Investors Must Act to Improve Labour Standards in England’s Care Sector
17.12.24
The adult social care sector in England is at a breaking point. A new report by the University of Nottingham, funded by the Friends Provident Foundation, sheds light on the systemic challenges plaguing the sector and gives recommendations on how to fix them. These include exploitative labour practices, financial instability and opaque business models.
With the majority of these care services now delivered by private, for-profit providers, investors are in a powerful position to demand changes that benefit both workers and care recipients.
The state of social care: A troubling reality
The UK social care sector employs approximately 1.79 million people, mostly women, with this workforce expected to grow by 490,000 by 2035. Yet, the sector is characterized by low wages, limited career opportunities and persistent staff shortages – with 152,000 vacancies reported in 2022-23.
The government has relied heavily on transnational migrant workers to fill gaps, and this has led to a rise in reported labour exploitation cases. There was a spike in the number of reports by care workers to the UK’s Modern Slavery helpline, with 918 potential victims identified in 2023 alone.
The role of investors and government: Ensuring financial and social sustainability
Investors hold significant leverage over the practices of the care home sector, valued at around £15.9 billion a year in 2017 by the Competition & Markets Authority. As responsible actors, they can implement strategies to ensure financial and social sustainability – including an end to exploitative working conditions.
The report highlights key recommendations for investors, including:
- Investors with direct links to care operators and properties (e.g., private equity firms and real estate investors) should adopt measures to set and monitor labour standards and conduct labour-related due diligence on the companies in which they invest.
- Investors with indirect links to care operators and properties (e.g., pension funds) should explicitly expect private equity firms and real estate investors to follow recommendations around labour due diligence.
Additional recommendations for the government include:
- The UK government should legislate to ensure that care workers have the right to organize and engage in collective bargaining.
- The UK government should ensure that any funding improvements are tied to care quality and minimum safe staffing levels.
Charlie Crossley, Investment Engagement Manager at Friends Provident Foundation, said:
“Investing in the care sector is a crucial underpinning to a fair and sustainable economy. This research highlights serious challenges and risks to workers. It also provides actionable strategies to drive improvement. Leading investors are already showing how more responsible practices can reshape the sector. With demographic trends pointing to growth, investors and government have an unprecedented opportunity to create a more ethical, sustainable care system.”
This sentiment was echoed by Alan Sable, Head of UNI Care, who said:
“Through the Investor Initiative for Responsible Care (IIRC), we’ve seen how important it is that investors take an active role in due diligence in the care sector. We welcome this important research, and these recommendations are a critical part of the massive multi-stakeholder approach we will need to get care providers and REITs to put human life and people at the centre of long-term care.”
Launched in 2021, the IIRC, supported by UNI Global Union, has set due diligence expectations for long-term care employers to improve working conditions and care quality. Since its inception, the initiative has swollen to 161 investors with a total of US$4.4 trillion in assets under management and advice who have signed a statement of expectations for the sector including to see improvements in:
- Staffing levels
- Freedom of association and collective bargaining.
- Health and Safety
- Wages and contracts
- Quality of care
