FOR IMMEDIATE RELEASE
The Homecare Association recognises the rationale behind consolidating NHS England and the Department of Health and Social Care to reduce duplication and improve efficiency.
We are, however, deeply concerned about the accompanying directive for Integrated Care Boards (ICBs) to cut their running costs by 50% by December. This follows previous mandates requiring ICBs to reduce costs by 30% over the past two years.
Dr Jane Townson OBE, CEO of the Homecare Association, said:
"ICBs are already struggling with significant challenges, with over 1,250 staff having resigned since last July. Many in the sector already feel ICBs are too large and remote, making meaningful engagement with local authorities and care providers difficult. It's hard to see how these substantial cuts will do anything but exacerbate these issues."
"Our members already face what can only be described as state-sponsored labour exploitation through unethical NHS commissioning practices. Many commissioners currently purchase homecare at rates that do not even cover the minimum wage plus statutory employment costs for care workers, let alone allow for travel time, mileage, training, or sustainable service operation. Over 89% of homecare providers report late payment of invoices by the NHS. We worry this situation will worsen."
The Homecare Association calls on the Secretary of State for Health and Social care to clarify urgently how ethical commissioning of social care will be safeguarded during this period of radical restructuring.
Homecare providers cannot pay fair wages if they do not receive a fair price for care.
--ENDS--
Contacts
Media team
Email: [email protected]
Mobile: 07435 910 654
Notes to editors
1. The Homecare Association is the UK’s membership body for homecare providers, 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.
