Investment in social care will boost UK economy, says report

Properly investing in social care will boost the UK economy, unlock jobs and take pressure off the NHS, according to a new report.

The Carenomics report, published today, warned that the current fragmented and underfunded social care system was “stifling” the economy.

It also argued that the government’s levelling up agenda and other transformational policies would not be achieved without substantial new investment in the sector.

The report was published by the Future Social Care Coalition (FSSC), a cross-party alliance of over 80 organisations and individuals including social care providers, charities, MPs and trade unions.

“A properly funded social care system should be the backbone of a thriving economy”

Christina McAnea

Carenomics has made the economic case for putting more money into the social care sector which, according to Skills for Care, generated £51.5bn for the economy in England in 2021-22.

The analysis argued that social care, which is far greater than other major sectors like electricity, water and waste management, could deliver a “huge return on investment” if ministers put money towards it.

“Without further investment in the social care sector, the government’s aims of improving growth and productivity cannot be realised,” it said.

One key part of investment in the sector would involve putting more money towards the social care workforce, to try to attract and retain workers, said the report.

It comes as latest data suggests there are around 152,000 vacant posts in adult social care in England.

The analysis highlighted that economic activity was mostly driven by those aged 50-64, due to caring responsibilities or long-term sickness or disability.

But it said that, if investment in social care increased and workers were recruited on better wages, then it would be likely that this age group could return into the labour market in some capacity, therefore, boosting the economy.

For example, an increase of just 1% in the 50 to 64 age bracket in work could boost GDP by around £5.7bn per year, according to data in the report.

Meanwhile, the FSSC analysis described how investing in social care could also support the government’s levelling up plans.

“The economic contribution of the social care sector is notably higher in areas that need levelling up, like the North East, making it a strategic investment for regional economic growth,” it said.

In addition, it highlighted how the FSSC believed investment in social care could take pressure of the NHS, particularly in rural, older and poorer areas.

The report said: “It is much better value for the public purse to support people in their own homes and in their own communities than in NHS care.

“Increased social care expenditure and greater availability of nursing and residential care is associated with reduced hospital readmissions, shorter hospital stays, and reduced expenditure on secondary healthcare.”

Separately, the report made the case for investment in social care by arguing that it would address the needs of the UK population, particularly around security in ageing and disability.

It stated: “Investing in social care is not only a matter of social justice but also a strategic imperative for a more secure and resilient economy.

“It is vital infrastructure that cannot be allowed to be underfunded and fragmented. The benefits are clear, the need is urgent, and the time to invest is now.”

Christina McAnea, joint FSCC chair and also the Unison general secretary, said: “A properly funded social care system should be the backbone of a thriving economy.

“But the government has allowed the sector to become underfunded and fragmented,” she said.

“It’s no wonder care staff are leaving for jobs where the pay and conditions are much better.

“More money for social care must be an urgent priority for the next government,” she added.

“This would take the pressure off an overstretched NHS, allow people caring for relatives to find jobs, help reduce social inequality and increase tax revenue for the exchequer.”

A Department of Health and Social Care spokesperson said: “We are fully committed to our 10-year vision to reform adult social care. Our Next Steps to put People at the Heart of Care plan sets out how we are spending £700 million over two years, including £250 million for the workforce to develop their skills and careers, on top of our £7.5 billion investment to help reduce adult social care waiting times and increase capacity.

“This historic funding boost will put the adult social care system on a stronger financial footing and help local authorities address waiting lists, low fee rates, and workforce pressures in the sector.