Homecare Association responds to the government's plan to reduce NHS waiting lists

The Homecare Association today responds to Prime Minister Starmer's announcement of plans to address NHS waiting lists, highlighting concerns about the disconnect between his new year's resolution and reality on the ground.

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

"While we welcome the Prime Minister's recognition that care needs to move out of hospitals and into communities, his government's funding allocations tell a different story.

"The stark reality is that while the NHS budget is set to exceed £214 billion, community-based homecare receives just £5.3 billion - less than 2.5% of the NHS budget.

"The government is currently spending at least £1.8 billion annually just on keeping people in hospital beds who could be at home with proper support. This same funding, if directed to social care, could prevent thousands of hospital admissions and enable many more people to return home safely after treatment."

"If the Prime Minister does not want the NHS to die, then his government needs to  properly funding home-based support and care. You cannot reduce NHS waiting lists and deliver a 'Home First' strategy without it. We need a fundamental shift in resource allocation toward preventative and community-based care, which includes social care"

"The Labour government's prescription will not fix the problem until it includes social care. As it stands, it's administered a lethal cocktail of Autumn Budget measures which increase costs for providers by 10% without funding these. Delaying the care sector's treatment until the next parliament will not make the health service fit for the future.

"The electorate has made clear their expectations for better health and care services. Meeting these expectations requires more than just increasing hospital funding - it demands strategic investment in the full spectrum of care services, particularly those that keep people healthy and independent in their own homes."

The Homecare Association calls on the government to:

1. Provide emergency funding of at least £1.8 billion to address the cost pressures in homecare
2. Implement a National Contract for Care services that sets sustainable minimum prices for homecare
3. Ensure integration plans include proper representation of homecare providers in NHS neighbourhood teams
4. Fund the full cost implications of any new responsibilities for care workers relating to health checks

[ENDS]

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Notes to editors

1. The Homecare Association is the UK's only membership body exclusively for homecare providers. It is one of the largest care associations, with over 2,200 members nationally. Its mission is to ensure homecare receives the investment it deserves, so all of us can live well at home and flourish in our communities. The Homecare Association acts as a trusted voice, taking a lead in shaping homecare, in collaboration with partners across the care sector. It also provides hands-on support and practical tools for its members. The Homecare Association's members agree to abide by the Association's Code of Practice.
2. The care sector comprises 18,500 PAYE employers, 10,850 of those are non-residential and 7,650 are residential (Skills for Care 2024). Total market value is £35.3 billion (LaingBuisson 2024), contributing £68.1 billion to the economy.
3. Local authorities and the NHS buy 70-80% of all care services (LaingBuisson 2024).

• 96% of supported living
• 89% of care homes for younger adults
• 79% of homecare
• 57% of older people's care homes

4. NHS funding represents 25% (£1,692 million) of the total funding for homecare (£6,656 million). The rest comes from councils (50%; £3,348 million); direct payments (3%; £212 million); private-pay (21%; £1,375 million); and other (1%; £30 million) (LaingBuisson 2024).
5. The fee rates local authorities and the NHS pay now are too low to cover costs (Homecare Association). Only 1% meet our Minimum Price for Homecare of £28.53 per hour in 2024-25. This will rise to £32.14 per hour in 2025-2026, as detailed in our new Minimum Price for Homecare report.
6. Employment costs, representing 70-80% of providers' total costs, will surge by at least 10% in 2025-26. This is driven by increases in employers' national insurance contributions and minimum wage requirements. We provide detailed analysis in our Minimum Price for Homecare 2025-26 report.
7. Providers cannot pass on these increased costs as local authorities and NHS bodies, their primary customers, fix prices. Many councils cannot balance their books and directors of Adult Social Services must cut budgets by £1.4 billion.
8. Key findings from a recent Care Provider Alliance survey show that without immediate government intervention:  

• 73% will have to refuse new care packages from local authorities or the NHS.
• 57% will hand back existing contracts to local authorities or the NHS.
• 77% will have to draw on reserves.
• 64% will have to make staff redundant.
• 92% of providers who also serve people who pay for their own care will be forced to increase rates for self-funders. Many self-funders will be unable to bear extra costs and may reduce care or rely more on family carers.
• 22% are planning to close their businesses entirely.

9. Profitability in the state-funded sector has plummeted over the past decade (LaingBuisson 2024).

• Homecare average EBITDA margins have fallen from 10.8% to a low of 5.2% in 2019, with some recovery to 7.6% in 2024
• Care homes for younger adults have seen EBITDA margins halve from 26% to 13%
• Older people's care homes serving mainly state-funded residents have seen margins fall by 50%

10. Despite some perceptions, private equity involvement in the care sector is limited. Just 12.2% of older people's care homes; 10.1% of younger adult care homes; and 12.2% of homecare/supported living services are private equity backed.