Government must start small, move quickly and give its new Fair Pay Agreement teeth to improve the lives of England’s 1.5 million care workers

The Government has a once-in-a-generation chance to improve the lives of England’s 1.5 million undervalued care workers through its new Fair Pay Agreement. But to succeed it will need to get it off the ground quickly, start small and give it teeth so that the higher standards it sets are properly enforced, according to new Resolution Foundation research published today (Thursday).

With the Government sensibly removing day-one protection against unfair dismissal from the Employment Rights Bill this week, the Foundation says focus should now turn to the equally important issue of improving wages and conditions in the adult social care sector through the bill’s provision for a Fair Pay Agreement (FPA).

Action to address the gap between the value that care workers provide to society and the pay and job quality currently on offer to them is long overdue. Average pay for frontline care workers in 2024-25 was £12.23 per hour, just 79p above the minimum wage. Unsurprisingly, the sector faces a recruitment and retention crisis, with a vacancy rate of 7 per cent – nearly three times the economy-wide average – and almost a quarter of the workforce leaving their role last year.

The authors say that to make the FPA a success, the current Government should learn from both the UK’s own history and international cases.

Getting the FPA off the ground quickly will be crucial. One cautionary example is the several years of policy design committed to the fair pay agreements in New Zealand, only for them to be repealed within a year following a change of government.

Better learning can be taken from the establishment of the Low Pay Commission in 1998, which had modest beginnings but got off the ground quickly, and over the past three decades has evolved into a core part of the UK’s policy landscape.

To aid this swift start, the FPA should start small and focus on the things that would help to address the recruitment and retention crisis, and matter most to workers – pay, progression and training.

Action on pay is clearly needed, with the share of care workers satisfied with their pay plummeting from 70 per cent in 1992 to just 52 per cent last year.

This poor position for many does not improve with years of experience, due to the sector’s flat structure of pay. A care worker with at least five years’ experience in 2025 could expect to earn just 7p more an hour than those with less than one year (down from 33p in 2016). Gaps in training also limit the sector’s appeal as a long-term career path, with over half of the social care workforce in 2024-25 lacking any relevant social care qualification.

Measures to address low pay and progression, and sector-wide collaboration on training, should therefore be the starting point for the FPA, say the authors. A broader remit incorporating hours insecurity and wider conditions risks getting the FPA bogged down and losing momentum. Other measures in the Employment Rights Bill can help to resolve these problems.

Finally, effective enforcement will be crucial to giving it teeth. Non-compliance with labour market rules is prevalent in the sector, with an estimated 21,000 social care workers underpaid the minimum wage.

The Foundation welcomes that pay-related elements of the FPA will be enforced by the new Fair Work Agency but argues that it should take on a greater role and enforce any elements of the FPA where there is a clear case of non-compliance.

Charlie McCurdy, Economist at the Resolution Foundation, said:

“England’s 1.5 million care workers provide a vital service to the country but are undervalued by society. A new Fair Pay Agreement provides a once-in-a-generation opportunity to improve their lives and avert a deepening staff-shortage crisis.

“The Government should get the new body up and running quickly and keep its initial focus on the core issues of pay, progression and training. The new body will also need teeth to ensure that the higher standards are enforced.

“A successful Fair Pay Agreement for social care could provide a viable model for workers in other low-paid sectors like warehousing and cleaning. Getting it wrong risks squandering yet another opportunity to improve, rather than run down, social care.”

Melanie Simms, Professor of Work and Employment at the University of Glasgow

“We need to learn lessons from other countries, and our own history, and move quickly to improve working conditions for care workers.

‘’Getting social partners around the negotiating table to bargain is the most important first step. The success of the Low Pay Commission proves we can get this right.”