The Homecare Association’s Minimum Price for Homecare in England calculates what homecare providers need to deliver sustainable homecare services that comply with employment and care regulations. The latest update follows the National Living Wage (NLW) increase to £12.71 and changes to Statutory Sick Pay (SSP) coming into effect from April 2026.
The updated ‘Minimum Price’ shows the amount required by providers to pay care workers the statutory minimum wage for all working time, including travel, waiting and training, mileage and wage-related on-costs, plus the minimum contribution required to run a compliant care business and meet Care Quality Commission (CQC) standards, safeguarding duties, insurance, training, digital systems and regulatory oversight.
The Homecare Association warns that, while Parliament has strengthened employment rights for care workers, successive national funding decisions have failed to keep pace with the real cost of delivery. As a result, most councils and NHS bodies continue to commission homecare at rates that fall below the Minimum Price and, in many cases, below the legal cost of employment.
Analysis of data obtained by the Homecare Association under Freedom of Information legislation shows that 29% of public bodies are paying below the amount needed to cover the direct costs of employing care workers at the statutory minimum wage alone, before any contribution to business overheads, quality improvement or resilience. In the Homecare Association’s view, this places providers in an impossible position – either operate at a loss, cross-subsidise publicly funded care with private fees or withdraw services altogether.
According to the Homecare Association, the fact that the Autumn Budget provided no additional investment and the Provisional Local Government Finance Settlement does not ring-fence or fully fund the costs of the fair pay agreement (FPA) or wider employment reforms, continues a long-standing pattern in which new legal duties are introduced without the funding required to deliver them, shifting financial risk onto providers, workers and people drawing on care.
The Homecare Association stresses that the Minimum Price is exactly that, a minimum, not a fair or aspirational price. It does not deliver parity with equivalent NHS roles, does not reflect the growing clinical complexity of care delivered at home and provides little headroom for innovation, training or service development. The Homecare Association continues to highlight that persistent underinvestment will force more providers to hand back contracts, reduce capacity or exit local markets altogether, leaving people without care at home and hospitals unable to discharge patients safely.
Commenting on the updated Minimum Price, Dr Jane Townson OBE, Chief Executive at the Homecare Association, said, ‘Ministers say they want higher standards of employment, better quality of care and stronger regulation and enforcement. Quality, compliant, regulated care cannot be delivered on the cheap.
‘This is the minimum we calculate to be needed to ensure payment of the minimum wage to care workers for all working time, including travel, waiting and training time, and to deliver safe and sustainable regulated care in people’s homes.
‘Parliament’s new Employment Rights Act aims to improve employment conditions for care workers and will add substantial additional costs for employers. National funding decisions have not kept pace with existing and new legal responsibilities.’
She added, ‘The Autumn Budget delivered no new investment for social care, and the Finance Settlement leaves councils, NHS bodies, self-funding citizens and providers expected to absorb the costs of the Employment Rights Act, including the Fair Pay Agreement. This is not a failure of local government. It is a failure of national funding policy.
‘Ministers want care delivered closer to home but commissioners across the system continue to buy homecare at prices that make legal compliance impossible. Government knows what homecare costs. Continuing to ignore that evidence will reduce availability of safe, good-quality homecare, deepen workforce shortages and undermine its own plans for neighbourhood health services.’
Strengthened employment rights for care workers can only succeed if they are backed by sustained national investment. Without that, rights risk becoming promises on paper rather than improvements felt by care workers in their everyday working lives. Care workers already deliver vital, skilled work in a system that is chronically underfunded. When Government introduces stronger rights without funding the true cost of care, the burden ultimately falls on workers themselves. Providers operating below cost are left unable to deliver higher pay, safer staffing, protected training time or improved conditions consistently, no matter how strong the legal framework appears. The £500m allocated for the FPA is a step in the right direction, but it does not match the scale of ambition. It falls far short of covering the real costs required to lift pay fairly, reduce excessive workloads, improve training and ensure compliance across the sector. Without adequate funding, care workers are left with raised expectations but little meaningful change. Underinvestment fuels instability. When services are under pressure, care workers experience rota gaps, understaffing, cancelled training and increasing workloads. This accelerates burnout, drives people out of the sector and increases reliance on agency staff, placing further strain on those who remain. Strengthened rights that cannot be delivered in practice risk damaging trust and worsening retention. There is also growing inequality. Care workers’ experiences increasingly depend on where they live, creating a postcode lottery that undermines the principle of national employment standards. The cost of underinvestment does not disappear. It re-emerges in delayed hospital discharges, exhausted staff, safeguarding risks and an overstretched NHS. If Government is serious about improving conditions for care workers, employment rights must be matched with funding that makes those rights real. Without that, reform risks being symbolic rather than transformative. Karolina Gerlich, Chief Executive Officer, The Care Workers’ Charity. Email: [email protected] X: @CareWorkersFund
We all believe that people working in social care deserve better pay, terms and conditions. Yet, Government places care providers in a position where they can appear pitted against their own teams by challenging plans for strengthened employment rights. Social care is fabulous, but it is breaking in a way that was only ever previously threatened. Increasingly, providers are closing or turning their back on public sector relationships. The third sector seems particularly hard hit, and with councils largely outsourcing services due to costs, it seems that no matter how well intended, raising employee conditions to the levels we all want is unaffordable in the current system. Costs, expectations and complexities of service delivery are increasing, but funding is not matching this. So, what makes Government believe it can introduce ongoing NMW uplifts and stronger employment rights without further social care investment? If councils and charities, often with tax breaks not afforded to independent providers, cannot make it work, how can others be expected to keep taking on these extra costs without the commensurate funding uplifts? Bring in an FPA by all means, but if its ambition is truly about ‘fostering a sustainable adult social care market’, Government must bring in some kind of fair commissioning agreement that underpins it. Commissioning practice, not just funding, is key to employee satisfaction for public sector facing providers, and improving this would aid improved attraction and retention of a caring, skilled and supported workforce. We must all use our resources in the most positive way but better investment and planning is needed to strengthen social care provision and make sustainable, resilient, preventive, responsive and innovative networks that enable people to live their fullest lives with choice and control – and, as Social Care Future says, in the place they call home. Raina Summerson, Group Chief Executive Officer, Agincare. Email: [email protected] X: @Agincare