Keep up to date with the future of the care sector
Claims inflation remains the most pressing issue faced by compensators and personal injury practitioners alike. The care sector has also faced a unique set of challenges since 2020, which has impacted on availability, cost and claims reserving.
In this short series of articles we provide; a situational analysis of the care sector, look at how care is calculated (and the impact of inflation),in addition to examining how the courts have approached the issues relevant to care. Finally, we consider longer term trends and the future of social care in the UK.
In early 2024, Weightmans will hosts a round table event with expert speakers from the social care and legal sectors. Further details will follow later in the year.
Part 1 – a situational analysis
Inflationary pressures have been felt at all levels of society over the past 24 months. Amidst FCA warnings over solvency the issue of claims inflation remains the dominant topic occupying personal injury practitioners and compensators alike.
Inflation has been felt most acutely in the care sector which, as we will see in this short series of articles, has its own bespoke challenges. In this, the first, we provide a situational analysis of the care sector.
In future articles, we will explore how care is calculated, the impact of inflation and how the courts approach the main issues relating to care. Finally, we will canvass the views of experts to determine how matters are likely to unfold over the coming months and years.
Facts and figures
'Skillsforcare' in their paper "The state of the Adult Social Care Sector and workforce in England", published in October 2022, noted that 17,900 organisations currently provide social care at 39,000 establishments with an additional 65,000 individuals employing their own staff.
Staff turnover in the care sector stands at 29% overall and 52.6% in those aged under 20 years. The UK average staff turnover rate stands at just 18%.
There are a total of 1.79 million social care posts which
include 860,000 employed directly as care workers.
In a separate article "The King's Fund", published on
24 July 2023, its author Simon Bottery notes that current vacancies
in Adult Social Care stand at 152,000 for the period 2022/2023
– a reduction of 12,000 compared to the period 2021/2022 (a
vacancy rate of 10.9%), though still tens of thousands above the
figure seen in 2015 (vacancy rate of 6%).
In March 2023, 9.9% of all social care jobs are vacant compared to a pre-pandemic rate of 7.3%. In context, the job vacancy rate across all sectors in the wider economy stands at just 3.4%.
The fault of Brexit?
Over the past five to 10 years, a significant proportion of carers were occupied by EU workers, many of whom returned to their native countries during the pandemic which placed strain on a sector already struggling with recruitment. Restrictions on economic migration brought about by the UK leaving the European Union are the not the sole cause of unfilled vacancies.
It became Government policy in December 2021, on the advice of the Migration Advisory Council, to lower the barrier for care workers to be allowed to work in the UK.
Care workers were then added to the "shortage occupations" list, meaning that workers outside the UK could be granted visas, provided they had a UK-based company willing to sponsor them.
Data from the Office for National Statistics (ONS) shows that 70,000 visas were granted in 2022/2023 – up from 20,000 in 2021/2022. Despite a net increase of 50,000, vacancies over the same period in the care sector fell by just 12,000.
Other reasons
- The starting rate of pay is low compared to other occupations.
- Progress to more remunerative pay is "poor".
- Most social care is commissioned by local authorities from private providers with financial resources too stretched to pay staff much above the minimum wage.
- Care as a profession is generally undervalued by society.
- It is a profession which is unattractive to men who make up less than 20% of the total workforce (82% female).
Key trends in adult social care
In their paper "Social Care 360", published on 2 March 2023, Bottery and Mallorie, identify these as follows:
- More working age adults require support, with requests for social care support rising by more than 9% since 2015/2016.
- The number of people receiving long term care has fallen.
- Financial eligibility has become tighter in the context of the planned health and social care being delayed.
- The total expenditure has increased due to covid.
- Local authorities are paying more for care home cases and home care.
The inverse link to unemployment?
Historically, a correlation could be found between wider employment/unemployment rates and care sector vacancies – vacancies reduced as unemployment rates rose. That inverse link appears to have broken with social care vacancies increasing by more than the rate that unemployment has declined.
By way of example, vacancies across the sector stood at 60,000 in 2012/2013, compared to 152,000 10 years later.
What does this mean in practice?
The positives
There are tentative signs that the number of open job vacancies is reducing from record levels seen in 2021/2022 and that by adding the care sector to the "shortage occupations" list in December 2021, the number of sponsored workers employed by UK care providers is increasing.
Wage and core inflation appears to be slowing which will act as a downward lever to slow the current cost of employing both direct and agency carers.
Conclusions
Despite these positives, adverse perceptions of the care sector remain deeply ingrained amongst the UK's working population and this coupled with low pay and "poor" career progression will continue to have a negative impact on both vacancies and job turnover.
In later articles we set out how we feel this will translate in future months and years, whereas in Part 2, we address the principles of how care is costed and the impact of inflation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.