Will price caps solve the pay gap between agency and permanent social workers?

With directors of children's services and agency heads at odds over proposals to regulate locum work, we asked practitioners what they thought of the proposed pay caps

Photo by Community Care

In February, the Department for Education (DfE) proposed national rules to regulate councils’ use of agency staff in children’s services, including price caps on what they could pay for locums.

The policy – part of the DfE’s response to the care review – is set to come into force in spring 2024, but is controversial in the sector, as evidenced by two recent Community Care articles.

Kate Shoesmith, deputy chief executive of agency body the Recruitment and Employment Confederation, said the rules would drive locums out of children’s services and not address issues like lack of flexibility, poor pay, caseloads, burnout and work culture.

However, in response, Rachael Wardell, chair of the Association of Directors of Children’s Services’ (ADCS) workforce policy committee, said the rules would help tackle the “unaffordable costs and unacceptable practices of some social work agencies while maintaining a sufficiently flexible agency market”.

Backing the DfE’s proposed price caps, Wardell said there was no justification for two social workers with similar experience and caseloads in the same local authority having very different pay.

How price caps will work

The caps are designed to ensure basic pay for locums is no more than the average for equivalent permanent posts, taking into account contractual differences.

This means agency staff would still receive additional payments above basic pay to take account of the benefits that permanent colleagues receive, such as holiday pay and employer pension contributions.

The capped payment would also include the employer’s national insurance contribution and the agency fee.

The DfE’s view is that the policy will reduce the costs of agency work and the level of workforce instability within councils, by making being a locum a less attractive option.

It is based on the premise that agency staff, generally, earn more than permanent colleagues on a like-for-like basis.

There is some evidence for this. A DfE-commissioned report, published in 2020, estimated agency children and family social workers cost councils 53% more than permanent staff did, after taking into account the latter’s contractual benefits.

And wave five of DfE’s longitudinal survey of children’s practitioners, carried out last autumn, found that better pay was the primary reason why social workers switched to agency work, echoing previous research.


With the proposed rules and price caps being publicly debated by council and agency leaders, we wanted to gauge practitioners’ views.

A recent Community Care poll, which amassed 742 responses, showed opinion was divided on whether the caps would solve the pay gap between agency and council work.

Half of the respondents (51%) said that they wouldn’t work and 45% were supportive of the proposal.

Do agency staff really earn more?

Photo by ijeab/AdobeStock

However, comments sections under relevant articles have been flooded by social workers opposing the proposed price caps.

Under Wardell’s article, many challenged the idea that agency social workers earned more than permanent colleagues on a like-for-like basis, given their lack of benefits such as annual leave or sick pay.

“I have found that many permanent staff have the impression that agency workers are paid twice what they are. Whilst the hourly rate may suggest this, the reality is that take-home pay is not dramatically more,” said Mrs Raisin.

“If we were paid the same as permanent workers we would be substantially worse off than them. Give us the same benefits as well as the same pay and then maybe there might be more of an argument.”

John Gatling, who had previously worked with as a locum, said: “A lot of permanent staff fail to realise that pension, holiday pay, sick pay increase one’s pay by at least 30%. [Then there’s also] the psychological benefits of having relative job security.”

Another reader, George, also asserted that, after costs such as sick pay and annual leave have been calculated, agency practitioners aren’t left “much better off”.

“I have taken two weeks’ leave in two years as an agency worker as I can’t afford the time off just in case I’m sick in the future.”

Steve echoed George’s story: “The biggest sacrifice as an agency social worker is the loss of sick pay. The authority I worked in would regularly have workers off sick for months at a time

“This isn’t a criticism – the reasons were legitimate and social workers should be provided with this safety net. But, as an agency worker, no such safety net existed. If I was exhausted or feeling physically unwell, not only would I lose my pay, I’d also potentially lose my position.”

Increasing pay for permanent social workers

Pay rise

Photo: Adobe Stock/Nuthawut

While others accepted that agency staff earned more than permanent colleagues, they argued that the better solution was a pay rise for council staff rather than a cap for locums.

“The easiest option is for local authorities to pay permanent staff similar rates as agency staff. That way there will be no incentive for staff to go agency,” said Francis.

“Without a significant pay rise on a permanent position, we will lose more workforce,” claimed Mei Wong.

Deb added: “The only solution is for the government to treat all social care staff fairly and provide a good salary with fair pay rises to recognise the great work they do. That way local authorities would retain more staff and need to use less agency staff.”

The case for price caps

However, a few expressed support for the DfE’s proposal.

“I am tired of seeing so-called interims getting £500 a day at middle manager level and £1,000 a day – yes, a day – at assistant director level,” said Jeanette.

“If the agency bill were not so high, councils might have the money to pay their permanent staff a decent wage, and certainly, the quality of some (not all) agency frontline workers leaves a very great deal to be desired.”

Her comments were echoed by Eleanor: “I know a lot of agency workers and it’s hard listening to how much they earn for doing the same job as me. Many of them have been employed frontline for over two years, so there is job security there for those who want it.

“When I find it hard to pay for my heating and the worker next to me is talking about buying a holiday home because they earned so much last year, that is not motivating.”

Another reader, Linda, was pleased with the news of regulations addressing the “eye-watering cost” of employing agency workers.

“Maybe the money saved can help employ more permanent staff and this will help reduce caseloads. Ultimately this means better outcomes for the families and children we serve.”

Do you think price caps are the solution to the pay divide between locums and permanent staff? Tell us in the comments below!

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15 Responses to Will price caps solve the pay gap between agency and permanent social workers?

  1. Not My Real Name August 25, 2023 at 9:20 am #

    “When I find it hard to pay for my heating and the worker next to me is talking about buying a holiday home because they earned so much last year, that is not motivating.”

    Radical idea: why not pay Social Workers enough to at least heat their homes rather than capping pay for the most insecure staff?

    • Blues August 25, 2023 at 6:10 pm #

      @ Not My Real Name…. If it bothers you so much, what is stopping you from being an agency worker?
      Thanks goodness that we live in a democratic country. Being an agency worker is a choice and keeps most of them motivated to keep going. May be if you can’t beat them ,, Join them.

  2. S. Keri August 25, 2023 at 1:39 pm #

    I find quite interesting that Directors are trying to pass themselves as victims regarding agency pay when we know that they would not stop at throwing money around when it comes to projects or making sure their stats are good for ofsted inspections.

    Whilst I sympathise with the idea of councils managing their budgets, I cannot accept the idea that there is a group of evil social workers who don’t care and want money.

    This is a sickening divisive narrative which highlights that neither DfE or Directors have a clue of the real issue at hand, which is staff retention, and if they think they will address this by creating a divisive narrative of a war between permanent and agency staff well they are wrong and it shows how neglectfully all these so called leaders are dealing with Retention.

    Let’s change the narrative here to it is not a capital sin for any worker to request better wages and it is the leaders problem to find ways of recruiting and retaining staff without making it a moral obligation to the staff.

    Instead of wasting energy on trying to portray agency workers as the absolute evil of the earth who are taking money away from families, I would strongly advise leaders and the useless bunch of officials at DfE to start do their job properly without deflecting the blame to people who are used unscrupulously to fill the gaps in the services.

  3. David August 25, 2023 at 4:16 pm #

    Money saved by price caps on agency workers? It will not be used in reducing caseloads for social workers. For years caseloads and tasks have increased significantly and with grater complexity, yet local authorities have done nothing to address these. I cannot imagine that they will do anything further

  4. Damon August 25, 2023 at 6:12 pm #

    The other thing not taken into account is the level of work most agency staff are expected to undertake. When I go to an authority it is because they need desperate turnover and the cases I get have significant drift and delay. I would not come into a low paid job if this was still the expectation, which it will be as this is the reason LAs need agency in the first place

  5. The wider picture August 25, 2023 at 7:45 pm #

    Hi I just want to echo the comments of s. Keri a divisive narrative between perm and locus should not be encouraged and is a distraction. Both don’t do particular well financially and agency often take the roles and areas no one else wants. Social work would be better coming together and saying enough is enough and striking. As long as no action is taken by the profession we will forever be at the mercy of such narratives. There has been significant political neglect of social work, purposefully I would argue, which has led to a lack of preventative and supportive services to families over the last 15 years. This and OFSTEDs skewed inspection methods which focus on written documentation and analysis as opposed to social work observed practice means we have not only record numbers of children in care, (in private provision run by investment companies ) but an obsession with the written word where everything social workers has to be documented to death again which gets in the way of doing any practice. So we have a profession that now has more paperwork than it ever did since baby P no preventative and early help services to speak of, and absolutely no money. This is not because of agency staff costs I might add, but because of placement and care costs. So Let’s not blame agency sws let’s look at the wider picture here of how we got to where we are as a profession and why, but also let’s start to do something about it because this will not be dealt with by capping agency wages that much I do know …..neither will it change if we just sit passively waiting for this to be solved.

  6. Claire August 25, 2023 at 10:01 pm #

    The article does not balance actual pay and benefits clearly to support either side. Agency staff are paid their £ph to include, holiday pay, sick pay. But not pension and do not get paid Wellness days, bike schemes, car lease schemes etc. Agency staff also get higher class loads, more complex cases and less supervision.

    LAs need to ask why staff leave etc and address fundamental management flaws to attract staff retention.

  7. Michael August 25, 2023 at 10:31 pm #

    Why is there no question over the use of agency staff or rates in the health sector with nurses and Drs?

    I’ve met many a locum Dr who say they won’t get out of bed for less than 200k PA. This is obscene. Guarantee interim chief officers will be around the same cost.

    Surely the Dfe and DOH&SC have the actual figures of the cost of senior managers, they need to look at the trends in organisations made up of agency staff and tackle the insidious cultures / incapable managers responsible. Possibly then authorities will retain staff.

    Permanent social workers should have significant pay increases to bring them in line with locum.

  8. No name August 26, 2023 at 8:20 am #

    Price caps will not work and will instead drive workers out of the profession. There is a great misunderstanding that agency social workers are paid significantly more, this is not the case at all. Agency Social Work provides me with flexibility and the ability to try varied roles further developing my skills, however it must be noted there are no benefits like permanent roles and high risk around job security.

    Furthermore, I agree with the comment above, agency workers tend to be allocated the most complex cases, ones often with significant drift and delay and the expectation is that you hit the ground running. You have to become familiar with your case load and provide the family’s a good service quickly, therefore there should be appropriate recompense for this. It must be recognise that work like this can lead to burn out, and whilst permanent staff can go off sick, this is not the case for agency workers.

    I also do accept that social Work in the current times, has its challenges therefore Local Authority’s do need to increase pay for Social Workers. As a profession we are forgotten, and tend to be left out with precedence given the the Health Care staff, teachers, police. Social Worker needs to stand up for itself more.

  9. David August 27, 2023 at 5:00 pm #

    You’re right. My experience of agency is being “dumped’ with cases that have not been actively worked and with little support. Am quite happy to hit the ground running but not to race for a world record

  10. Alex August 29, 2023 at 11:24 am #

    When I was a locum worker (Back in 2019) I earned £35 an hour. On paper over the course of a year it would work out at £62k+ a year but this doesnt factor in bank holidays, annual leave and sick leave. What I found most sobering was when I was applying for a mortgage my bank took the average of my payslips over the 3 month period which worked out to around £42k. This would make sense when considering my annual leave and sick leave.

    I hope the money saved from this cap is used to improve the working and pay conditions for Social Workers across the country. Whilst pay was a strong incentive for me to work as a locum at that period in my life the flexibility I was afforded to just be able to “walk away” was a big factor for me as well. I feel this illustrates the stress we can all feel under in the current social work environment.

  11. Nicola August 29, 2023 at 11:45 am #

    This is a toxic and divisive move which completely diverts attention away from the real issues of an underfunded service (where ALL social workers should be paid more) and a culture in the Local Authorities which inevitably drives too many workers to exhaustion and burnout.

    The whole narrative in the build up to this was framed around agency workers being responsible for LAs being unable to retain and recruit social workers, as permanent staff were rushing off to the promise of an inflated wage with an agency. Utter nonsense. In all my years as an LA social worker, the main reason colleagues leave has nothing to do with pay, and everything to do with total burnout and lack of support. But of course, neither the government nor LAs want to own this one do they?

    I think any trust that was had in ADCS before has been seriously broken. It has effectively absolved itself of all responsibility on this issue fighting tooth and nail to get this policy through. It has got the government off the hook on funding, standing shoulder to shoulder with the DfE on a
    policy that is turning the workforce against each other. And they wonder why social workers think Directors know nothing about their day to day working lives and certainly don’t have their backs.

  12. John August 29, 2023 at 2:34 pm #

    So sad at a time where Social workers the forgotten professionals are needed more now in our society than ever before. The one thing our government do know and directors of service do know is, we don’t have enough practitioners to support the demand from the most vulnerable in society. The response a 3 year review, spending alot of money and not just saying lets look at the real problem. The profession is not attractive enough to enough people in society.
    It’s seriously hard and stressful role, when resource is short it is even more stressful, So the government have come up with the idea to get more social workers is to give a percentage of the market even worse terms and conditions.
    However you cut this, The association of directors leaders and DfE are not really looking at the real problems or prepared to address them. instead create a side show and infact the net result is just less practitioners. This is so basic, make the profession more attractive or provide a much worse service to the most vulnerable in society.

  13. Debbie August 29, 2023 at 4:17 pm #

    Im agency for other reasons than the pay. I need part time now as im getting older. Part time roles are very hard to find, the best alternative for me now will be to work a contract then have a break in an ongoing cycle, i dont want to retire as i hav a lot to offer yet.

    I enjoy joining a team who are struggling due to staff sickness, high workloads etc and taking the burden off that team. Not everyone sees it like this but most do and are happy for the extra pair of hands.

    If someone is off sick long term, are you not better having someone willing and ready to step in and help? Dont forget the authority are paying the person thats off sick too…ive just accepted a 12 week post while an authority recruits, would you rather those guys struggle???

    I was a paediatric nurse when my children were small 1996-2007 and had to be agency then too to get childcare friendly work. I often got critisized then too but i took all the rubbish night shifts ect many didnt want.

    We will never keep everyone happy, but im a helper and i like to help a team if i can, not one of the teams i have legt have wanted me to leave (5 teams)i also enjoy new experiences and the learning that brings.

    Now the money thing is a different story altogether, getting rid of umbrella companies is a must as they divert a lot of our earnings and also charge fees, currently £24 a week for a payslip…… ive has to move on from a few as they did not seem honest enough for me. Finally dont forget the hourly fee everyone talks about is also the employers contributions for Tax and NI, we dont get that but the hourly rates being discussed imply we get the whole amount. Just to be clear, we pay employers tax and Ni insurance and employesr pension contributions out of our hourly sum, think about it….

  14. Claire Henderson September 4, 2023 at 11:38 am #

    I have recently had to come back to agency due to having to resign after nearly 4 years as a temporary/fixed term contracts. Its hard out there as since covid many teams have high caseloads, complex cases and alot of vulnerable people with mental health and lifestyle choices. Also an entitlement. The rates are high as this is the scarcity model, people dont want to be social workers as its extremely stressful and the division is real and the narrative from government is to vilified the profession, so to get the workers the rates are higher, this is also that agencys cream more off the worker in fees. We dont get sick pay, holiday pay, able to take time off and end up in teams that have all the staff leave or go off sick. Yes if you need agency its because you need extra help, I am in a team that is 3/4 agency. There should be a parity but have the same access to the benefits. Until there is regulation with recruitment agencies we will be here, until social care is seen as a good role and high waiting lists are dealt with we will be here.