Careworker pay: the national living wage is not enough

In return for this level of commitment, its workforce receives... well, not a lot. The latest data shows that in April 2020 the average careworker was paid just £8.50 an hour. It is no surprise that many people – including The King’s Fund – see better pay as one of the foundation stones of reforming the sector. The House of Commons Health and Social Care Committee, for example, recently argued for giving social care staff parity of pay with their colleagues in the NHS.

There are many reasons for seeing reform of pay as essential. It is an important factor in the vacancy problems in social care. Last year, there were 112,000 vacancies at any one time, a slight fall from 2019 but the second year in a row the number has topped 100,000. It also plays a role, albeit not the biggest one, in the sector’s awful turnover rate, with 430,000 staff (30.4 per cent) leaving their jobs in any one year.

There is also the issue of social justice. How can it be fair that workers doing difficult, skilled work battled their way through Covid-19 on such low pay, especially when they had a much higher risk of dying than other occupations as a result?

The government has acknowledged pay as an issue. The care minister, Helen Whately, told the House of Commons in June that an ambition of reform was that ‘in the long term care workers get the rewards they deserve.’ Yet, even if it wanted to improve pay, it faces real practical difficulties. The great majority of care workers are employed not – as with the NHS – by the public sector but by private companies. The money flows – in crude terms – from national government to local governments (who commission services), then to providers and only then to care workers. As a result, a £1 increase in national funding does not necessarily lead to a £1 pay increase for care workers. Proposals for better care worker pay must therefore come hand in hand with ways of delivering it, such as a sector-specific minimum wage or practical ways of requiring better pay when commissioning services. We must also look at how to link training and qualifications to pay and create career pathways across health and care.

None of that is currently happening. The main tool for improving pay up to now has, in practice, been national living wage legislation. To some extent this has been successful, with care worker pay rising faster since the introduction of the national living wage in April 2015 than before it. Next April, the national living wage will rise by 2.2 per cent (and also be extended to some younger workers). This is not as much as had been mooted in consultation but is better than the pay freeze being experienced in much of the public sector.

Yet the national living wage has had several unintended and unwanted consequences for social care, in part because the sector has been starved of cash to fund it. First, while the living wage has raised the pay of the lowest paid care workers, that has been at the expense of other staff. Employers have kept down overall pay rates by giving much smaller increases to other staff and a senior care worker is now paid just 12p more per hour than a new starter. Hardly an incentive to career progression. Second, while pay has increased for care workers as a result of the national living wage it has not increased as quickly as in other sectors like retail. Here, the major supermarkets were already paying more than £8.50 an hour earlier this year and also typically offered bonuses for staff during the Covid period (in fairness, so have some social care providers). So social care has become less competitive for its workforce. This may not matter quite so much with high levels of Covid-related unemployment, but it will come back to haunt the sector when unemployment falls. And third, there is some evidence that increasing pay through the minimum wage may have lowered social care quality in some circumstances.

This latter point is important because it reminds us that, without an effective workforce strategy, paying staff more may not in itself necessarily guarantee an improvement in quality of care. Nor does it make any difference whatsoever to the number of people who receive publicly funded care, integrate it better with the NHS or prevent the postcode lottery of who gets it. All of these – along with improved funding – are key areas for reform as well and reinforce the need to see pay as one factor in a wider, long-term and properly funded reform of social care rather than a one-off fix in its own right.