• Select Committee on Health and Social Care report – ‘Social care: funding and workforce’

    The Select Committee on Health and Social Welfare published their report, ‘Social care: funding and workforce’ in October 2020.

    It focuses on the woeful lack of Government funding in the sector.  It identifies that social care workers should receive the Real Living Wage and estimates that Government needs to invest £7.9bn into health and social care.

    Impact on the workforce

    The funding difficulties in social care translate directly into the social care workforce; over 20% of care workers are paid only the National Living Wage, with 1 in 5 care workers under the age of 25 paid less than this, and the proportion of care workers paid on or above the Real Living Wage has decreased significantly from 25% in September 2012 to just over 10% in March 2019. It is clear that fair pay for social care workers must be an integral part of our long-term funding settlement for social care.

    Impact on the care market

    Jane Townson of the UK Homecare Association explained to us the issues they face with local authorities paying providers rates that do not even cover their costs:

    “We have 13 councils paying less than £15 an hour. That does not even cover the national legal minimum wage and statutory employment on-costs. We believe it should be illegal for councils to purchase care at rates as low as that. Eighteen councils have not given any inflationary uplift to cover the 6.25% increase in NMW that we had in April.

    Local authorities also argue that the lack of a long term funding settlement also prevents local authorities from commissioning effectively and shaping the care market.”

    Oonagh Smyth of Skills for Care also pointed out that social care is an important part of the economy and needs to be recognised as such:

    “We need to realise that the social care sector is a significant contributor to the economy. It contributes £40 billion a year, and we need to start seeing it as a significant sector, employing 1.5 million people, supporting 1 million people a year and contributing a significant amount to the economy.

    It is clear from the evidence we have heard that funding shortfalls are having a serious negative impact on the lives of those who use the social care system, as well impacting the pay levels of the workforce and threatening the sustainability of the care market. An immediate funding increase is needed to avoid the risk of market collapse caused by providers withdrawing from offering services to council-funded clients and focusing exclusively on the self-pay market.”

    Funding estimates for social care

    The current level of funding for social care therefore neither meets the expectations society has for the way older and vulnerable people should be treated, nor makes provision for future pressures caused by both demography and rising wages. Calculating how much money is needed to resolve these issues is complex with different estimates put forward by a number of organisations in recent years. Written evidence to this inquiry has provided useful updates to these figures. These are set out in the table below. It should be noted that these estimates do not take into account the added costs necessitated by the COVID-19 pandemic, which have been calculated separately by ADASS at close to £6 billion.

    Annual funding increase required What it would cover Source
    £1.4 bn Ensuring all care staff are paid the Real Living Wage (currently £9.30, and £10.75 in London) Resolution Foundation
    £2.1bn Meet future demand–this is the base option where additional funding provided keeps up with underlying demand from an ageing population. [2023–24] Health Foundation
    £3.9 bn Increase pay – delivering the planned increases in the National Living Wage for care workers with a small pay uplift of 5%, in line with the uplift given to NHS staff [2023–24] Health Foundation
    £4.4bn Meet demand and increase care provision by 10%. This could be used to increase the amount of care people already receive or expanding care to more people. [2023–24] Health Foundation
    £5.5bn Provide local authorities with additional funding to pay higher costs for care packages–for example to cover higher hourly rates for providing domiciliary care, or higher weekly rates for providing residential and nursing care. [2023–24] Health Foundation
    £7.7bn Increase care provision and provide funding for higher costs for care packages. [2023–24] Health Foundation
    £7.9 billion Address the ‘provider market gap’ (the difference between what providers say is the cost of delivering care and what councils pay) and ‘core pressures’ (inflation, demography and the National Living Wage). It is projected on the basis of maintaining 2019–20 levels of access and quality. Local Government Association

    Full report here:



    Philippa Stannard

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