Two in three care jobs in the capital pay below the london living wage

Nearly 100,000 care jobs in the capital paid below the London Living Wage last year – accounting for almost two-thirds (63 per cent) of the frontline care workforce – according to new analysis published today (Wednesday) by the independent think-tank the Resolution Foundation.

The analysis, part of a UK-wide investigation into the pay and conditions of the social care workforce, found that the typical wage for a care job in London was £8 an hour during 2013-14. The London Living Wage at the time was £8.55, rising to £8.80 halfway through the year.

Raising care worker pay in the capital to at least the London Living Wage would have left staff over £1,100 better off last year, even after accounting for higher taxes and lower in-work benefits.

The Resolution Foundation analysis estimates that paying the London Living Wage to the capital’s care workforce would have cost employers an additional £390 million last year. The think-tank estimates that publicly-funded care services, commissioned and paid for by local authorities, account for around 60 per cent of these costs (£230 million). As well as wages these figures include associated employer costs such as pension contributions, holiday pay and National Insurance.

Making social care a living wage sector was a central recommendation of recent public enquiries, including the Kingsmill review into working conditions in the care sector and the Burstow commission on the future of the home care workforce. Progress towards this goal will require action on the part of providers, local authorities and central government.

The Resolution Foundation argues that savings in public budgets from higher wages in social care are an important consideration in the debate around how to improve pay. For example, the think-tank estimates that a significant proportion of the publicly-funded costs of paying care workers a London Living Wage would be recouped by the Exchequer in the form of higher tax revenues and a reduced in-work benefits bill. The full extent of these savings will be explored in the final report of the investigation, which will be published in early March.

Further indirect savings may also result from paying the London Living Wage to care workers, says the Resolution Foundation. Past experience suggests that higher pay and better terms can improve staff retention and save employers money on recruitment.

Better pay should also ultimately lead to long-term improvements in the quality and continuity of care. This could create wider savings across the health and social care budget by keeping people in their homes – and out of hospital beds or residential care settings – for longer.

The Resolution Foundation analysis is published as care providers and local authorities came together at an event this morning hosted by Citizens UK, with care minister Norman Lamb, to discuss how to improve care quality and achieve the living wage in London.

Laura Gardiner, Senior Research and Policy Analyst at the Resolution Foundation, said:

“Low pay is endemic in social care, with almost two-thirds of jobs in the capital paying less than the London Living Wage. Alongside anti-social hours and poor contractual terms, it’s becoming clear that such pay levels are putting the workforce under strain and hampering its ability to deliver high-quality care at all times.

“If we want a social care system that treats those receiving care with dignity, then we urgently need to invest more in the workers who staff it.

“Rising demand from an ageing population is set to create up to one million additional care jobs across the UK in the next decade. Meeting that demand and raising the quality of the care provided calls for a significant improvement in the way we treat our care workforce. Paying the living wage is an essential first step.”

Ends

The London Living Wage currently stands at £9.15 and the National Minimum Wage at £6.50.

Skills for Care estimates that there are 150,000 frontline care jobs in London. Of these 40,000 are in residential homes, the rest are in home care or involve the provision of services in the community. This is a much lower proportion in residential settings than elsewhere in the country.

The Resolution Foundation has estimated the cost of raising care worker pay to at least the London Living Wage using data on pay and hours in the capital’s care jobs from the National Minimum Dataset for Social Care (NMDS-SC), provided by Skills for Care. Average cost increases per job are grossed to Skills for Care estimates of the size of the frontline care workforce.

Previous Resolution Foundation analysis looked at underpayment of the National Minimum Wage for UK care workers. It found that workers lost out on £130 million last year due to face-value rates below the statutory minimum, plus a failure to pay all working time including time spent travelling or on call. This problem is much smaller in London than it is in other parts of the country, due to typically higher pay rates. Nonetheless a small minority of providers in London are likely to be in breach of minimum wage regulation.

The final report of the Resolution Foundation investigation into the pay and conditions of the social care workforce, which was generously funded by Unbound Philanthropy, will be launched at an event with Care Minister Norman Lamb in central London. You can register for the event – As if we cared – the costs and benefits of a living wage for social care workers – at the following link.