The Homecare Association has claimed that state-funded home care fee rates are “dangerously low” after conducting research into the matter.

The organisation said fees are failing to keep pace with rising wages and costs, risking the stability of the sector.

Failure to ensure adequate funding for home care risks a decline in care quality, increased staff turnover and reduced capacity to meet growing demand. The report highlights a stark disconnect between the rising costs of providing care and the fees paid by local authorities, potentially leading to a crisis in home care provision.

The Homecare Association conducted an extensive analysis of fee rates paid for homecare by public organisations across the United Kingdom for the 2024-25 financial year. The study examined data from local authorities, Health and Social Care (HSC) Trusts, and NHS bodies.

Key findings include:

• The average fee rate for regular home care contracts with local authorities/HSC trusts in 2024-25 was £23.26 per hour, far below the Homecare Association’s ‘Minimum Price for Homecare’ in all UK nations;
• Only 1% of contracts with local authorities/HSC trusts met the Minimum Price for Homecare in their respective nation;
• 6% of regular home care contracts paid rates that didn’t even cover careworker direct costs;
• Just 7% of contracts had a fee increase that kept up with the 9.8% rise in the National Living Wage;
• An estimated additional £1.67 billion is needed in England alone to enable careworkers to receive wages equivalent to NHS Band 3 healthcare assistants (with two-plus years’ experience).

Jane Townson, CEO of the Homecare Association, commented: “Our findings paint a deeply concerning picture of home care funding. It’s shocking that 99% of contracts fail to meet even the minimum price required for sustainable, quality care.

“Without urgent government action to increase funding and mandate fair fee rates, we risk destabilising the homecare sector, compromising care quality, and exacerbating the already critical workforce shortage.

“Local authorities must improve how they commission and purchase homecare. They can’t do it alone. The government must provide adequate funding to councils so they can pay a fair price for care.

“Providers need appropriate fee rates to offer competitive pay and good working conditions for our dedicated workforce.

“The government must recognise that funding, commissioning, regulating, and providing homecare are interdependent. Focusing on one aspect without addressing the others risks creating more problems. We cannot fix the NHS without also fixing social care.”

The Homecare Association is calling on the government to:

1. Provide adequate and ring-fenced funding to local authorities to enable them to pay a fair price for care;
2. Mandate public bodies to pay minimum fee rates for home care to enable employers to offer fair pay and working conditions;
3. Shift commissioning approaches away from time and task at low fee rates to focus on outcomes;
4. Improve demand and supply management of home care at the local level;
5. Ensure state commissioners, particularly in the NHS, detail fee rates for the next financial year by the end of February at the latest.