Fair Pay for Residential Child Care Workers – Fair Pay Agreements
An essential element in resolving Residential Child Care recruitment challenges is using Fair Pay agreements.
Where there is “no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst”. (Winston Churchill, Hansard 1909, when President of the Board of Trade)
NCERCC has written on this subject before.
Fair Pay, Terms and Conditions for Residential Child Care workers can be enacted now.
Explaining the Theory and Practice for Fair Pay in Residential Child Care
The subject is returned to highlighted by Regional Care Cooperatives needing to establish this as a part of their operation. It is also highlighted by a new publication by the IPPR March 2025 Mission-driven industrial relations: The case for fair pay agreements | IPPR from which much of this article is derived.
Fair Pay agreements could support the government’s mission-based approach by resolving the challenges of recruiting for Residential Child Care.
Fair Pay agreements and ‘negotiating bodies’ are actively being considered for to adult social care and school support staff, sectors which will be instrumental in delivering on Government’s health and opportunity missions. These Fair Pay agreements would determine training standards, pay, and terms and conditions for businesses and workers. The existence of Pair Pay agreement could act as leverage in these sectors.
As with adult social care in Residential Child Care the state has a systemic influence on the labour market as the primary purchaser of services: this provides the government with additional leverage to shape workforce conditions and to create new sectoral collective bargaining structures
Fair Pay agreements are established through collective bargaining, where representatives of employers and workers negotiate an agreement which determines training, pay and working conditions for all employees in a sector of the economy, not with individual employers.
The government plans to create a new Adult Social Care Negotiating Body (ASCNB) “… empowering worker, employer and other sector representatives to negotiate pay and terms and conditions, sectoral agreements will help to address the recruitment and retention crisis in the sector, in turn supporting the continued delivery of high-quality care” (DBT 2024a).
This is true for Residential Child Care too.
The primary challenge, as the government sees it, is that adult social care providers struggle to recruit domestic workers because of low pay, poor terms and conditions, limited career progression and poor access to learning and development. The government characterises the sector as exhibiting evidence of ‘market failure’: pay has not risen in response to excess demand, due to the monopsonic power of local authorities within care markets and the binding constraint of local authority funding.
This is true for Residential Child Care too.
The government states that “by empowering worker, employer and other sector representatives to negotiate pay and terms and conditions, sectoral agreements will help to address the recruitment and retention crisis in the [adult social care] sector, in turn supporting the continued delivery of high-quality care” (DBT 2024a)
Establishing Fair Pay collective agreements and bargaining is not radical. It is pragmatic.
They already exist across Europe for social care. It is not new to the UK either, already around 20 per cent of workers in the UK are currently covered by sector-wide pay structures, some negotiated through sectoral collective bargaining.
Residential Child Care has many parallels with the adult social care sector; given that the government is already using fair pay agreements as a policy tool to resolve workforce challenges in the adult social care sector, it would be sensible to apply the same logic to Residential Child Care.
The major step forwards would be for Regional Care Cooperatives to have Fair Pay agreements and collective bargaining established as an integral and essential aspect of their work. This needs to be achieved through the Children’s Wellbeing Bill currently in Parliament.
A key aim of the Negotiating Body should be to address providers’ difficulty retaining staff and the workforce’s experience of low pay and poor working conditions.
To improve retention, the body should be tasked with creating a hierarchy of roles which are linked to training qualifications and clear pay bands. This structure would recognise the need for and value of qualifications while providing a clear path that encourages the workforce to train and progress. To improve pay and working conditions the Negotiating Body should complement progress towards better funding with a workforce strategy and stronger skills development for the sector. The Negotiating Body could also collect data on the sector which would strengthen the Department for Education’s ability to address workforce challenges
Government should take the following steps:
- Establish the new Negotiating Bodies in law. Legislation should define the Negotiating Body’s remit and the organisations which will be involved in negotiations.
- Secure the buy-in of businesses and unions to ensure that Negotiating Bodies endure over the long term. This means ensuring that the process of bargaining and the outcomes of fair pay agreements respond to the needs of both employers and the workforce. The most durable sectoral collective bargaining structures persist because they benefit both sides of the negotiation process.
- Train and adequately resource anyone involved in negotiating fair pay agreements. For new Negotiating Bodies to be successful, they will require the involvement of well-trained and resourced negotiators. This should include training and preparing representatives of employers and workers to negotiate with one another, as well as supporting relevant officials to facilitate the bargaining process.
Well-functioning collective bargaining institutions, particularly when associated with high coverage, can also allow for more differentiation in terms of wages and working conditions than statutory rules, can foster skills development and skills use in the workplace, and allow for the effective dissemination of good working practices.
International analysis shows that the best economic outcomes in terms of employment, productivity and wages are reached when sectoral collective bargaining plays a strong role but where sectoral agreements leave flexibility for firm-level agreements, as seen in Germany and Scandinavian countries.
When RCC was predominantly provided by LAs pay was determined by a National Joint Council (now National Joint Council for Local Government Services (LGA 2025a). Currently LA RCC employees are included in sectoral LA agreements using Pay Review Bodies: independent, advisory, non-departmental public bodies which provide evidence-based advice and recommendations on pay for public sector workers.
In keeping with much else now RCC is predominantly privately owned, multi-employer bargaining has all but disappeared. Across the sector there is observable disparity in pay, terms and conditions. Remedying disparity needs to be the focus.
Facing and overcoming the challenge
The success of fair pay agreements in market driven labour markets will depend on whether businesses and workers think that sector-level negotiation is in their shared interest.
For profit RCC providers may demur to recognise the contributions to the profits made by their workforce
To establish sectoral collective bargaining in predominantly market-driven labour markets, the government would need to introduce a clear legal framework for creating Negotiating Bodies and producing fair pay agreements.
There are examples
Wales
The Welsh government is expanding the role of sector-wide engagement and negotiation in both the public and private sector. The Social Partnership and Public Procurement (Wales) Act passed by the Senedd in 2023 aims to improve public services through “social partnership working, promoting fair work and socially responsible public procurement”. The bill establishes a statutory Social Partnership Council, creates a statutory duty on Welsh ministers to consult the Council on the delivery of wellbeing objectives, and places a statutory duty on certain public bodies to “seek consensus or compromise” with recognised trade unions (Welsh Parliament 2022).
The Welsh government has also adopted a social partnership approach to promote fairer working practices in the private sector through Fair Work Forums in social care and retail. The Social Care Fair Work Forum allows representatives of trade unions, employers, stakeholders and the Welsh Government to work together to influence national priorities and policy regarding fair work in the social care sector in Wales (Welsh Government 2025b).
The Welsh Government’s Fair Work Commission concluded that tripartite arrangements have a key role to play in building capacity for, and gaining wider acceptance of, sectoral collective bargaining (Welsh Government 2024)
Scotland
The Working Together review, concluded that ‘social partnership’ could address sector-wide challenges in workforce pay, working conditions and skills development. The review also emphasised that establishing sector-wide minimum terms and conditions would marginalise firms seeking an advantage through ‘undercutting’ competition, either by paying lower wages and offering poorer terms and conditions or by poaching skilled workers from those who invest in workforce training, and would instead encourage businesses to compete on innovation and quality (Mather 2014).
Ireland
There is an established framework for sectoral collective bargaining in Ireland: the Joint Labour Committee (JLC) system. A JLC is an independent body which sets the employment conditions and minimum rates of pay for employees in a certain sector. JLCs, which comprise an equal number of representatives of employers and workers, negotiate an Employment Regulation Order (ERO) to set out the employment conditions and minimum rates of pay for the sector they represent. Once an ERO has been reviewed by the Labour Court and signed by the Minister, it is given statutory effect and becomes legally enforceable (Citizens Information 2023). Employers in those sectors are then obliged to pay wage rates and provide conditions of employment not less favourable than those prescribed (Labour Court 2025). For more information see Joint Labour Committees
Sectoral collective bargaining in market-driven labour markets relies primarily on introducing a legal framework to facilitate the organic growth of sectoral collective bargaining structures. This could be modelled on Ireland’s Joint Labour Committees, finding a framework which satisfies both businesses and workers.
