Home care leaders reveal ‘minimum price’ councils should pay for care

United Kingdom Homecare Association says £15.19 will cover minimum wage for staff but many councils are paying below this rate

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Photo: Francis Dean/Rex Features

Home care leaders today revealed what they saw as the minimum price councils should be paying for their services, amid concerns that many commissioners are driving fees down below the costs providers face.

How the UKHCA calculated its minimum rate for home care

£6.31 in pay

£1.20 to pay staff for travel time

71p in national insurance contributions (9.5% of gross pay)

81p in holiday pay (10.5% of gross pay)

13p for training

8p in pension contributions

£1.40 in mileage

£4.10 for running the provider’s business (27% of the total price)

46p in profit (3% of total price)

Source: A minimum price for Homecare, UKHCA, 2014

The United Kingdom Homecare Association calculated that providers should be paid a minimum £15.19 per hour of home care they deliver in order to provide all staff with the minimum wage, but no more.

Though the UKHCA stressed this was a minimum, it is broadly equivalent to the average fee paid to external providers by councils in 2012-13, £14.90, as recorded by the Health and Social Care Information Centre.

Separately, a BBC investigation has found that just 4 out of 101 councils paid at least £15.19 as a minimum rate to external providers, with an average minimum rate of £12.26.

In its paper, the UKHCA warned that councils were using their dominance of the home care purchasing market to drive down fees to providers, and thereby manage cuts to their own funding from government.

The UKHCA’s calculations are based on the assumption that councils pay providers for contact time only, not workers’ travel time. As travel time must be taken into account in a worker’s hourly pay to comply with minimum wage regulations, this has been added as a separate cost to the minimum price. It has used calculations from analysts Laing and Buisson in 2010 showing that travel time is about 19% of contact time.

The £15.19 an hour minimum also include mileage, employers’ national insurance contributions, holiday pay, profit of 3% and the costs faced by the provider in running their business, which is equivalent to 27% of the price.

Interviewed on the Today programme on Radio 4 this morning, Association of Directors of Adult Social Services president Sandie Keene described the UKHCA’s calculations as a “helpful model” to assist providers and councils in negotiations over price, but insisted there was no set price for care.

She said there was now “very little public finance available for councils” and called for a “national debate” about how much society was willing to pay for care.

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3 Responses to Home care leaders reveal ‘minimum price’ councils should pay for care

  1. Alan Loft February 5, 2014 at 12:13 pm #

    I still can’t understand why all of this is still an issue.
    What is the profit margin for the Agencies ??
    ours is Nil
    So we can afford to pay (average over a week) £10.70/hr
    We are a Social Enterprise who put people before money.
    Who from the agencies would like to say why they can’t do this.
    We have been doing this for three years so the model works.
    The number of times we put this forward it never gets any further I wonder
    why. people before money.
    There is also a Social Enterprise Social Workers working now so be carefull
    it is a way of making it fairer.

  2. Richard Elliott February 5, 2014 at 1:34 pm #

    I am intrigued by the UKHA allow 27% for providers costs. The normal managemnt charge by vol orgs is 10-15% (good is 12%) but that is on top of the wages for the home care managers who do assessment, supervise and organise staff so may be about the same?
    The social enterprise above does not say what its hourly charge to the LA is ? they must pay there home care managers? 3% is required for futur investment by most orgs. But the key thing is if you want good quality staff with any level of personal initiative you need to pay at least £10.40 ph.

  3. heather February 8, 2014 at 12:50 pm #

    it wouldn’t be so bad if the care worker got minimum wage for the hour, i work as a care worker in Nottingham and am on minute to minute payment i can walk 15 mins to a house that i log n for ten minutes as i am only required to empty a commode, i will be payed from log in on there house phone this would be 1 fith of the hourly rate or 6.31 then i may wal ten mins to my next call that may be half hou, the r walk a further 15 mins to do a 15 min call so that’s a total f 1 hour 35 mins that i get paid 55 minutes for, the company don’t pay travel most only pay 8p a mile petrol for them who drive, i do not et reimbursed travel time or bus fair, some weeks im out the house 60 hours and get paid 35,, its a very underpiad job, i dont know how thay can justifie the care workers wage,,hb