Margins enjoyed by social care agencies have more than halved in the past five to six years as a result the spread of vendor managed services arrangements, according to one of the authors of a recent report.

Professor Kim Hoque, who contributed to research led by Leeds University Business School’s Centre for Employment Relations Innovation and Change (CERIC) into the use of agency workers in the health and social care sectors, told Recruiter that five or six years ago, agencies were making between £6-£10 an hour for qualified social workers, and margins were around 35%.

However, since the widespread introduction of vendor managed services margins had fallen to around 16%.

“From the cost point of view, VMS has been brilliant in driving mark ups down, “ he says. 

Peter Cullimore, managing director of  Universal Care, and chair of the REC (Recruitment and Employment Confederation) nursing and social care sector group, told Recruiter he accepts VMS have driven down margins. However, he adds, “I think in a lot of cases even where VMS doesn’t exist margins have been hit hard anyway. ”