The true cost of CARE

During 2021/22, local authorities in England were underfunding older people’s residential and nursing care homes by over £2 billion. A review by Care England revealed the concerning gap, following analysis of the average fees currently paid by local authorities and the latest reported Fair Cost of Care rates which were published at the beginning of February 2023.

“The evidence is clear. The care sector is being significantly underfunded by local authorities and requires significant investment by central government,” highlights Martin Green, chief executive of Care England. “The continued funding shortage needs to be tackled head-on.”

Fair

The Fair Cost of Care was a government-led exercise, created to achieve a shared understanding of the local cost of providing care. The practice was first introduced during autumn 2021 during the same time period that plans for social care reform and a cap on lifetime care costs were revealed.

The policy was created to address councils paying care providers fees that didn’t adequately cover costs, often caused by shrinking budgets and a rise in the people who require care that are eligible for public funding. In total, the government made £1.36 billion available to support councils in implementing and operating this policy up until 2024/25, but the latest figures show that little progress has been made.

Analysis

Across England, just over 178,000 people receive funding for residential care fees or nursing care fees. For these residents, the average difference between what a local authority pays for and the Fair Cost of Care was £218 per week, with this figure increasing to £231 per week for nursing care.

In order to fill this gap and meet the standard, some local authorities would need to increase what they pay by as much as 32 per cent.

Impact

Without proper funding from councils, either residents have to find a way to fill the funding gap for their care, or the quality of care will diminish due to the impact this has on service providers.

“Our analysis indicates that the £7.5bn will not scratch the surface,” reveals Martin. “Care staff pay is directly impacted by fees paid for care by local authorities and those who self-fund and, as such, providers who rely more heavily on local authority funded residents are more restricted in their ability to increase rates of pay without being financially constrained, which has a direct correlation to the recruitment and retention issues experienced by the sector.”

Alongside the initial Fair Cost of Care funding, the government has dedicated £7.5 billion towards social care over the next two years, but this is supposed to be focussed on creating an additional 200,000 care packages and supporting the early discharge of people from hospital to ease the NHS backlog.

“The core purpose of the Fair Cost of Care exercise, an initiative led by the Government, was aimed at increasing the care fees paid by Local Authorities to ensure the care sector’s sustainability. This reality must now be realised,” concludes Martin.

For More Information

Learn more about the Fair Cost of Care and how to check if you are being charged correctly from Care England (www.careengland.org.uk).