This is a major part of the story of the modern UK economy. It needs a whole book, so, as so often, this is just a placeholder. Consider this:
In what is thought to be the first case of its kind since the announcement, the carer, who has three children, has asked officials to cancel the in-work benefits she receives. This includes housing benefit and universal credit because she is on a low income, along with the disability living allowance (DLA) of £103.10 a week her eight-year-old daughter, who is autistic, receives to assist with personal care and mobility. [1]
The story is about a care worker from Ghana. I would assume she is here on a Care Worker Visa. The presence of 3 children suggests she may have got her Visa before the rules were changed and immigrant Care Workers would not allowed to bring in dependents. The article doesn’t say, but looking at the list of benefits she receives that is going to be a hefty weekly sum. No mention is made of a husband. Let’s take a guess and say that the weekly subsidy is £400.00. That would be £1,600.00 a month. A typical monthly pay figure, before tax for a care worker is: £2,400.00. So; what this Care Worker needs to run a viable operation is £4,000.00 pcm – of which her employer pays £2,400.00 and the public, through taxation, another £1,600.00.
According to the Guardian 84% of care home beds are provided by private companies. [2]
The above story is about immigration. I have hijacked it for my point, and for this point, it doesn’t matter if the woman is an immigrant worker from Ghana, or a UK Citizen. It could be either. The point is that a private company is straightforwardly being subsidised to provide the service. If they employ single Mums who need £4,000.00 pcm to stay afloat, then the private company should be paying this. What they have done is simply offloaded nearly half the cost of this employee onto the taxpayer. It is amazing that they can get away with this. But; this is the whole model. It turns out that the “efficient” private sector which took over delivery of public services from the state from the 1980s onwards, is efficient at just one thing; looting the public purse.
Another rather relevant figure compares costs of a private special needs school place to one provided in a state institution: “figures showing the cost of educating a child in a specialist state school place was £26,000 per year, compared with £63,000 in private provision funded.”. Frustratingly, (and as is so typical of the Guardian, there is no source provided), but I think we can assume it is at least indicative of a trend. [3] It could be argued that the private schools provide more expensive and specialised forms of care, though the IFS does not mention such a factor, and simply suggests that the private providers are providing excess capacity.
In short; the reality is that (as this author for one fully realised at the time), all the stories people were told in the 1980s when the normal mode of ‘delivery’ of public services became not direct state provision, but state commissioning from private providers, were bunkum. The reality is that a new form of tax was introduced; for the delivery of services the public has to pay a tax of up to 200% direct to, (often US as it happens), private companies. Surprise, surprise. This is known as freedom.
Notes
- https://www.theguardian.com/uk-news/2025/nov/29/immigration-status-fears-carer-cancel-disability-living-allowance-benefit
- https://www.theguardian.com/society/2019/sep/19/84-of-care-home-beds-in-england-owned-by-private-firms https://weownit.org.uk/public-ownership/care-work
- https://www.theguardian.com/education/2025/nov/27/ministers-face-calls-to-explain-how-6bn-send-funding-hole-will-be-paid-for The source appears to be the IFS: https://ifs.org.uk/publications/spending-special-educational-needs-england-something-has-change