Odds stacked against it: how social care struggles to compete with supermarkets on pay

‘I dread hearing Aldi opening up nearby... I know I will lose staff.’

This quote cited in last month’s House of Commons Health and Social Care Committee report on the health and care workforce is familiar to many in adult social care. Along with other similar evidence, it led the committee to conclude that ‘social care providers are consistently being outbid by the retail and hospitality sectors’.

What, though, is the extent of that competition? To find out, we looked at the minimum rates paid to their staff by the 10 biggest supermarkets in June 2022 and compared them to the rate paid to care workers in the independent sector (which employs the vast majority of care workers, around 790,000 in total). The results are chastening, if not surprising.

For social care, the minimum rate for staff over the age of 23 in June 2022 was £9.50 – the statutory minimum set by the national living wage. It has been estimated that around 50 per cent of care workers (which would equate to 395,000 of the 790,000) earn within 30 pence of the national living wage level. Unfortunately for social care, and the people it serves, in June 2022 nine of the 10 largest supermarkets were paying more than this.

The temptation for staff to move sectors is clear and must be strongest for the very lowest paid. It is estimated that 30 per cent of care workers (237,000 of the 790,000) are paid at or within nine pence of the minimum level. If a care worker paid at this rate had been able to secure a job with Tesco in June 2022, they would have seen, as a minimum, an immediate 6.3 per cent pay increase.

With the move would have come some useful perks. Tesco offers staff a minimum of 10 per cent discount on shopping and the average household’s supermarket bill was nearly £50 a week in 2021, so our former care worker would have had another £20 or so a month in their pocket, on top of their wage. As Tesco says, every little helps – particularly during a cost-of-living crisis.

It was not always like this. If we go back to 2012/13, we find that, on average, retail assistants were paid 16 pence an hour less than care workers. But by 2020/21 they were being paid 21 pence an hour more. A key reason for this change is that the adult social care provider sector relies on the rates paid for care by local authorities, and they have struggled financially over the past decade. Local authority income from government grants and local taxes fell 15 per cent in real terms between 2009/10 and 2019/20, resulting in an 18 per cent real-terms fall in council spending. This has impacted rates paid for care and, while rates have risen recently in real terms, the Department of Health and Social Care itself admits that they are at unsustainable levels.

Of course, the comparison between social care and supermarkets is in some ways unfair: the challenges and rewards of the roles in those sectors are very different. We know that many care workers love their jobs because they can make a real, immediate difference to people’s lives. What, then, if we compare the pay of care workers with a similar role, such as a healthcare assistant in a hospital? In 2020/21 (the last year for which we have data), the average care worker earned £17,900 but even the starting salary for an NHS healthcare assistant (Agenda for Change, Band 2) was £18,005.

And that difference grows depending on how long an healthcare assistant has been in post. After two years in the NHS, they would have been earning £19,337 whereas a typical care worker could expect to be earning just six pence an hour more after five years in the sector. The healthcare assistant is also likely to have greater access to training, development and career opportunities than their colleague in adult social care. We know that career development, alongside pay, is a key issue for social care staff.

No wonder, then, that the Health and Social Care Committee concluded that it was not just an improvement in hourly rates of pay that was needed in social care but ‘a long-term, sustainable strategy… which includes the prospect of pay progression, professional development, training, and career pathways.’

There has however been no progress on delivering such a strategy in adult social care and no sign that the government is seriously interested in developing one. The government’s impact statement on its adult social care reform programme has a whole chapter on the workforce that manages to avoid even once using the word ‘pay’.

For the foreseeable future, the opening of a new Aldi is set to be good news for local shoppers but bad news for the local social care sector and for the people who use its services.