The Homecare Association says that a lack of engagement from NHS Integrated Care Boards means that homecare providers are operating below cost.
The Homecare Association, Britain’s membership body for homecare providers, has accused some NHS Integrated Care Boards (ICBs) of “unethical commissioning practices”. Without immediate intervention, it believes that the government’s promises to reduce NHS waiting lists will fail because the social care services it depends on will fail.
In a letter to NHS England’s chief executive Amanda Pritchard, Homecare Association chief executive Jane Townson criticised some ICBs for not increasing fees after the National Minimum Wage (NMW) increased by 9.8% in April last year.
Now, she says, providers face a further 10% rise in costs because of an increase in employment tax and a 6.7% increase in the NMW announced in the Autumn Budget.
‘Failure to communicate’
Homecare Association research from August last year showed that 75% of NHS bodies had failed to communicate with providers about fee uplifts by June 2024, three months after the minimum wage increase.
“The approach of the NHS to commissioning homecare is nothing short of scandalous. Some ICBs haven’t spoken to providers about fees since 2023, let alone offered increases to cover mandatory wage rises. They expect homecare providers to operate below cost, putting both care workers and older and disabled people at risk,” says Townson.
The letter comes amid warnings that the UK’s care sector has reached a “tipping point,” with evidence showing only 1% of public bodies are paying sustainable rates for care services. Industry analysis reveals that 80-85% of providers are small and medium enterprises which lack the financial resilience to absorb rising costs without corresponding fee increases.
The Homecare Association calculates that providers need a Minimum Price for Homecare of £32.14 per hour for 2025-26 to ensure sustainability and compliance with regulations.
This comes as recent market analysis shows homecare providers’ average margins have fallen from 10.8% to just 7.6%. Many are operating on margins of 1-2% or at a loss.
