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Social workers on agency rates – we need to abolish national pay scales

Summary:
The Guardian tells us that local councils just can’t find the staff these days. Social workers are being hired through agencies, on locum conditions, rather than being directly employed by the correct social services. We don’t doubt their data but they do seem remarkably uninterested in the reason why this is occurring, that essential precondition to being able to design an answer: Local authorities are having to spend millions of pounds on social work agencies as they struggle to recruit permanent staff, with some authorities employing nearly half of their children’s social workers through private companies, a Guardian investigation has found.Data obtained through freedom of information requests shows that many English councils are routinely spending tens of millions of pounds – a total

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The Guardian tells us that local councils just can’t find the staff these days. Social workers are being hired through agencies, on locum conditions, rather than being directly employed by the correct social services. We don’t doubt their data but they do seem remarkably uninterested in the reason why this is occurring, that essential precondition to being able to design an answer:

Local authorities are having to spend millions of pounds on social work agencies as they struggle to recruit permanent staff, with some authorities employing nearly half of their children’s social workers through private companies, a Guardian investigation has found.

Data obtained through freedom of information requests shows that many English councils are routinely spending tens of millions of pounds – a total of at least £335m in 2017/18 – hiring agency social workers.

Experts said the difficulty experienced by councils in attracting permanent staff meant vulnerable children and families were often seeing multiple social workers in a single year, making it harder for them to engage with services.

They said the large-scale use of agency social workers was a poor use of dwindling local authority funds, as locums received a higher hourly rate than permanent staff, on top of the fee paid to the company they were employed through.

As of September last year, 26 local authorities got more than 30% of their children’s social work staff from agencies.

The important word in all of that is “some”. Well, which? Even a casual eyeballing of their data shows that it is expensive areas - rich if you prefer - in the South, SE and London that do.

This reminds of that study of nursing wages - national pay scales kill:

In many sectors, pay is regulated to be equal across heterogeneous geographical labor markets. When the competitive outside wage is higher than the regulated wage, there are likely to be falls in quality. We exploit panel data from the population of English hospitals in which regulated pay for nurses is essentially flat across the country. Higher outside wages significantly worsen hospital quality as measured by hospital deaths for emergency heart attacks. A 10 percent increase in the outside wage is associated with a 7 percent increase in death rates. Furthermore, the regulation increases aggregate death rates in the public health care system.

To invent numbers just as examples, if the national pay for a senior nurse is £30,000 a year and we’ve two different labour markets, one where pay is, on average, £40,000 a year, the other £20,000, then we’re going to have a different labour supply of nurses in the two areas. One will find it easy enough to gain the staff required to run a hospital, the other won’t. Which is indeed what we do find. Hospitals in higher pay areas - aka richer areas - tend to be understaffed and use more agency workers than those in lower pay - aka poorer - areas.

This is exactly what we’re seeing with social workers. For note what isn’t being claimed - that there’s a national shortage. Only that certain locations cannot, at current national (yes, we know there’s a London weighting but it’s small) pay rates gain the staff they desire. The solution is thus obvious, abolish the national pay scale and make wages whatever they need to be to gain the required staff in the desired location.

Government figures show there were 5,810 children’s social worker vacancies in England in September last year, with rates ranging from 6% in Yorkshire and Humber to 26% in London.

Quite. Localise wages then.

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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