Children’s home staff paid over 20% more by councils than private sector, research reveals

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Staff without supervisory responsibilities who worked for councils earned £3-£3.75 more than similarly-experienced counterparts in the private sector, which accounts for the vast majority of staff, found the Department for Education’s (DfE) 2024 children’s home workforce census.

At the same time, registered managers earned £5 per hour more in local authority than private sector services in 2024.

Overall, recruitment and retention challenges in the sector have eased since 2023, amid significant growth in pay. However, 62% of homes reported finding it difficult to recruit care workers, with 59% finding it a challenge to recruit managers, in 2024.

A growing sector and workforce

The latest census, carried out for the DfE by the National Children’s Bureau (NCB) and consultancy Verian, involved a survey of registered managers in autumn 2024, along with qualitative research with 64 staff from 20 homes conducted the previous year.

In total, 703 homes responded to the survey, 19% of the 3,646 then registered with Ofsted in England. Based on the results, researchers calculated that there were 46,330 staff in the sector, up from the 39,300 estimate generated by the 2023 census, carried out in spring of that year.

The 18% growth in the estimated size of the workforce is of a similar order to the 21.5% growth in the number of registered homes over the same period.

Overall growth in pay amid easing of recruitment pressures

Average hourly pay for care staff in non-supervisory roles rose from £11.97 to £13.06 per hour between the 2023 and 2024 censuses, a rise of 9%, while there was an 8.5% increase in average registered manager pay, from £20.75 to £22.51 per hour.

Contrary to the situation in adult social care services, average pay rose significantly with workers’ experience, with staff with a year’s experience earning £12.50 an hour on average and those who had spent five years in the sector receiving £14.59 an hour. This 16.7% gap was higher than the 13.7% deficit recorded at the 2023 census, when pay for staff with less than a year’s experience averaged £11.11 an hour and that for those with five years’ experience was £12.63.

Alongside the increase in pay, registered managers reported a less challenging recruitment and retention position than at the time of the 2023 census:

• 47% reported no care staff vacancies, up from 38% in 2023. The mean number of vacancies per home fell from 1.6 to 1.25 from 2023-24.
• Staff turnover had fallen slightly, from 31% in 2023 to 29% in 2024.
• 29% of managers said they had used agency staff less than was the case 12 months previously, with 14% using them a similar amount and 9% less frequently. As in 2023, two-thirds of providers had not used agency staff in the previous four weeks.
• 62% reported filling vacancies for care staff within three months, up from 52% the previous year.

There was also a fall in the proportion of managers reporting difficulties filling vacancies; however, almost two-thirds (62%) reported such difficulties, down from 69% the year before. As in 2023, the leading reasons for recruitment challenges were having too few applicants with the right experience (cited by 74% of managers), right skills (66%) or right attitudes (57%).

Pay inequalities between councils and private sector

As was the case with the 2023 census, pay was markedly higher in local authorities than in the private sector, which accounted for 83% of Ofsted-registered homes in England as of March 2024.

Care staff in a non-supervisory role were paid £15.88 per hour by councils, compared with £12.44 in the private sector, a 28% gap. This could partly be explained by the greater level of experience of council children’s home staff, 47% of whom had six or more years’ experience, compared with 27% of private sector staff.

However, the pay gap still exceeded 20% when broad levels of experience were taken into account.

Differences in qualification levels 

Another factor in the pay gap, overlapping with experience level, was how likely care staff were to hold a level 3 diploma for residential childcare (or equivalent), which they are required to complete within two years of taking up a position.

Average pay for those with a level 3 was £12.84 an hour, compared with £12.49 for those who were working towards this. According to the census, 80% of council staff without managerial or supervisory responsibilities held the diploma, compared with 41% of such private sector staff and an overall average of 51%.

There was also a 23% gap in the pay of registered managers, with those working for councils earning £26.43 per hour, compared with £21.46 for their private sector counterparts.

Comparison with adult social care

As councils are statutorily responsible for care placements, private children’s homes are commissioned by them to accommodate children, meaning local authority budgets are the source for the pay of staff in both sectors.

Skills for Care data on the adult social care workforce shows a similar gap in the pay of care staff to that in children’s homes.

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Council senior care workers earned £15.04 per hour on average as of March 2024, compared with £12.04 in the independent sector, while support and outreach staff were paid £14.16 an hour on average by local authorities and £11.11 by independent providers.

The gap was smaller among care workers, who were paid £12.43 an hour on average by councils and £11.23 by independent providers.

Differences in needs profile of children

The latest available data on the unit costs of council and private children’s homes showed that the former cost £4,865 per child per week, and the latter £4,153 per week, in 2021 (source: PSSRU, Unit Costs of Health and Social Care 2021).

While this likely reflects higher pay in local authorities, the 2024 census also highlighted a difference in the needs profile of the children looked after by council and private sector homes, respectively.

Overall, there had been significant increases in the proportions of homes reporting being able to support children with complex needs, from 66% in 2023 to 80% in 2024, those who had suffered abuse or neglect, from 64% in 2023 to 63% in 2024, and those with mental health problems, from 33% to 40%.

Private homes were more likely than council ones to report being able to support children with complex needs (89% as against 69%) and needs arising from abuse and neglect (76% as against 60%).

However, council homes more commonly reported being able to support children with autism spectrum disorders (65% against 49% of privately run homes), learning difficulties (66% compared with 47%), sensory impairments (32% compared with 17%), complex health needs (28% compared with 13%) and physical disabilities (35% compared with 10%).

Disparities ‘remain a significant concern’

The Association of Directors of Children’s Services said that the disparities between council and private sector homes were a “significant concern”.

The chair of its workforce policy committee, Nicola Curley, said: “Lower pay and fewer specialist services in private homes contributes to higher staff turnover and difficulties in recruiting skilled care staff. Addressing this pay gap is vital to ensuring all children, regardless of where they are placed, receive high-quality, consistent care.”

Overall, she said the census offered “a mixed picture of progress and stubbornly persistent challenges”.

“It is encouraging to see workforce growth, with staff numbers rising to over 46,000 and lower vacancy rates in care homes,” she added. “The fall in use of agency staff is also a welcome development, helping to provide greater stability for children and families. Increased confidence among managers in addressing mental health needs and the continued growth in support for complex needs reflect positive trends in care quality.”

Curley said the remaining challenges had to be met by “sustained investment in workforce development”.

Social care reform and the children’s home sector

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However, there are no specific policies relating to the children’s home workforce in the DfE’s children’s social care reform agenda, despite it including a number of measures related to children’s homes provision:

• Two regions – the South East and Greater Manchester – are testing the regional commissioning and provision of care placements through so-called regional care co-operatives (RCCs), which are designed to improve the planning, sufficiency and quality of placements for looked-after children. The Children’s Wellbeing and Schools Bill would give the government the power to require councils to set up such arrangements.
• A new type of registered placement is due to be created, via the bill, for children who may need to be deprived of their liberty due to their level of risk, but for whom a secure children’s home would not be appropriate.
• The bill would also enable Ofsted to regulate groups of providers, in order to tackle quality issues it has identified across multiple settings.
• The government would be able to oversee the finances of children’s social care providers who would be difficult to replace should they fail, to help prevent disruption to children’s care, under provisions in the bill.
• The bill would also enable the government to cap the profits of non-local authority providers, though it will not implement this unless other measures do not sufficiently reduce “profiteering” in the market.

Professional registration of children’s home workers

One of the DfE’s purposes for the census is exploring the potential for children’s home workers in England to be registered, in a similar way to social workers and residential care counterparts in the rest of the UK.

It is considering the move in response to the Independent Review of Children’s Social Care and the Independent Inquiry into Child Sexual Abuse, both of which recommended the registration of the workforce, starting with managers. Social Work England has been scoping out how this could potentially happen, to inform the DfE’s thinking.

The qualitative research for the census revealed mixed views on the introduction of professional registration.

Some staff felt it would improve the recognition and standing of the sector, potentially making recruitment easier, and could also streamline staff training. However, others raised concerns about the procedural requirements of any registration system, as well as the fees that staff would have to pay.