I am grateful for the opportunity to open a debate on the important subject of the future of our care sector and the contribution that the Department for Business, Innovation and Skills must play to ensure that the sector thrives.
I will start by providing some facts, after which I will set out the challenges, the opportunities and the actions that BIS can take. According to research undertaken for Skills for Care, adult social care in England is worth an estimated £43 billion to the economy, both directly and indirectly, and it supports 2.8 million full-time equivalent jobs.
The care sector is not a small adjunct to the NHS; it employs some 1.5 million people in 1.3 million full-time equivalent jobs, or about 6.4% of the entire work force. The sector is bigger in employment terms than the construction industry or the transportation, storage and postal services industries combined. Women make up 82% of the care sector work force. Despite the squeeze on public spending over the past few years, the sector has grown and added more than 210,000 jobs.
The challenges are clear. Our population is changing. We are living longer—a good thing, not a bad thing. The age structure is changing, and the fastest-growing section of the population is the over-85s. By 2030, it is estimated that there will be 2.3 million people aged over 85. Other things are also changing. Many people are having children later, and families are living further apart. There are more family break-ups and divorces, and there are more single people in later life who may not have family support structures.
On present trends, the care work force will need to grow by some 1 million workers by 2025. If the trends are to be addressed, 40% of the projected increase in the working-age population will need to enter the care sector, so a huge proportion of our work force potentially has a part to play in the sector. To put it another way, England could face a shortfall of 718,000 care workers over the next 10 years. If those challenges are not addressed, the care sector will act as a brake on growth and a threat to the hard-won gains in labour market participation by women.
I sought to have this debate with colleagues from BIS, because I believe that the Department has a crucial part to play in addressing the care sector, in the same way as it works with any other part of our economy. As long as the sector continues to be sponsored in Government solely by the Department of Health, I do not believe that the blinkers will come off in terms of addressing the opportunities and the threats that the sector poses for our economy. All too often, the Treasury views the care sector as a dead-weight cost to the economy, but I believe that it must be viewed as a vital part of the nation’s economic infrastructure and a key enabler of labour market participation in later life and by women.
The Government have recognised that issue when it comes to investment in child care, and I believe that the same value and recognition must be given to adult care. A study by the Institute of Education, published in autumn 2014, found that 50-somethings feel sandwiched between child raising, caring for elderly parents and the expectation, which is rightly growing, that they will work longer because life spans are increasing.
The first six weeks of an informal caring role by a family member can be decisive in determining whether that person will remain in work. The triggers are well documented, many and varied. When someone is caught in the middle of a care crisis as a result of an accident or a fall, and they have to juggle working responsibilities with child-raising responsibilities and uncertainty about the quality and reliability of care, that often becomes the trigger—the final straw—for them to decide that they cannot carry on working.
Even when employers accept that they should offer the option of flexible working—many more employers are now doing so—it is not always sufficient to enable such people to stay in the work place. One in six carers reports quitting work to care full time, and the factors that I have described drive them to make that important, life-changing decision, which affects their health and probably also their long-term wealth. Of course, it should be a choice, but for many people it turns out to be a necessity because no alternative is available for them.
Many such employees are businesses’ most important and valuable staff. Companies have invested in them over years. They are people in their 40s, 50s and 60s who hold the corporate memories of the businesses for which they work, and employers cannot afford to lose them lightly. Strategies that enable those employees to make real choices rather than finding themselves forced out of the work force are, therefore, very important. The situation will get worse unless the contribution of the care sector, and that of the wider personal and household services sectors, is recognised.
In 2012, during the period for which I had the privilege of serving as Minister with responsibility for care, one thing that I did was to convene a summit involving Carers UK, Employers for Carers and a range of academics and others from around Europe to look at different approaches to addressing some of the issues that I have outlined. As a result of that summit, a task and finish group was set up to look at the economic case for investing in and developing the sector, particularly the personal and household services sector. That group involved six Departments, including BIS and Her Majesty’s Treasury, as well as leading academics, charities and employers. It reported in 2013, setting out a compelling business case for the multiplier effect that can be triggered by increasing the demand for personal and household services and, as a result, supporting labour market participation.
Employees become carers, and 2.3 million people move in and out of caring responsibilities every year. The number of carers is rising because of the demographic trends that I have mentioned. Carers seek services that enable them to make a choice; 41% of carers would like to work if suitable care and support services were available.
One of the conclusions of the task and finish group was that barriers to work, and to remaining in work, are not so much about employer support as about access to good services. Carers want to work; eight out of 10 are of working age, and about 3 million are currently working. That means, however, that some 1.4 million are not working, and many of them would like to be able to do so. If we want more people to work longer, and if we want more women to be able to work, there has to be more help for carers.
What can BIS do about the situation? It is important to stress that employers are becoming increasingly aware of the risks to their businesses of a labour market that becomes less flexible over the next 10, 15 or 20 years as demographic changes work through and the labour market tightens. Employers recognise the increasing demand for care, support and personal and household services, but they also recognise the danger of market failure if that demand is not met, and if the problems that I have described become much more serious and constrain the growth of our economy as a consequence. I am not suggesting that BIS currently does nothing about the matter; it has a good record, particularly on carers.
I hope, however, that we can widen and deepen the Department’s engagement and understanding of the risks and opportunities. Notwithstanding the constraints on the Government’s time, I wonder whether there might be an opportunity to open that dialogue. Many people in the sector would welcome the opportunity to have a dialogue with the Department for Business, Innovation and Skills.
The Department can also play a part in encouraging local enterprise partnerships to do more. I have conducted a fairly ropy survey of LEPs to ascertain which are engaging seriously with care sector issues, and only a very small number have any reference to the care and personal and household services sectors in their strategies, plans and actions. Those sectors do not appear to be on their radar. One rare example of an LEP that is doing something is, I am sorry to say, not in my constituency or in London but in Greater Lincolnshire, where the LEP is working with Skills for Care and doing some really good work. That may be a model, or at least a starting place, for other LEPs to follow.
Another area in which the Department can help immensely is in addressing the low pay, low status culture that pervades the sector. The National Audit Office estimated in a recent report that as many as 220,000 carers are paid less than the national minimum wage. Surely, it is time that we ensured that that is properly and vigorously pursued. It is not sufficient for Her Majesty’s Revenue and Customs to say, as it often does, that it is unable to mount prosecutions because of inadequacies in employers’ documentation. We pursue those who defraud our benefits system and those who fail to pay the tax that they should be paying. We have invested large sums in strengthening HMRC’s capacity to pursue those who cheat the tax system, and we need to ensure that exploitative employers who cheat their employees—there are good employers in the sector who do not cheat their employees—are prosecuted, thereby setting an example. The Low Pay Commission and, indeed, the HMRC say that the problem is getting worse, not better, so we need action to ensure that those who are exploiting their workers are properly pursued.
In the past 18 months, I have led two independent commissions examining the future of residential care and the future of home care, and both commissions, with experts, academics and people from the sector, have concluded that the sector’s long-term sustainability requires better terms and conditions and that the sector’s goal must be a living wage if it is to attract and retain the staff it needs. Indeed, the sector has among the highest staff turnover rates of any part of our economy. As a consequence, at its worst, those in receipt of care services report seeing as many as 50 different care workers a year. How can someone develop a relationship and have an understanding of the needs of the person for whom they are caring if the next thing they are likely to be doing is moving to Tesco to stack shelves, rather than seeing care as a long-term career? In recognition of that, I hope the Department, either by itself or with others, will consider commissioning work to understand the extent of the hidden subsidies in the sector. Low-paid workers often receive top-up payments through the working tax credits system, rather than from resources directed to ensure that people are paid a proper wage in the first place—in other words, rather than investing money in the service.
We need to work with Skills for Care and the sector to bridge the work force gap by increasing the number of men working in the sector. Some 94% of young people agree that care work is a suitable profession for a man, which is certainly right. A quarter of 16 to 25-year-olds say that they would never consider care as an occupation, and a third of young men say that they do not know enough about care as an occupation. Changing the status of care jobs, giving care jobs key worker status and improving training, pay and conditions could all make a significant difference in shifting the dial on the sector’s credibility as a place to work and build a career and a life.
The care sector’s contribution to the UK economy is all too often overlooked; it is seen as a cost, not as the huge contributor that it is to our economy. As our population ages, the care sector will be critical to our economic success. It will be critical to delivering the Government’s agenda, which successive Governments will now need to have, of promoting later and longer working lives. The care sector will be vital if we are to maintain this Government’s successes in increasing female participation in the labour market. I hope that, through this debate, we can kick-start more work, more thought and more action to ensure that we recognise the sector’s contribution and to ensure that that is properly reflected in Government policy and Government spending decisions in the next and subsequent Parliaments.