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06th April 2022

Care providers set to receive fairer costs for providing care

Local authorities in England will be supported by £1.36 billion from the Health and Social Care Levy to pay a fairer rate of care to adult social care providers, the Government has announced.

During year one, local authorities will receive an extra £162 million, followed by £600 million in years two and three.

The Market Sustainability and Fair Cost of Care Fund will increase the support available for the care sector as part of the government’s 10-year vision for reform set out in the People at the Heart of Care white paper.

To ensure the investment makes it from local authorities to care providers the new guidance published today sets out local authorities must:

  • Carry out cost of care exercises to improve understanding of how much it costs to provide care in their specific area, including assessing the various costs care providers face in the area
  • Ensure the care market in the area is sustainable and identify and increase rates where a fairer cost of care is needed
  • Spend no more than 25% of funding in year one towards implementation costs to ensure remaining funding goes towards genuine increases in fee rates

There will not be a set fee rate as the costs of providing care will not be the same across the country due to local market variations.

The guidance also sets out as a condition of receiving future funding, local authorities will need to evidence the work they are doing to prepare their markets by submitting cost of care exercise reports, market sustainability plans and a spend report to the Department of Health and Social Care (DHSC) by 14 October 2022, and provides templates for each of these.

Further Information

Market Sustainability and Fair Cost of Care Fund 2022 to 2023: guidance - GOV.UK (www.gov.uk)

*All information is correct at the time of publishing. Use of this material is subject to your acceptance of our terms and conditions.

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