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Think Laterally to Halt Care Sector Exploitation

Dame Sara Thornton, Consultant on Modern Slavery at CCLA IM and former Independent Anti-Slavery Commissioner, says investors can help to protect workers.

Over the last year there has been growing evidence of exploitation in the UK care sector. Unscrupulous opportunists here and overseas have exploited the desire of workers to obtain social care visas and have either abandoned them in the UK or subjected them to awful working conditions. What is happening and why? And can investors use their influence to end this exploitation?

The Migration Advisory Committee estimated that 2% of the working population are in social care and that this is likely to rise to 4% by 2033. However, the work is poorly paid and recruitment is a struggle. In 2021/22 there were 165,000 job vacancies.

In response to this shortage the government added a range of social care roles to the Health and Care Worker Visa and added it to the shortage occupation list in February 2022. This has resulted in significant numbers of visas being issued. In the first 18 months, 123,000 care worker visas were granted with an additional 145,000 members of their families coming too.

This change had been recommended by the Migration Advisory Committee but they had also warned that, “An immigration policy may be able to alleviate some of the workforce problems that the sector is facing, but it is not the best solution to the problems. The real solution lies well beyond our remit, in the design and funding of the system itself.”

Exploitation and abuse

Despite this opening up of the labour market to foreign workers in March 2023 there were still 150,000 vacancies. But worryingly the changes have led to both exploitation of workers and abuse of the system.

The charity Unseen operates a help line for modern slavery and it has reported an increase in potential victims of modern slavery in social care from 63 in 2021 to 712 in 2022. A worrying feature of these cases is the debts that workers have incurred to access visas and employment – an average of £11,800. The Gangmasters and Labour abuse Authority has disclosed that it was the most reported sector for labour abuse in 2023 – above agriculture and car washes.

There has also been abuse of the system by middlemen facilitating the visa process and charging vulnerable workers thousands of pounds. On arrival in the UK, workers have found that there is no job and they are left in a state of destitution. According to media reports, the Independent Chief Inspector of Borders had found that 275 visas had been issued for one care home that did not exist and 1,234 to a company which declared that it had four staff when given a licence to operate.

The Home Secretary has taken steps to address both the high numbers of visas issued and the abuse of the system. No dependants will be allowed from March 2024 and only Care Quality Commission-regulated care homes will be able to sponsor migrant workers. However, that will not remove the risk of exploitation. Indeed, the ban on dependants accompanying those on five-year visas to contribute to the UK economy seems very harsh.

Investor influence

So what can investors who care about the way workers are treated do about this? It would be easy to be very pessimistic. Investors will usually focus their stewardship efforts on listed companies but there are no listed care companies in the UK. The market is extremely fragmented with many small businesses providing residential care, domiciliary care and specialist care.

Investors need to think laterally about their influence. Some care providers are funded through private equity – have investors in turn funded that private equity? Some care homes are owned by real estate investment trusts – these may well make up part of an alternatives portfolio. And do investors hold equity in labour agencies which provide staff?

Many international investors have also supported the UNI Global Union’s statement to raise overall standards in the care sector – staffing levels, health and safety, wages, freedom of association and quality of care.

There is unacceptable abuse in the care sector and the investment community cannot ignore it.

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