The report, based on Freedom of Information requests to 276 public bodies, with 275 responses received, presents the clearest evidence yet that chronic underfunding has reached a tipping point. It finds that 29 percent of councils and Health and Social Care Trusts now pay hourly rates that do not even cover the direct employment costs of careworkers at minimum wage.
“The figures show a system that no longer works for the people who need support, for careworkers, for councils or for the NHS,” said Dr Jane Townson OBE, Chief Executive of the Homecare Association. “Homecare enables people to live well at home and reduces hospital pressures, yet it is commissioned at prices that make safe delivery difficult. The result is a workforce leaving for retail and hospitality, and older and disabled people waiting longer for essential support.”
Key Findings
- The UK faces a £3.25 billion annual shortfall to pay careworkers fairly and keep providers sustainable:
- England: £2.64 billion
- Scotland: £320 million
- Wales: £135 million
- Northern Ireland: £155 million
- Only one public organisation in the UK pays at or above the Homecare Association’s Minimum Price for Homecare.
- The NHS pays less per hour for homecare than local authorities, even for people with complex health needs that require highly trained careworkers. This mismatch defies standard funding logic.
- NHS bodies have reduced the hours of homecare they purchase since 2024, shifting costs from the NHS to councils and individuals. This undermines the principle that NHS care should be free at the point of delivery.
- 61 percent of councils and Health and Social Care Trusts purchase too few hours per provider to sustain employment rights, efficient operation, and financial viability, while only one percent use block contracts that guarantee income stability.
- The proportion of councils and HSC Trusts paying below cost has nearly quadrupled since 2023, highlighting a national social care emergency.
- Labour run councils are over-represented among those paying below cost, reflecting historic policy choices and greater fiscal pressures in deprived areas.
The Homecare Association urges immediate government action on three fronts:
Funding and Financial Sustainability
- Stabilise homecare budgets by ring-fencing social care funding and investing at least £3.25 billion across the UK.
- Require councils and NHS bodies to confirm fee rates annually to enable proper workforce planning.
- Ensure pay parity with NHS Band 3 roles and cover statutory sick pay and delegated healthcare tasks.
Legislative and Regulatory Reform
- Introduce a National Contract for Care with cost-reflective rates.
- Develop a statutory workforce plan to meet the needs of an ageing population and reduce turnover.
- Issue guidance to prevent commissioning of unregulated or unsafe care.
Commissioning and Integration
- Replace fragmented, minute by minute purchasing with geographic, capacity based contracts that guarantee hours and compliance.
- Integrate homecare into neighbourhood health services to reduce hospital pressures.
- Review Ethical Care Charter commitments to align with fair pay and legal compliance.
“Underfunding social care costs taxpayers far more through hospital delays and workforce loss,” Dr Townson added. “A fair price for care is not optional. It is the foundation of a sustainable health and care system. Proper investment keeps people independent, relieves hospital pressure, and strengthens local economies.”
