May WorkerTech Roundup

This month, we’re focusing on the government’s decision to end overseas recruitment for care workers, a move that’s raising concerns about staffing shortages in an already stretched sector.

We also delve into the latest insights from the Resolution Foundation, covering the impact of planned welfare reforms and public investment strategies ahead of the 2025 Spending Review. Also included: the British Venture Capital’s recommendations for the Government, setting out how private investment could play a role in boosting growth.

Let’s dive in.

Until next month,
Aish Moothan
Ventures Manager, Resolution Ventures

Spotlight: Migrant Workers and the Care Sector

In May 2025, the Government announced plans to end the recruitment of care workers from abroad. This move is part of broader immigration reforms aimed at reducing net migration by approximately 100,000 annually. The decision has raised concerns about exacerbating existing staffing shortages in the adult social care sector, which has historically relied on international workers to fill vacancies. While new overseas recruitment will cease, current foreign care workers in the UK may extend their visas. Employers have been encouraged to focus on domestic recruitment and training. Care providers and unions have expressed alarm, warning that the policy could lead to “extreme workforce shortages” and negatively impact care for older and disabled individuals.

The Resolution Foundation recently wrote about the experiences of foreign-born workers in our April 2025 Precarious Prospects. We found that foreign-born workers are more likely to be in precarious employment compared to UK-born workers. Approximately one in six foreign-born workers is in some form of atypical or insecure employment, such as temporary or gig economy roles. An earlier Resolution Foundation report from 2023 surfaced the significant challenges faced by workers in the care sector, including low pay and high vacancy rates. In 2021-22, over 11% of the frontline care worker jobs in England were vacant, up from less than 5% in 2012/13. The 2023 report contains first-hand accounts of experiences in care, which you can read here.

Staff shortages as a result of immigration changes won’t just affect those who receive care, but an impact will also be felt on future workforces, who will be asked to enter an understaffed sector facing the challenge of caring for an ageing population; the age group that is likely to grow the fastest over the next two decades in the UK is the ‘oldest old’, with the number of people over the age 80 expected to double, from 2.7 million today to over five million by 2037.

Our portfolio company, Equal Care Co-op (ECC), has previously highlighted how Black and Asian migrant women provide a significant portion of care and support in the UK. In February 2024, ECC partnered with the Pan-African Workers Association to gain deeper insights into the vulnerabilities and exploitation faced by migrant care workers. Their collaboration aimed to understand and mitigate the challenges these workers encounter in the sector. They found widespread reports of exploitation by care workers’ employers with limited routes for redress due to their legal status in the UK. These issues were particularly prevalent in Hackney (a borough of London), where 41% of care and support workers are from racial minorities. Read more about ECC’s work here.

Latest insights from the Resolution Foundation 

No Workaround

The Resolution Foundation’s latest report, No Workaround, critically examines the government’s proposed welfare reforms outlined in the Pathways to Work Green Paper. These reforms aim to reduce disability and incapacity benefit spending by £4.8 billion by 2029–30, while allocating £1.9 billion towards employment support over the same period.

The reforms are projected to increase employment by a maximum of 105,000 individuals by 2029–30. However, this figure represents only 3% of the 3.2 million families adversely affected by the benefit cuts. Our research finds that an estimated 250,000 people will fall into poverty due to these reforms, with 700,000 families experiencing a deeper descent below the poverty line.

The most significant income losses will be borne by recipients of Personal Independence Payments (PIPs), averaging £4,200, annually. In contrast, gains from the Universal Credit standard allowance increase will average only £265 per year.

Over half of the planned employment support funding is scheduled for the final year of the implementation period, limiting its potential to mitigate the immediate financial hardships faced by those on low-to-middle incomes in the UK.

The report underscores that while the intent of the reforms is to encourage employment, the anticipated job increases are insufficient to counterbalance the significant rise in poverty and income loss that low-income families may face as a result of the reforms.

Capital Gains

A new report from the Resolution Foundation assesses the UK’s public investment challenges ahead of the 2025 Spending Review, highlighting current weaknesses in social infrastructure spending and setting out how targeted investment could bolster growth and raise living standards.

The report reveals that the UK has experienced chronic under-investment in social infrastructure, with NHS hospital bed numbers 2,000 per million below the OECD average, a one-third reduction in affordable housing stock since 1980, and prisons operating at 110% capacity.

While economic infrastructure projects have received increased funding, social infrastructure has lagged, necessitating a rebalancing of investment priorities. Studies suggest that a permanent 1% increase in investment could deliver around a 4.9% boost to GDP in the long run, with social infrastructure contributing a significant 3.5% boost.

Also in anticipation of the Spending Review, the British Venture Capital Association has set out recommendations for the Government, which outline how private investment could play a role in meeting socioeconomic challenges and driving growth. These include:

• Expanding the British Business Bank’s remit to support growth capital funds, particularly those targeting regional investments;
• Pension reforms to realise the untapped potential of UK pension funds, drawing inspiration from the Tibi scheme in France.

Supporting the role private capital can play in the UK’s net-zero transition and directing funding towards technologies and initiatives that tackle green skills shortages  (such as our portfolio company, Greenworkx).

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