16 Nov 2023

Media release: Homecare Deficit Report 2023

Our Homecare Deficit Report 2023 provides detailed evidence of continued and serious systemic under-funding of homecare in the UK.

Prolonged lack of government funding has increased the occurrence and risks of poor workforce experience; higher staff turnover; increased unmet need; poor quality care; and reduced sustainability of services.

We received data from all 276 public bodies in the UK that buy homecare from independent providers.

Our analysis shows the fee rates they are paying are, on average, 25 to 35 percent below the amount needed to pay careworkers fairly (£12.45 per hour, equivalent to NHS Band 3 workers with 2+ years’ experience), and ensure high-quality, sustainable care services. The average for the UK overall is £21.56 per hour, with Northern Ireland the lowest at £18.63 per hour.

Only 5% of UK public organisations paid the minimum price for homecare calculated by the Homecare Association. This minimum is based on a careworker receiving the National Living Wage of £10.42 per hour in England, and the real Living Wage in the devolved administrations. None of the Local Health Boards in Wales, councils in Scotland, or HSC Trusts in Northern Ireland met the Homecare Association’s minimum price.

18 public bodies buy homecare at rates below the amount needed to cover direct careworker costs at the legal minimum wage in each devolved administration, plus statutory employment on-costs.

If that were not bad enough, this also allows nothing to cover the other costs of care delivery. These include wages for a registered manager and office staff; supervision; training; quality governance; recruitment; PPE and consumables; digital solutions; telephony; insurance; regulatory fees; general business and office costs; and a surplus for investment.

It should be unlawful for public bodies to purchase care at fee rates which do not enable compliance with employment and care regulations. This leads to high staff turnover, poor quality care, and unsustainable services.

Many councils are worsening the impact of low fee rates by adding more providers to their frameworks and spreading the hours across all of them.

On average, public bodies have increased their homecare hours by only 8 percent compared to last year, but there is some variation. Because of the fragmentation of hours, many providers are reporting a reduction of 25 to 35 percent in hours available to them.

The cost per hour of homecare delivery is highly sensitive to the volume of hours delivered. Losing 25 percent or more hours creates substantial risk to the viability of many homecare providers. It also risks non-compliance with the licence conditions for sponsorship of international recruits. This leads to hardship for sponsored workers and increases risks of modern slavery.

Skills for Care data show that England homecare workforce numbers declined sharply after 2020/21. International recruitment is the main reason for the 2 percent recovery in the independent sector homecare workforce in 2022/23. The UK’s reliance on sponsored workers to meet needs makes it even more important that providers ensure ethical employment. This requires ethical commissioning.

Challenges with recruitment and retention of careworkers increase risk of unmet need.

Data on care packages handed back in 2022-23 show an average of 81 per council or HSC Trust; the average in Northern Ireland was 130. Quality and availability of data on this metric were highly questionable. Fewer than half of the public bodies responded appropriately to this question. The true number of hand-backs could be significantly higher.

There needs to be much higher investment in social care. The goal is to improve employment conditions and ensure high standards of accessibility, quality, and safety.

We support the Health Foundation’s conclusion that we need between £8 billion and £18 billion extra per year for social care.

In 25 years’ time, 1 in 4 of us will be 65 and over. Ageing is unavoidable.

We call on the government to recognise and plan for this profound demographic shift.

Investing now in enabling us all to live well at home and flourish in our communities will support our health and wealth as a nation in the future.

CEO of the Homecare Association, Dr Jane Townson OBE, said:

“Homecare plays a vital role in enabling us all to live well at home and flourish in our communities. Investing in homecare helps to enhance wellbeing; increase healthy life expectancy; reduce pressure on the NHS; and save money for the health and care system. 

High-performing providers know that delivering consistently high-quality, financially sustainable care services requires investment.

Investment in people, processes and organisation.

It requires strategic intent, time and money.

Right now, the policy landscape is incoherent.

UK government documents such as the White Paper “People at the Heart of Care” and “Next Steps to Put People at the Heart of Care”, emphasise the need for outstanding quality care that is personalised to meet individual needs and gives people choice and control.

The government also says it aims to build a workforce of the right size with the right skills to meet the growing need for care and support.

Everyone supports these aspirations.

Meanwhile, successive governments have starved councils and the care sector of the funding vital to achieve these aspirations.

The Local Government Association warns of a £3 billion financial deficit across all council services over 2 years. If unfunded, councils risk not meeting their statutory duties.

Thirteen councils have issued section 114 notices since the Local Government Finance Act 1988 became law. The Special Interest Group of Municipal Authorities warns that 26 more local authorities could issue a Section 114 notice in the next two financial years. A section 114 notice is a report that shows the council doesn't have enough money to cover expenses for the next year; this would be unlawful under the Local Government Finance Act 1988.

Though the Government allocated a Market Sustainability and Improvement Fund in 2022 aimed at moving towards a fair price for care, this has barely scratched the surface. Most of the £562 million announced in 2022 and £570 million in 2023 is being used to absorb inflationary pressures. And National Living Wage, Real Living Wage and the London Living Wage will rise again by 7-10 percent in 2024.

So, we have cash-strapped councils and NHS bodies driving down fee rates; driving down wages; driving down quality; fragmenting the hours and the workforce; not paying their bills on time; destabilising local markets; encouraging approaches which risk non-compliance with care, employment, tax, and benefit regulations; and, sometimes, potentially breaching human rights.

Quality care, a strong workforce, and sustainable services cannot be delivered on the cheap.

We urge the government to invest an additional £2.08 billion per year in homecare right away to address the Homecare Deficit we have identified. This figure is for existing hours purchased. Much more is required to address unmet need.

We want to see the government walking the talk and ensuring a positive future for us all.”