Hettie O’Brien’s recent article in The Guardian focuses on a part of capitalism that most of us barely notice.... private equity firms snapping up everyday services like nurseries, care homes, student accommodation, water, and even funeral homes. Nobody shops around for these; you just need them, no matter the cost. And that, of course, makes them a goldmine for investors chasing steady profits.
She argues these firms dive into sectors where demand never goes away. Childcare, care for the elderly, housing, funerals—they’re immune to recessions. When people stop buying designer handbags, they still need someone to look after their kids or a place to live.
But making money isn’t the only problem; it’s how these private equity giants do it. They go in, buy businesses with borrowed cash, then saddle those companies with debt. Suddenly, the business has to crank out enough profit to cover the loans while keeping investors happy.
O’Brien points out that this turns into a scramble to cut costs. Take childcare: private equity-run nurseries apparently pull in bigger profits than non-profits, but spend less on staff. The trouble is, staff are everything when it comes to quality. Fewer people, lower wages, or less experience might fix the balance sheet, but it doesn’t make the service better.
You see the same pattern everywhere. Water companies under pressure skimp on infrastructure. Care homes cut staff. Student accommodation firms charge high rents for cramped rooms.
Do We Want Essential Services Run Like Businesses?
Backers claim firms bring efficiency and innovation, plus much-needed money when the government’s stretched thin. Councils haven’t got cash, so maybe private investment is the only option left.
But maybe public good and private profit shouldn't mix.... if a care home goes bust the consequences are bit more serious than if a handbag manufacturer goes under!
Too Big to Fail
Transparency is another huge issue. O’Brien mentions private equity firms are often less open than public companies. Their finances are tangled, so regulators and the public struggle to follow the money.
And if things go wrong? The government usually has to step in. Water companies make that clear—if one collapses, the state can't let people go without water or social care.
Final Thoughts
So, what kind of society does Britain actually want? Should things like childcare or water really exist just to make investors rich, or should we treat them differently because everyone depends on them?
The answer really depends on your trust in markets. If you’re a fan, private investment sounds practical, maybe inevitable. If not, it’s just another way basic needs get turned into profit.
Whatever side you take, you can’t ignore the way private equity firms have made themselves part of everyday life. From birth to death, market logic runs deep.