New report finds adult social care contributes £3.4b to Scottish economy

The adult social care sector contributes £3.4 billion to the Scottish economy, a new report into the economic impact of the sector has found.

The Scottish Social Services Council (SSSC) published the report today, at the same time as the UK, England, Northern Ireland and Wales published similar reports.

In Scotland nearly 148,000 people work in adult social care with more than 5000 regulated services and direct employers, which makes it the eighth biggest employment sector in terms of number of jobs and 6% of the total workforce.

The private sector is the biggest employer in regulated services employing 59,400 people, with 43,400 in voluntary and 35,100 in public sector services. 

The direct economic impact in terms of Gross Value Added (GVA), the measure of the value of goods and services produced in a sector of the economy, is £2.2 billion which is higher than the Agriculture, forestry and fishing, Arts, entertainment and recreation and Water supply, sewerage and waste management sectors.

As well as the direct impact of adult social care the report also highlights the indirect and induced impact of the sector, which increases the estimated GVA to £3.4 billion and 198,600 jobs.

The indirect effect of the sector (resulting from the purchase of intermediate goods and services by the adult social care sector in delivering its services) contributes a further 29,400 jobs and £501 million GVA to the Scottish economy.

The induced effect of the sector (resulting from purchases made by those directly and indirectly employed in the adult social care sector) contributes a further 21,400 jobs and £636 million GVA to the Scottish economy.

Some differences between Scotland and the other nations were the:

• level of productivity in the workforce is higher than all the other nations
• estimated GVA per capita and GVA per person aged 65 or over is highest in Scotland
• average earnings of £18,400 in Scotland is higher than elsewhere
• number of full time equivalent jobs in adult social care per head of population is higher in Scotland than the other nations.

Speaking about the reports Scottish Government Health Secretary Shona Robison said: “The people working in adult social care make a critical contribution to people’s health and wellbeing.

“And as these reports show, the sector also makes a major contribution to the Scottish economy and to employment. These findings also highlight the positive impacts of the introduction of the real Living Wage in Scotland.

“We remain committed to transforming the way we deliver social care services and investing in the sector, as reflected in the additional £66 million we will put into social care during 2018/19.”

Welcoming the report SSSC Interim Chief Executive Lorraine Gray said: “This report shows that adult social care not only looks after some of the most vulnerable people in society but also makes a significant contribution to the Scottish economy.

“Many people might be surprised to learn that with 148,000 people working in adult social care it is comparable in size to the entire NHS in Scotland, which reinforces the importance of the social service sector as a whole.

“When you take into account the indirect and induced impact of the adult social care sector it’s clear we need it to be strong and sustainable and continue making a big contribution to the economy.”

SSSC Convener Jim McGoldrick added: “It is good to see adult social care workers in Scotland benefitting from the Scottish Living Wage, which pushes average earnings above those elsewhere in the UK.

“Everyone working in adult social care is contributing to Scotland having a trusted, skilled and confident social service workforce and I’m pleased this report recognises the economic contribution they make to the country too.”

The UK report found there are almost 1.8 million people working in adult social care in the UK and GVA of the direct impact is £24.2 billion. Including the indirect and induced impact the overall UK GVA is £46.2 billion and more than 2.6 million jobs.