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“Deliver Pay Rises” As Report Warns Of Economic “Negative Impact”

The first detailed study of new plans for “Fair Pay Agreements”- published by Policy Exchange finds that the policy could cost taxpayers £4.2bn per year in social care alone, £21bn over a parliament, while failing to improve many beneficiaries’ living standards.

The plans, part of Labour’s New Deal for Working People, have been little noticed so far but are potentially among the New Deal’s most far-reaching elements.

Policy Exchange reveals that in social care, the first sector to be covered, the cost could be £9.9bn per year. £4.2bn of this would fall on taxpayers, equivalent to an extra £225 per year – 10.9 per cent – on average Band D council taxes, and examines the implications of a £15 minimum wage for care workers, warning that the potential for negative impacts on the economy is “significant”.

In response, Professor Martin Green OBE, Chief Executive of Care England, says:
“Since the Prime Minister promised to ‘fix social care once and for all’ in 2019, the situation facing our sector has worsened dramatically. The Government has abandoned many of its key pledges and failed to significantly shift the dial on the workforce crisis in adult social care

“Against this backdrop, it is incumbent upon the next Government to finally deliver meaningful workforce reforms and make social care a truly attractive destination for staff. While there may be considerable upfront cost involved in doing this, it pales in comparison to the cost we will bear as a society if we continue to kick the can down the road.

“Today’s Alzheimer’s Society report, for instance, shows that the cost of dementia in the UK will more than double to £90 billion by 2040 unless urgent action is taken. An ageing population, with increasingly complex care needs, requires a skilled and resilient adult social care workforce to keep up with rising demand. Without delivering a pay rise to the sector’s 1.5 million staff, that simply will not materialise, leaving people without the care they need.

“Rewarding care workers is a sensible economic investment for our country. Not only would it support a vital public service but boost England’s economy through higher tax returns to the Treasury, reduced in-work benefits and additional consumer spending. Care England implores the next Government to recognise this and finally give the adult social care sector the funding so desperately needs.”











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