Fair Pay Agreement Report
Please find attached a report from the Fabian Society on the Fair Pay Agreement.
Summary
The treatment of our social care workforce is a national scandal. England’s 1.6 million care workers suffer from endemic low pay and poor conditions, with almost half of care workers paid below the real living wage, and many earning below the legal minimum wage when travel time is taken into account.
There are few opportunities for progression, with senior care workers earning just £3 per shift more than care workers. A third of the workforce have received no training for their role; three in ten care workers are on zero-hours contracts, nine times the average for the economy as a whole; and few care workers receive more than the legal minimum in terms of sick pay or pensions.
The government is currently legislating for a fair pay agreement in the sector. This report makes the case for an ambitious and fully funded fair pay agreement in order to improve pay and conditions, tackle the workforce crisis, and improve the quality of care. Low pay and poor conditions are the major driver of the workforce crisis in social care, which jeopardises the very sustainability of the sector.
There are 120,000 unfilled vacancies in social care, with one in ten care worker roles vacant. Three in ten care workers left their role last year, a turnover rate three times higher than that seen in the NHS. Low pay and poor conditions in care are the result of an underfunded and dysfunctional commissioning model. Local authorities lack the resources to pay for decent care, with 95 per cent commissioning below the minimum required to comply with employment rights.
In an underfunded marketplace, providers minimise labour costs to win contracts and remain viable. The care workforce has low levels of union membership and bargaining power, limiting their ability to secure fair pay. Enforcement of employment rights is insufficient; HMRC inspects just 1 per cent of providers each year. Underpinning all of this is the chronic under-valuing of social care as a sector, and the social care workforce itself.
The fair pay agreement offers an opportunity to transform pay and conditions in the sector. In this parliament, the fair pay agreement should seek to:
Introduce a higher minimum wage set at a rate equivalent to healthcare assistants in the NHS (£13.17/hr). This higher minimum wage – along with an uplift for senior care workers in order to protect differentials and support progression – would cost £1.5bn a year.
Provide occupational sick pay, covering at least 50 per cent of pay, at a cost of £117m a year.
Increase employer pension contributions to 5 per cent, matching employee contributions under auto-enrolment, at a cost of £343m a year.
Increase investment in training and development, with all staff expected to have or be working towards the Care Certificate.
Please find attached a report from the Fabian Society on the Fair Pay Agreement.