of the day extremely concerned as to the overall propriety of the relationship between the Council and Care UK.

To the list of the directors of Care UK with their accompanying mugshots - as featured in your article - should be added the following list: Stephen Hitchins; Meral Ece; George Allan; Bridget Fox; Arnie Gibbons; James Kempton; Terry Stacy; Jyoti Vaja; Laura Willoughby. All of these people were serving Liberal Democrat Councillors in December, 2005. All were members of the Executive of the Council which made the decision to give somewhere in the region of £1 million to Care UK to facilitate the slashing of staff wages and other conditions. I believe these people have some explaining to do. Perhaps Councillor Kempton could start the ball rolling. He is after all the present Leader of the Council and perhaps he could tell the inquiry how the decision made at the meeting of the Executive was transparent, democratic and lawful. Perhaps he could also explain if in fact the cutting of the Care UK wage bill was intended to help the Liberal Democrats electorally, by allowing them to freeze the Council Tax in 2006 without having to inform the electorate how this had been achieved. The deal done with Care UK remained completely secret until September 2006 and many of the facts still remain unexplained.

Islington’s Liberal Democrat councillors continue to pride themselves on setting one of the lowest Council Tax rates in London. Of course it is an easy thing to do this by making cuts in services like the care homes for older people with mental health problems, where the service users themselves are unlikely to protest. James Kempton and his accomplices would no doubt claim that cutting the wages of staff does not affect the overall quality of the service. But this is just sheer rubbish and in future it will be harder than ever for Care UK to retain and recruit good and suitably qualified individuals. All this just so the Council can pretend it is providing quality services and being efficient!

Andrew Berry
Deputy Branch Secretary