Social worker salaries: are permanent staff now better off than agency?

A Community Care investigation has revealed regional pay rates, the difference between adults' and children's social workers and how agency pay is changing

Amid ongoing controversy over a tax crackdown on independent contractors working in the public sector, the earnings gap between agency social workers and permanent staff is tightening, a Community Care investigation reveals.

For years, the hourly rates and potential for high take-home pay available to locums employed via recruitment agencies has been a significant attraction to social workers looking for an alternative to full-time local authority employment, and the appeal hasn’t vanished.

Responses from 107 councils to a Community Care freedom of information (FOI) request shows that in a handful of English local authority areas experienced qualified social workers can still command more than £35 per hour. That equates to a nominal annual pre-tax pay of at least £62,100.

By contrast, the highest basic top-line salary provided to us for a similar staffer was just over £45,000, in London’s Westminster. Across most of the country, such a social worker could expect to earn much less, between £33,000 and £37,000, before tax.

But such comparisons do not tell the whole story. The investigation, which aimed to ‘price up’ different social work grades and uncover how much temporary and permanent workers cost councils, also shows the extent to which regional caps have driven down agency rates in many areas.

Combine this picture with HMRC’s tax changes last April to off-payroll working rules – so called IR35 legislation – and it’s easy to see why there’s talk of agency workers, who mostly receive no sick or holiday pay, moving back into permanent employment.

This first of a two-part report based on our FOI research, looks at what permanent and temporary social workers can earn in different regions – and what, in the post-IR35 landscape, they might take home.

Permanent consistency

Across most of England, the basic salaries councils said they pay permanent social workers were remarkably consistent.

Within children’s services, five of the nine English regions’ median rate for an experienced qualified social worker at the top of their pay scale was between £32,500 and £34,400. The national median was £35,444. A similar picture could be seen among advanced practitioners (national median £40,038 at top of pay scale) and frontline team managers (national median £45,471 at top of pay scale).

Children’s social worker pay: permanent staff

Use our interactive map to look at the top pay scale for social worker roles across England.

Pay rates in adults’ social care closely mirror those of children’s. Asked about the same grades of employee, the national top-of-scale medians were identical for experienced social workers while for advanced practitioners and team managers the figure was slightly lower at £39,937 and £44,030 respectively.

Adults’ social worker pay: permanent staff

Look at adults’ social worker salaries across England using our interactive map.

“Each social services department will determine the right approach for their local area, based on the different needs of how the demands on social work are felt, and how they impact their local communities,” says Glen Garrod, vice president of the Association of Directors of Adult Social Services (ADASS).

Service directors we spoke to pointed to factors influencing the basic salaries councils pay their social workers, including geographical challenges, workforce supply and demand trends, and budget constraints. Of course, roles with identical job titles may also vary in terms of duties and responsibilities from council to council.

“Where there are more local authorities, in close proximity, people are more mobile,” adds Rachael Wardell, the director of children’s and adults’ services at West Berkshire council and national workforce lead for the Association of Directors of Children’s Services (ADCS). “If [a worker] could check out of this council and get another job half an hour away, you have to be more competitive.”

London’s gravitational pull

Some fierce competition takes place in and around London, where dozens of local authorities sit within commuting distance of one another.

Within the capital itself, the median rate at the top of the payscale for an experienced qualified social worker is £39,855 for children’s services and £40,086 for adults’. Expensive inner-London authorities offer the largest basic salaries, with Westminster paying up to £45,438 for both children’s and adults’ social workers.

London’s gravitational pull is also apparent in the areas surrounding it, particularly in the South East region where, our research found, social workers and frontline managers can attract a basic salary several thousand pounds higher than elsewhere. “The further east along the M4 you go, the higher you’re likely to be paying,” says Wardell.

Examples include Slough and nearby Windsor & Maidenhead where a qualified social worker could command a top scale salary of almost £42,000. In a number of South East authorities frontline team managers could earn more than £50,000.

The impact of agency caps

Memorandums of understanding (MoUs) covering rates paid to agency social workers – particularly within children’s services where demand has tended to be highest – have been big news over the past three years. Interviewed a year ago, regional lead officers said they had been saving many millions and were probably contributing to a less volatile recruitment marketplace.

Capped agency rates are now a feature across most of England. Our FOI data reveals the difference they have been making to agency social workers’ top-line earnings.

In the North East region, which only recently introduced its MoU, South Tyneside council – alone among respondents – provided a direct comparison of ‘before’ and ‘after’ rates. Historically, senior qualified social workers could command £170 a day, the authority said, while advanced practitioners earned up to £193 and frontline team managers up to £229. Since caps had been brought in, the figures had fallen to £147, £169 and £194 respectively – though some North East councils for now still have agency workers on their books at higher rates.

Elsewhere, caps are set at hourly rates, which directors from five other English regions (London, the South East, the East of England, the East Midlands and West Midlands) provided to us.

In London and the South East, qualified social workers receive up to £32, while the other regions pay £28-29. For advanced practitioners the rates are £35 (London and the South East) and £32 (elsewhere), while for team managers they are £42 and £38-39.

All these rates apply to agency workers operating their own limited company – the majority – who pre-IR35 were often liable for far less tax than permanent colleagues, and were able to offset many expenses such for as travel and accommodation.

“The long and short is that most local authorities recruit agency social workers at cap,” says Steve Stuart, the programme manager for FutureSocial, a workforce capacity-building project between the 14 West Midlands councils.

“That said, they can be brought down and if local authorities want to try to bring in some flexibility they can do that,” Stuart says, adding that West Midlands authorities have introduced a 36-point scale for agency workers to help employers.

Bending the rules

But elsewhere we uncovered instances of agency workers still being paid much more – up to £40 per hour for social workers, £43 for advanced practitioners and £50 for team managers.

When we checked these anomalies with individual councils we found some related – as in the North East – to agency workers employed before MoUs came in and still on ‘legacy’ rates. Some councils – Leicester and Leicestershire, for instance – had also been given temporary dispensation to advertise a few hard-to-fill roles at rates outside their MoU.

Others, such as Slough, have been simply unable to sign up to their regional memorandums because their ongoing workforce challenges are too severe.

Finally, we found isolated cases of managers engaging staff at above-cap prices. At one such council, Ealing, the interim director for children and families, Carolyn Fair, told us the practice had only affected three posts and had now been stopped.

But agency sources we contacted, who spoke on condition of anonymity, said it was not an unusual occurrence.

The narrowing take-home pay gap

It’s long been received wisdom that agency workers pocket far more for a day’s work than their permanent counterparts, but is this still the case after last year’s tax changes?

Everyone’s financial affairs are different. We have disregarded bonuses for the purposes of this article, and that’s before we get into the many other factors, such as union subs to name just one, that can affect an employee’s pay packet.

But plugging in a £35,000 salary, with a 5.5% pension contribution, into an online calculator gives a nominal take-home figure of just over £25,500. A £40,000 salary comes out at just over £28,700 and a £45,000 one results in a little under £32,000.

By contrast, an agency worker on a capped rate of £28 per hour and being paid for 37 hours, 47 weeks a year would invoice for £48,692 over the year.

But, as an example in this spreadsheet produced by tax expert Carolyn Walsh demonstrates, they will take home much less. Walsh created the document to show that for most agency social workers, the difference in take-home pay between paying tax through one’s limited company and transferring to an umbrella company will be minimal – except where the umbrella is making a ‘too good to be true’ offer.

By the time employer’s national insurance contributions – which most agency workers have been liable for post-IR35 – and other costs are deducted, a weekly invoice of £1,036 becomes a ‘basic pay’ packet of £926. That translates into a take-home figure of £679 – and because few agency workers will work 52 weeks of the year, this will come down further once it has been spread out to account for unpaid weeks of holiday.

“It is the basic pay, also called deemed or employment income figure, that locum social workers should be looking at when ascertaining their comparative salary figure,” says Walsh. “They should not be thinking that a rate of say £28 per hour payable to their limited company, or to an umbrella company, is their pay rate – but few I see have realised this.”

On the face of it, the agency worker on £28 per hour still stands to take home almost £32,000 – well above their permanent staff peer’s £25,500 – according to Walsh’s calculator. But if you start removing days or weeks for sickness, factoring in costs for training or pensions, or considering the bonuses that may be on the table for new permanent recruits, it’s easy to see that gap rapidly narrowing.

Many social workers have argued they chose the agency life for flexibility – and in some cases freedom from corrosive working conditions – rather than money.

Yet that flexibility has been underpinned by the higher pay, and reduced tax liabilities, which have enabled workers to take breaks from roles that are often stressful even by social work standards. What happens next in the social work recruitment marketplace remains to be seen.

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10 Responses to Social worker salaries: are permanent staff now better off than agency?

  1. Dave February 28, 2018 at 3:46 pm #

    Social workers won’t be on £35/hour PAYE, that would be a (hefty) limited company pay rate including Employer’s National Insurance and Annual Leave. So the equivalent salary figure given in the third paragraph is out by at least £10k.

    Also your pension calculation deducts the pension from the take-home pay, as if it was a cost and not a benefit. Rather the value of the employer’s contributions should be added on as a benefit, locums don’t receive that.

    • Jack February 28, 2018 at 9:03 pm #

      As a locum on £30 an hour using a well regarded umbrella and agency the £679 isn’t too far off the mark… My payslip has employee NI deductions, employer NI deductions, apprentice tax and agency fee. On top of this I do pay a private pension and my own HCPC fees.

      What is missing from this article however is the work of ‘freelancers’ or independent social workers who are paid per task / assessment or job.

  2. Jenni February 28, 2018 at 4:32 pm #

    Locums also have to pay to have their accounts done, pay to travel to work which Locums know are far away from their home region. Locums have to work away from home and travel home at the weekends. Locums also rent accommodation whilst undertaking a locum placement. Locums are not always accepted by permanent workers who do not appreciate how isolated Locums can be and even preparing a home cooked meal is a challenge while staying in cheap B&B or room only hotel rooms. Locums also take the financial hit for accommodation costs. Non of these area have been priced or valued in the above article. Locum agency staff have not been overly paid since 2009-10. Permanent staff have more security, regular benefits, lighter caseloads and more respect. Locum social workers have no security, are vulnerable to the whims of their colleagues, managers, service changes, isolation while living away from home and a heavier workload. Like for like locum workers are allocated more cases then their permanent colleagues a practice that has been going on for years.

  3. Chris February 28, 2018 at 5:18 pm #

    The tone of the article is once more that agency workers are ‘overpaid’, rather than dare to suggest that permanently employed social workers are greatly underpaid for the level of responsibility and expertise they are expected to take on.

  4. The Voice of Reason February 28, 2018 at 6:08 pm #

    Why are independent workers always lambasted? Often we work where no one else will work, do three jobs instead of one.. “oh did we not tell you all our staff left so you will need to cover”, we don’t charge for travel or hotels and all we expect is a decent return on our time.
    We can provide a huge amount of support, consistency, experience and stability to poor teams, for this we expect to be paid well, not much to ask. Also, your sims are way off, I don’t pay myself anything like the rates your tax person is quoting, we need to be able to budget for the down times. ER35 is a joke, loads of LA’s are hiring people as “project workers” time limited to get around the low pay issue.

  5. Jon Gray February 28, 2018 at 9:01 pm #

    Sorry this article misses the benefits for local authority workers which includes index linked pensions, sickness benefit and holiday rates which agency workers don’t get. Without factoring these costs you aren’t comparing the two incomes.

  6. caroline March 2, 2018 at 9:28 am #


    Agency work for me has given me a new lease of life. i dont work for free anymore st evenings and weekends. i have been on the most wonderful holidays for more tjan 2 weeks at a time.

    i am living for now not bothered about pensions or sick pay.

    i will never go back to permanemt life is good, something i could never dsy when permanent.

  7. Karanuts March 5, 2018 at 10:00 pm #

    Misleading article. George Osborne targeted social workers rather than corporate companies for failing to pay their corporation tax or making their management consultants come under the control of IR35. Which for social workers than any other profession, removed the right to a dividend. It also removed the right to claim at 20% of their own salary for accommodation, training and purchase of any items required for their work such as books and work mobiles.

    This forced some locums to work under umbrella companies. George Osborne also made sure that the poor social worker, if they closed their LTD company cannot open one again for a period of two years encase they wanted to work in another self-employed profession.

    Locums also have to pay for an accountant and as said by the above articles, pay for their own accommodation, food, pensions etc. They are not entitled to sick leave or holidays. The one advantage of being a peripatetic worker is the freedom is to move around sharing experiences and to gain a holistic picture of how social work really works in reality than how it should work according to academics.

    George Osborne and Jeremy Hunt have not attacked GPs, Pharmacists over their IR35 and career rewards by way of bonuses. By way of a week represented profession, the locum social worker is left to eat humble pie.

    For the article to suggest that there is a reward still in being an agency worker is far to simplistic. There is no mention of why locums are not given contracts individually rather than having to pay two agencies. One for which the NHS/LA are attuned to and the other, the agency for which they are linked to for potential employees.

    The only difference that George Osborne and Jeremy Hunt are making, is that for some health and social care professionals is to leave the profession altogether. Cynically paving the way for privatisation.

  8. Steve March 6, 2018 at 9:18 am #

    I have worked both as a permanent member of staff and as a locum. For a profession that is meant to adopt anti-discriminatory practice there is a good deal of discrimination and resentment towards locums. I have worked in teams where long term sickness was the culture, and permanent members of staff absolutely milked the system. Including a manager who came back to work 6 months to the day in order to ensure she retained full pay on her return. It might show a little more parity to carry out research of the true costs of permanent staff such as pensions, holiday pay,car allowances, access to training, additional HR costs etc. Along with this there is far more job security as a permanent member of staff. I have worked with some dedicated permanent staff who have showed so much commitment, and for that matter locums who go the extra mile for their team. Ultimately, the role is demanding whatever you modality of employment.

  9. Onthefence March 6, 2018 at 11:33 am #

    IR35 isn’t a new policy – and has existed for over a decade. The policing of it has changed. It’s not just Social workers effected. Did you see the result of the investigation to BBC workers?