Increasing care provision would allow more family carers to work and boost the economy, a report by Cass Business School has found.
The UK care economy: improving outcomes for carers, commissioned by the charity Carers UK, said 'a fundamental shift' in the adult care system would add significant value to gross domestic product at the same time as better supporting families.
The government should understand 'the economic costs of failures in care' as it considered how to reform the current system, report author Leslie Mayhew.
Ministers have confirmed the government is in favour of introducing the cap on individual care cost contributions recommended by the Dilnot review on social care funding. However, a final decision on the proposal, which could cost the government £1.7bn a year, is not expected to be taken until the next Comprehensive Spending Review period, set to start in 2015.
Mayhew, who is professor of statistics at the business school's Faculty of Actuarial Science and Insurance, said reform could act as 'an engine for economic growth'. More than 3 million of the UK's 6.4 million family carers attempt to juggle the demands of their disabled or elderly relatives with maintaining a job.
According to the report, if each of these people were able to work full-time, with external care being provided for their relatives, the average annual contribution to GDP would be £47,800. This comprises the incomes of both the carer and the paid care worker.
Reforms were also needed as more families are having to provide care to different generations simultaneously, the so-called 'pivot generation', the report added. This could hit growth as care demands grow.
There was a need to be 'much smarter about how care is organised and delivered', Mayhew said. He added: 'The system is fragmented and too complex. We need greater integration, better financial incentives, more flexibility, and a focus on prevention.'
Carers UK commissioned the report to examine the challenges families are facing and give an independent view on how to improve the lives of family carers.
Chief executive Helena Herklots said: 'Too often the debate around reform of care for older and disabled people is framed as a drain on public finances. It is time we recognised that helping families to juggle work and care and stimulating a new generation of care services can act as an engine for economic growth.'