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Social care investment would boost UK economy – report

Social care investment would boost UK economy – report

The social care system has the potential to deliver a huge return on investment if the government provides urgently needed funding to prevent further fragmentation of the sector, a new report has suggested.

According to Carenomics by the Future Social Care Coalition (FSCC), the economic case for further investment in social care is ‘clear and compelling’.

The report warned that low pay and a lack of training in the sector was leading to high turnover of staff and approximately 152,000 vacancies, creating costs and hindering the economy.

However, Carenomics also cites economic research by Skills for Care that calculated the sector contributed £51.5bn of economic activity in 2021/22, despite the net spend from local authorities on social care being just £19bn.

The report highlighted ‘a huge untapped workforce’ of around 5.7 million unpaid carers in the UK.

And it argued that investment and better wages would see the return to work of people aged 50-64 currently not working because of caring responsibilities.

A labour force increase of just 1% in the 50-64 age bracket could boost gross domestic product (GDP) by around £5.7bn per year, the report claimed.

Carenomics also stated that social care generates over £50bn per year in gross value added (GVA) to the UK economy, and that investing 2% of GDP in the overall care sector could create around twice as many jobs generated by equivalent investment in construction.

Furthermore, cited research by Skills for Care estimates that ‘£6.1bn additional investment in adult social care would… provide full economic benefits of £10.7bn – a return on investment of 175%’. According to these figures, every £1 invested would see £1.75 generated in the wider economy.

The FSCC – a cross-party, cross-sector coalition including former ministers, private and third sector providers, trade unions and charities – concludes that ‘the benefits and opportunities are clear, the need is urgent, and the time to invest in social care is now’.

Christina McAnea, joint FSCC chair and 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. It’s no wonder care staff are leaving for jobs where the pay and conditions are much better.’

Ms McAnea added: ‘More money for social care must be an urgent priority for the next government.

‘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.’

They noted a £250m investment into the social care workforce, as well as a £7.5bn 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,’ the spokesperson said.

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