Adult social care contributes more than £50 billion to the economy, report finds

Skills for Care, with experience in workforce development and working as a delivery partner for the Department of Health and Social Care, commissioned economic consultants to produce a detailed analysis of how the significant economic spend of social care is made in communities across England.

‘The value of adult social care in England' report argues that the best way to make adult social care sustainable in the long-term is to move away from payment for adult social care processes to payment based on better outcomes for people who draw on care and support services.

It argues that the skills and knowledge of the 1.5 million adult social care workforce is ‘central’ to high quality, and that investing in the development of talented and productive care workers has significant benefits to the outcomes of people drawing on care and support as well wider benefits to the national economy.

Skills for Care says the report can help shape the offering of contracts that reward and value quality of care and the wellbeing outcomes of that support, which will allow payment of wages to care staff that will better represent the true value of the work they do to support people in our communities. It says addressing this is important at a time when providers are reporting significant recruitment and retention challenges.

Oonagh Smyth, CEO of Skills for Care, said the report offers decision-makers insight into the important contribution of the social care workforce to the nation’s economic recovery.

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

Smyth said the report also “offers ideas about what we can do to ensure we properly recognise the efforts of our workforce who have made such huge sacrifices during the pandemic.”

The report analyses the workforce’s value to society and monetises some of these benefits, including improved wellbeing of carers and employment opportunities for carers which is calculated as up to £1.3bn and around £5.6 billion for working age adults. In total, Skills for Care estimates that these economic benefits are at least £7.9 billion over and above the economic value of £50.3 billion.

During the pandemic, the sector’s economic activity increased by 7.7% while other sectors saw their activity stall or shrink by up to 4% overall. 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 new recruits into a growing sector and additional benefits via indirect and induced ‘multiplier’ effects. The report argues that economic growth would take place throughout England but would have the greatest impact in Northern and Midlands regions, 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.

Social services directors welcomed the research and called on the Chancellor to consider its impact in his upcoming Spending Review.

“Far from being a burden on the economy, social care is a powerful engine of growth fuelling local economies and providing employment opportunities in every corner of the country. It can play a key role in the Government’s levelling-up project,” Stephen Chandler, President of the Association of Directors of Adult Social Services (ADASS) said.

“We are urging the chancellor to make a major investment in social care in his forthcoming budget and in the Spending Review that will follow. This research shows how that would reap dividends while extending care and support to millions of disabled and older people who need it to live their lives more fully.”

Cllr David Fothergill, Chairman of the Local Government Association (LGA) Community Wellbeing Board, also welcomed the findings.

“As this report highlights, social care makes an immense contribution to the economy which has grown during the pandemic, as well as helping people to live the life they want to lead.

“Social care still faces a huge recruitment and retention crisis, with more than 100,000 vacancies available on any given day and extremely high turnover rates.

“The Government’s social care plan was a step towards tackling this, but the Spending Review must also set out how immediate and short-term pressures in social care will be addressed, working with councils, care workers and those with lived experience to build back better and help develop a care and support system fit for the future.”

As a result of the report, Skills for Care is calling for a better-defined career structure linked to training, and for the Government to address pay differentiations between senior and entry-level care worker roles.

They also recommend that policy recognises and rewards the central role registered managers play in high-quality service delivery, as well as looking at higher overall levels of pay to increase the competitiveness of the market enabling employers to attract and employ workers with the right values.