Why Invest in Adult Social Care?
Adult social care is a vital but overlooked sector in England. It is one of England’s largest sectors, employing 5% of the workforce, and larger than the NHS, yet operating on a fraction of its budget. According to the State of the Adult Social Care Sector and Workforce in England 2024 report, adult social care contributes £68.1 billion to the economy, up 13.2% from the previous year. The most recent Skills for Care and KD Network Analytics report, The Value of Adult Social Care in England (October 2021), shows a return on investment (ROI) of 175%, meaning that for every £1 invested in ASC, £1.75 is returned to the economy.
Beyond the economic benefit, the 2021 report estimated that a further £7.9 billion could be gained through increased employment opportunities for carers and working-age adults, as well as improved wellbeing for carers and family members. Furthermore, investment in ASC would relieve pressure on the NHS, generating savings that align with government goals to grow the economy, improve wellbeing, and reduce healthcare costs.
The evidence is clear: investing in adult social care offers both economic and social returns, yet, the sector remains under immense pressure. According to the Care England Sector Pulse Report 2023, 43% of care providers have closed parts of their operations or handed back contracts, creating significant capacity issues for local authorities. Investment in adult social care is critical to addressing these challenges, particularly in terms of higher wages, better staff training, clear career progression, and appropriate rewards for skilled workers. These needs are consistently highlighted in recent Skills for Care reports, the most reliable source of workforce data for adult social care in England.
Economic Impact of Adult Social Care
The 2021 report also points to the significant economic potential of adult social care across the country:
“Sustained growth in adult social care will boost local economies via the induced and indirect effects. The resultant economic growth would take place throughout England, but would have the greatest impact in Northern and Midlands regions, where adult social care GVA (Gross Value Added) is around 2% of total GVA compared to less than 1% in London and the South East.”
From a levelling-up perspective, investment in adult social care could generate widespread economic benefits, particularly in the North and Midlands, where adult social care workers are more concentrated. The additional earnings of care workers in these areas would be spent in local economies, stimulating growth in less affluent regions and helping to address economic disparities across the country.
Why Isn’t the Government Investing?
Despite overwhelming evidence supporting investment in adult social care, the government has been slow to act. Why?
Is it because they don’t see boosting economies in the North and Midlands as a priority? Or perhaps adult social care, with its 30,000 separate care providers, lacks the political appeal and cohesive identity of the NHS? Could it be that the government has failed to fully engage with the sector, despite countless reports warning of an impending crisis? Unlike the NHS, adult social care is seen as a local government responsibility, which may explain the lack of meaningful engagement from central government. This inaction persists despite numerous reports highlighting the impending crisis in the sector.
By delaying investment, the government is exacerbating adult social care’s financial struggles. Providers have faced over a decade of reducing profits, and critical inward investment – vital to both sustaining the sector and driving economic growth. The consequences of underfunding are already apparent: reduced service quality, unmet needs, and increased pressure on both adult social care and the NHS. As the strain on these systems grows, so do long-term costs and the can is kicked even further down the long trodden road.
Local authorities, which commission adult social care services, are also under financial strain. This year, several councils have issued Section 114 notices, signalling their inability to meet their statutory duties without dipping into reserves. They lack the funding necessary to invest in adult social care and its workforce.
The Cost of Inaction
Continued inaction by the government does more than harm adult social care – it stifles the sector’s ability to support the NHS, invest in local economies, and improve community health. For over a decade, reform has been delayed, fair pay agreements remain unfunded, and the much-needed workforce strategy has yet to be realised but has been promised for years.
Meanwhile, the government faces a £22 billion economic gap. But instead of recognising adult social care as a solution to plug that gap, attention remains focused on sustaining a struggling NHS and honouring overseas aid and defence commitments, neither of which contribute to the UK economy in the same way as adult social care can.
The evidence shows that addressing issues in adult social care could help solve some of the NHS’s biggest challenges, such as delayed discharges and long waiting times. Community-based care would also enhance population wellbeing and prevent future health crises. With adult social care generating a 175% ROI and contributing 13.2% more to the economy in the last year alone, it is baffling why the government continues to overlook the sector’s potential to reduce the £22 billion deficit, support levelling-up efforts, improve wellbeing, and relieve pressure on the NHS.
The Solution: Invest Now
The solution is simple and clear. While there is debate over exactly how much adult social care requires – estimates suggest upwards of £10 billion – this investment would yield a return of £7.5 billion in additional economic benefit, particularly in the North and Midlands. This could cover more than a third of the reported £22 billion deficit. Furthermore, investing in adult social care would ease the strain on the NHS, improve population wellbeing, and strengthen local economies in North and Midlands areas.
If the government’s priority is balancing the books, adult social care presents a compelling case. Redirecting funds from areas like overseas aid or defence – sectors that do not provide the same economic return – could provide the necessary capital to support adult social care. Such an investment, with its 175% ROI, would also attract further overseas investment, adding additional and greater value to the UK economy.
The Billion-Pound Question
Given the clear economic and social benefits, the real question is: why isn’t the government investing in adult social care?
The answer seems twofold. First, the people who rely on adult social care – elderly individuals, those with learning disabilities, and adults with autism – are not seen as political priorities. Second, the £10 billion investment needed to sustain the sector is viewed as politically unpalatable in a government fixated on balancing the books. Yet, failing to invest now only increases future costs, both financially and in terms of human wellbeing.
If the government is serious about closing the £22 billion economic gap, boosting regional economies, improving population health, and supporting the NHS, then it must take action. The solution is clear, the benefits are proven, and the time to invest in adult social care is now!
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