The Week

The Week, 14 October 2022

In the week that the IFS published their annual Green Budget, revealing the need for £62 billion of fiscal tightening in 2026-27, our Prime Minister reassured the country that there would be no more departmental spending cuts. With Kwasi Kwarteng out as Chancellor, we’ll see how long that commitment, and the mini-maxi-budget, lasts.

Meanwhile our public services continue to struggle. The social care crisis is deepening, with the number of vacant posts in adult social care increasing 52% in just one year. Analysis by Skills for Care confirms that low pay, insecure employment and lack of career progression compound to explain the high turnover rate. “On average, care workers with five years’ (or more) experience in the sector are paid 7p more per hour than a care worker with less than one year experience” and care workers get £1 less per hour than a new healthcare assistant in the NHS. No wonder carers are leaving in droves.

One, unsurprising, impact is the prevalence of poverty in the care sector. This week the Health Foundation revealed that 1 in 10 residential care workers experience food insecurity and 1 in 8 children of residential care workers experience material deprivation. A care worker is more likely to live in poverty than almost all other sectors. The stats speak for themselves. The fact that work is not a pathway out of poverty for this group underlines the gravity of the problem. And with 19.6% of the residential care workforce on Universal Credit or legacy benefits — in comparison to 5.1% of all workers — any cuts to welfare will be devastating.

None of this is new, we have been talking about the crisis in the care workforce for years, yet it’s 13 years since an adult social care workforce plan was published in England. The new health and care secretary Thérèse Coffey did announce a welcome £500m Adult Social Care Discharge Fund, but if there are no staff, who are these patients being discharged to? Which again shows: fixing the NHS crisis means fixing the social care crisis.

Another public service under strain is education as the affects of the pandemic continue to reveal themselves — with poorer pupils suffering most. According to a study from UCL and the Sutton trust published this week, half of disadvantaged pupils in Years 10 and 11 (the crucial GCSE years) had missed at least 10% of in-person sessions, compared to just over a third of non-disadvantaged pupils. And pupils at comprehensive schools were “the least likely to think they had been able to catch up, at 34%, compared to 50% of students at grammar schools, and 58% at independent schools.”

In addition, overall 4 in 10 pupils disagreed they felt prepared for the next steps post-school. If the Government is all about growth, investing in a highly skilled and educated workforce should be high on their agenda.

Speaking of skills, the Learning and Work institute have their own ideas of how to address inactivity and boost growth. While their report is a few weeks old now, their CEO, Stephen Evans, re-upped the paper in a Twitter thread responding to this week’s worrying labour market stats: “Only 1 in 10 out-of-work over 50s & disabled people get employment support. Changing that would cost c£500m pa, but boost the economy by £23bn & save the taxpayer £8bn a year. Aiming for 80% employment rate would be a supply-side reform to boost growth”.

On to the reads…

First up, a remarkable excerpt from Dame Kate Bingham's forthcoming book on the development of the Vaccine Taskforce. It reiterates a lot of what we know is wrong with the current Whitehall model, from Treasury penny-pinching and a critical lack of scientific and business skills (from both civil servants and politicians), to an institutional fear of risk that acts as a disincentive to innovation. Her claim that she "entered a world where process apparently mattered more than outcomes" is a point Reform has long made. Our newly launched Reimagining Whitehall programme is exploring exactly how to solve these barriers to performance.

Next up, this JRF blog, which gets into the weeds of how low-income households in different parts of the country are experiencing the cost of living crisis, is also worth a read. In a survey of 4,000 people, it finds that low-income Londoners — measured as being in the bottom 40% of the household income distribution — are more likely to report “going without essentials” (67%), being in rent or energy arrears (c. 22%), and having to take on new debt (c. 40%), than other parts of the country. The North of England, Scotland and the Midlands are the regions next hardest hit. One important factor in this is the rising cost of rent. Over half of Londoners rent, and those renting are far more likely to rent from private landlords than people living in other regions — meaning low-income households typically spend a higher proportion of their income on (rapidly rising) housing costs than elsewhere.