Thought leadership

The State of the Social Care Sector: How did social enterprises respond to Covid-19?

by Kelly Hall, Kelly Hayward and Phil Kinghorn, University of Birmingham

Over the last decade the social care sector in England has seen unprecedented demand coupled with funding cuts and workforce recruitment and retention challenges. The Covid-19 pandemic added more pressure to already stretched social care systems.

Recent research at the University of Birmingham has been exploring the contribution of social enterprises to the adult social care sector. As part of this research, we analysed data from the 2019 and 2021 ‘State of Social Enterprise’ survey focusing only on social enterprises delivering social care services (‘care social enterprises’). We looked at any changes in the sector immediately before and after the pandemic.

Overall, the survey suggests that the care social enterprise sector responded positively to the challenges of Covid-19. Between 2019 and 2021, most care social enterprises not only survived, but we found generally positive indications of growth and reports of diversification and innovation. Whilst the pandemic created challenges for the sector, including financial difficulties – with 32% of care social enterprises reporting that they drew on their financial reserves and 20% having increased borrowing in response to the pandemic – most (68%) did not pass any financial burden on to their service users. Many care social enterprises surveyed reported that their annual income had increased; with almost twice as many organisations reporting an annual income exceeding £1m in 2021 than had done in 2019, although the actual proportion reporting income exceeding £1m was relatively small (just under 20% in 2019), with medium income of £100,000. More care social enterprises also reported making a profit in 2021 (56%) compared to 2019 (44%).

An overwhelming 81% of care social enterprises surveyed reported that they changed their processes and/or ways of thinking in response to the pandemic. As well as adapting in response to Covid-19, care social enterprises were found generally to be dynamic; in 2021, 48% reported that they had expanded into new markets and 62% had developed new products. Many also reported that they had expanded the reach of their services, with over three quarters (78%) operating across more than one local authority area in 2021 (compared with 59% in 2019). Similarly, the number of employees in care social enterprises increased between 2019 and 2021 from a median of five to twelve employees, and more than two-thirds (68%) expected their staff number to growth further. Whilst the number of staff grew, staffing was affected by the pandemic with 42% of care social enterprises reporting furloughing staff, 44% asked staff to take on additional roles, and over half provided or switched to remote working. 

The most common objective of care social enterprises was reported as ‘supporting vulnerable people’ and one notable trend over the last two years has been the prioritisation of adult mental health and wellbeing. Whilst this is reflected in the entire social enterprise sector [1], with nearly a third of the sector prioritising adult mental health and wellbeing as a main objective, a more dramatic shift is visible in care social enterprises with adult mental health listed as a priority objective by 27% in 2019, and more than doubling to 59% in 2021.  This is congruent with increasing demand on NHS mental health services post COVID19 [2] and supports the notion of adaptability and resilience in recent years in the care social enterprise sector.

Care social enterprises therefore appear to have responded well to the COVID-19 pandemic. They are widely recognised as driving innovation and as having real expertise around their communities. These qualities may make them well placed to fill some of the gaps in statutory care and support, and in turn gain recognition as integral stakeholders in health and care systems [3]. In recent years care social enterprises have therefore proven their ability to adapt and innovate in response to changing demands and challenges.  Furthermore, they have continued to grow and remain profitable in the face of crisis.  

[1] SEUK (2021) No going back- state of social enterprise survey 2021,

[2] NHS Confederation (2021) Increase in demand for mental health support is being felt across the system, 25 October 2021,

[3] ADASS (2020) The voluntary and community sector in a world shaped by Covid