Adult social care’s contribution to economy grows, says report

Oonagh Smyth

An additional £6.1bn investment in long term care is needed to sustain the sector and release its full potential, a Skills for Care report has said.

To reduce the levels of unmet need, the volume of local authority funded long term care needs to increase. This would also need a fee rise to enable higher pay for more staff and to sustain the provider market.

The £6.1bn is composed of £3.8bn for quality and £2.3bn for unmet and under-met need. ‘The two go in tandem,’ its report, The value of adult social care in England, said. ‘Adding £2.3bn for “improved access” into the system (15% more activity) would not deliver good value for money unless it was done in step with an increase in capacity associated with the £3.8bn investment in the form of a “strategic fee increase”.

‘This is a 25% increase in local authorities’ payment to providers and is a realistic figure phased over several years to restore equilibrium to the adult social care labour market and build stability and enhance capacity of providers.’

It argues the best way to make the sector sustainable in the long term is to move away from payment for adult social care processes to ones based on better outcomes for service users.

The sector and its workforce contribute £50.3bn to the English economy, Skills for Care said. It commissioned economic consultants KDNA to produce a detailed analysis of how that is made in communities across the country.

The document analyses the workforce’s value to society and monetises some of these benefits, including improved wellbeing of carers and employment opportunities for them.

During the pandemic the sector’s economic activity increased by 7.7%, while others saw theirs stall or shrink by up to 4%. This resulted in the adult social care contribution to the whole economy growing from 1.4% to 1.6%.

Any sustained growth in adult social care will boost local economies, creating jobs by attracting recruits. This growth would take place throughout England, but would have the greatest impact in the North and the Midlands, where adult social care gross value added (GVA) is around 2% of total GVA compared to less than 1% in London and the South East.

‘Over the last year the 1.5m people who work in social care have gone above and beyond the call of duty to continue to support our families and people in all of our communities to live their lives, to do the things that they want and keep the relationships that are important to them,’ said Skills for Care chief executive Oonagh Smyth.

‘This report shows very clearly that they also make a significant and growing contribution to the national economy.’

The report’s authors recommend the sector needs to create a better-defined career structure linked to training; address pay differentiations between senior and entry-level roles; and recognise and reward the role registered managers play in high-quality service delivery.

The workforce represents 5% of all jobs in England. Employment at local authority level varies from 8.6% of the total workforce in Middlesbrough, North Yorkshire, to 2.6% in the London Borough of Newham.

Nationally, the sector has had vacancy rates over 6% for the past five years. The vacancy rate for direct care staff has been above 7% for the last half-decade and almost 8% in the past three years. There were 7.3% vacancies (112,000 jobs) in 2019/20 and turnover was 30.4%, according to Skills for Care data.