Turn social care into a major economic sector, new report urges

Social care may be on the brink of crisis but the sector has the potential to become a driver of local economies.

A report by the New Economics Foundation for Localise West Midlands as part of the Good City Economies programme, has called for a re-framing of social care as a ‘major economic sector’.

Shifting social care away from large-scale providers and prioritising and promoting community-scale care provision could transform the sector, creating high quality jobs and improving standards of care across the region.

The report, Social Care as a Local Economic Solution in the West Midlands, was scoped by a group of organisations active in the region on inclusive economics and social care.

Social care is a ‘dysfunctional system dominated by “too big to fail” companies’, it says. For while the ‘big five’ care providers appear to offer lower costs, almost a third of their spend goes to shareholders.

‘The re-framing of social care models

a new approach to local economics’

Data cited in the report shows that the UK’s five biggest chain social care companies offer big returns to investors, taking up 29% of their costs —the second-biggest drain on expenditure after staff wages.

It calls for the West Midlands Combined Authority (WMCA) to prioritise new models of care and establish a community care innovation unit.

Community-led care providers tend to keep money in the local economy and offer more personalised care for the same cost. A regional ecosystem of smaller-scale care businesses, such as West Midlands-based Crossroads Care, could ensure public investment in social care is re-invested in communities.

This re-framing of social care models a new approach to local economics, one that is aligned with the assets and needs of communities rather than focused on economic growth and inward investment. This ‘foundational’ approach to local economies could be extended to other sectors such as housing, food and utilities.

David Powell, subject lead at the New Economics Foundation and author of the report, said, ‘Social care is on a cliff-edge. New ideas are desperately needed. The West Midlands can transform the perception of the care sector in the region: a growing economic sector with the potential to meet a diversity of skills, employment and economic needs for communities that aren’t helped by GVA-driven economic strategies.’

Following calls by the new mayor of West Midlands Andy Street for greater diversity in the provision of all public services, this timely report sets out the benefits of a more localised social care system.

Localise West Midlands, who commissioned the report said: ‘The West Midlands coordination role and the election of its first mayor – who has committed to not-for-profit models of public service provision – places it in a unique position of leadership.

‘The region has an opportunity to be visionary if it understands how sectors like social care can provide careers in places where people live meeting local needs. To deliver its commitment to inclusive prosperity the WMCA will need strategies like this based on real local needs and assets, and to create an economy in which we all have an ownership stake.’

The Good City Economies project is a joint programme of work by the New Economics Foundation and the Centre for Local Economic Stategies to embed new approaches to local economic development. It is funded by the Friends Provident Foundation.

• Read the full report here.