WIREDGOV

New research published today (Monday) by the TUC exposes the pay gap between the directors of profit-making care firms, and their frontline workforce. 

• Private sector frontline care workers get just £308 per week, compared to £18,777 for senior directors in large private care firms
• Care workers directly employed by local authorities earn £1.87 more per hour, or £65 per week, than care workers in large private firms
• Private firms are profiteering from care at the expense of service users and staff, says TUC
• Union body calls for £10 per hour wage floor in the care sector

Average pay for frontline care workers in the private sector is just £8.80 an hour, or £308 per week (for 35 hours).

New analysis for the TUC by the High Pay Centre looks at the average total remuneration for the top paid director in some of the largest private sector care firms. As well as their basic pay, this includes additional remuneration such as bonuses and dividends.

It finds that average annual remuneration for these directors was £976,400 (based on their most recent annual reports). This equates to £3,755 per day, or £18,777 per week.

Pay gap with local authority care

Care services in England can be provided either directly by local authorities, commissioned by local authorities from private firms, or directly from private firms to service users.

The figures above, showing that private sector care workers receive average pay of £308 per week and senior directors £18,777 per week, apply to care settings that are commissioned from private firms by local authorities, or directly from private firms to service users.

By comparison, care staff who are employed directly through local authorities have average pay of £10.67 per hour, or £373 per week (for 35 hours).

This means that staff employed directly by local authorities earn on average £1.87 an hour more than those in the private sector, which equates to £65 per week (for 35 hours), or £3,400 per year.

The TUC says that the pay gap is a stark illustration of how the private sector model of care delivery is failing the care workforce.

Prime Minister’s commitment to ‘fix social care’

The Prime Minister Boris Johnson – who would have to work for 6 years to earn the same amount as the annual amount as a senior private sector care director – has promised to fix the UK’s social care system.

When he first became Prime Minister in July 2019 he declared: “We will fix the crisis in social care once and for all with a clear plan we have prepared.”

However, in the two years since making the promise, no plan has been published. And the TUC says that the care sector in England remains beset by problems of underfunding and understaffing that are harmful to both service users and staff.

TUC General Secretary Frances O’Grady said:

“Our care workers put themselves in harm’s way during the pandemic. They looked after many of our dearest family and friends. They now deserve our care too.

“But pay and conditions for care workers are dreadful. And their pay is lowest in the private sector, where boardroom directors make themselves millionaires.

“Care services should not be get rich schemes for greedy executives. Frontline staff deserve better pay for the challenging and vital work they do. And families need the security of knowing that high-quality care is there when a family member needs it.

“The Prime Minister has dithered and delayed for long enough. It’s time to get the job done, with fair pay and conditions for care workers, and a care service the nation can rely on.”

To address the crisis in the care sector, the TUC is calling for:

• A reduced private sector role: The government should strengthen rules to prevent financial extraction in the care sector. The for-profit model of service provision should be phased out, so that all public funding is used to deliver high-quality services with fair pay and conditions for staff.
• A new funding settlement: This year’s spending review, and the long-promised announcement on social care reform, should fully offset the cuts of the last decade and establish future rises at a level that will allow local authorities to meet rising demand and improve pay and conditions for staff.
• Immediate funding to fill all social care vacancies: The government should act now to unlock 120,000 existing vacancies in social care. This will reduce the pressure on care staff who have faced the double stress of working on the frontline during the pandemic, while managing heavy workloads due to understaffing. 
• Fair pay and conditions for care workers: To provide sustainable livelihoods and an attractive career, all social care workers should be protected by a wage floor of at least £10 per hour. There must be an end to the zero-hours contracts, and poor or non-existent sick pay that puts social care workers at risk during the pandemic. And all social care workers must have guaranteed opportunities for training and progression.
• A national Social Care Forum: A new body is needed to bring together government, unions, employers, commissioners and providers to coordinate the delivery and development of services, including the negotiation of a workforce strategy.
• A universal service free at the point of use: The changes above can be made quickly. Longer-term, the government should make social care a universal service, adequately funded by the Treasury, to ensure high-quality social care can be quickly accessed by everyone who needs it, in every part of England, without any variation in cost and qualifying rules.

Editors Note

• Average private sector care worker pay: The TUC used data from Skills for Care for the year 2019/20 to derive the figures used above for average hourly pay for workers in (1) social care settings run by private firms in England – including those commissioned from private firms by local authorities, and (2) social care settings run directly by local authorities.
• Average ‘senior director’ pay: Comprehensive data on private care directors is difficult to obtain as the sector is fragmented, and information about current executive post-holders and their remuneration is hard to obtain.

The TUC therefore commissioned analysis from the High Pay Centre (HPC) that focused on a sample of some of the largest private care firms. The firms included in the analysis are: Barchester, Bupa, HC One, Four Seasons and Care UK.

Analysis by IPPR in 2019 found that these five firms together account for around 17 per cent of all beds in private sector run care homes, and that the private sector accounts for 84 per cent of all residential care beds.

The average figure for a ‘senior director’ was calculated using the full remuneration packages for the highest paid director in each firm. HPC contacted the firms to confirm accuracy of the data obtained from public sets of accounts filed at Companies House.

While the firms confirmed the figures, they declined to reveal who the highest paid director is. It is likely that in most cases, but not all, it will be the chief executive.

• England only: Social care funding, service delivery, and qualification criteria for users are different in Wales and Scotland. The analysis in this release and the TUC’s comments therefore apply to England only.
• Prime Minister’s social care promise: On 24 July 2019, delivering his first speech as Prime Minister outside 10 Downing Street, Boris Johnson said: 

“My job is to protect you, or your parents, or grandparents, from the fear of having to sell your home to pay for the costs of care. We will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.”

However, despite stating a clear plan had been prepared, two years later no plan has been announced, let alone put in action.

• Prime Minister’s salary: The Prime Minister is entitled to an annual salary of £161,401. This combines £81,932 for being an MP, plus £79,496 for his role as Prime Minister.