New analysis on the workforce pay gap

July 21, 2022

The Voluntary Organisations Disability Group (VODG) warns that pressures on essential social care will continue to mount if the workforce is not given parity in pay.

It comes in response to this week’s public sector pay rise announcements, which will see levels of pay increase for NHS and other public sector workers.

VODG, an infrastructure body representing more than 130 voluntary sector providers of disability services, raises concerns that charities are being disproportionately impacted by increasing workforce challenges and that without parity in workforce pay, and more sustainable funding from central government, the risk of cuts to service provision will only increase, leaving disabled people and their families without essential care and support.

Research commissioned by VODG member Community Integrated Care, indicates many social care workers would be paid up to 39% more – an additional £7,000 – if they worked in other public funded sectors.

Voluntary sector providers are also being hit by national insurance reform which requires them to find upwards of £134 million in 2022/23 to contribute to the health and social care levy. The full three-year effect allowing for the impact of increased salaries driven by uplifts in the National Living Wage is estimated to be £428million. The reality of this situation is that charities will, on average, need to contribute an extra £20,392 a year in National Insurance payments.

The VODG survey of 28 not-for-profit providers which covers some 32,000 employees suggests that currently around 6% are paid at NLW rates. With the further increases in NLW it will mean that this number will rise to 54% of the workforce covered in the survey by 2024. In other words in the course of just three years around half the workforce would fall into NLW rates of payment unless their employers are able to increase pay at a rate higher than 6% per year.

Most not-for-profit employers appear to have recognised the need to increase pay but have struggled to deliver consolidated uplifts year on year. With many resorting to non-consolidated bonuses dependent upon their end-of-year position. Respondents to the survey show an average uplift of around 2.2% in 2019, increasing to 3.7% by 2021, most respondents were unable to confirm their strategy for uplifts in 2022. Many social care employees did not anticipate such a significant uplift to NLW which means that some plans for additional pay have been overtaken by the legal requirement to increase pay to £9.50 per hour.

It would seem increasingly likely that as NLW increases employers will need to use what resources they have to meet this statutory requirement rather than seek to increase workforce pay above this rate.

Dr Rhidian Hughes, Chief Executive of VODG, said, ‘Social care is on the brink and despite government’s attempt to reform the system, we are still a long way off from recognising the contribution the social care workforce makes to society each and every day.

‘Yesterday’s announcement is problematic because pay uplifts are below inflation and VODG stands alongside colleagues in the NHS and other services in calling for a fairer package. However, it is important that social care workers are not left behind. The rising costs of living are placing enormous pressures on essential social care workers and charities are struggling to secure funding from local authorities to raise care worker pay.’

Dr Rhidian Hughes, Chief Executive of VODG added, ‘There is enormous variation in the choices local authorities are making about the fees for services provided by charities. We know from our membership that some local authorities are currently offering no uplifts tantamount to cutting fees at a time when all other costs are rising. Other authorities fair better but even uplifts in the upper ranges of 8% are far removed from the true costs of care.

‘Our latest analysis demonstrates that these pressures will only intensify this year and next and without an uplift in pay for social care workers, chief executives are telling us they face the stark reality of how to fill a gap in funding and this, worryingly, is leading to an ongoing ‘hand back’ of services.’

Visit the VODG website to read the latest analysis on workforce pay.

In other news, The Association of Directors of Adult Social Services (ADASS) has published its Spring Survey 2022, which describes the financial and operating state of adult social care services in England.


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