New UKHCA Minimum Price for Homecare

January 21, 2020

The United Kingdom Homecare Association (UKHCA) has revealed its new calculation for the Minimum Price for Homecare for 2020. This follows the announcement of the upcoming increase in the UK’s statutory National Minimum Wage (NMW) and National Living Wage (NLW).

UKHCA’s Minimum Price is widely recognised within the social care and health sectors in all four UK administrations. Indeed, councils in England are directed to UKHCA’s methodology in paragraph 4.31 of the Care and Support Statutory Guidance, published by the Department of Health and Social Care.

The new recommended Minimum Price for Homecare is £20.69 per hour, and should take effect from 1st April 2020, when the NMW and NLW will increase. This is an increase from the previous £18.93 per hour announced in January 2019.

The new Minimum Price for Homecare includes enough to cover:

  • £8.72 for careworkers' contact time.
  • £1.70 for travel time.
  • £1.36 for mileage costs.
  • £5.20 for running the business.

Other costs included, such as National Insurance (NI) contributions and profit can be seen in the breakdown on the UKHCA website.

A number of councils and NHS commissioners might state that local conditions influence the costs of care in their area. However, local conditions are usually likely to mean that the costs are higher than UKHCA’s Minimum Price for Homecare, which is calculated on the minimum legal pay rate, says the Association.

In calculating this rate for April 2020 to March 2021, UKHCA made certain changes to its calculations from the previous year to ensure it is in line with current procedures. These changes include:

  • Assuming that all care workers, including the 11% of the workforce who are under 25 years of age, receive at least the statutory National Living Wage.
  • Using data from the Office for National Statistics to amend the assumption for sick pay, increasing it from 0.5% to 2.9% of gross pay, NI and pension contributions.
  • Increasing the mark-up for the costs of running a service from 33.8% to 35.1%, recognising the increasing costs of regulation of provider organisations and/or registration of the workforce in each of the UK nations.
  • Reassessing assumptions for the costs of running the business and reorganising the way these are shown. This helps explain how the costs of the care agency itself are likely to be distributed between different activities that providers are required to undertake.

A full update and further breakdowns are available on the UKHCA website.

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My council has introduced a compulsory 1.1% uplift to all rates, these will be reviewed in October 2020. 1.1% is less than the cost of living, and takes my hourly rate up to £17.69 (from £17.50). If my council decide to continue with this 1.1% increase yearly, then I calculate that I will not be financially viable after October 2021. If they decide that there will be no increase in October 2020, then I will cease to be financially viable at the end of this year. They are also considering introducing minute by minute invoicing, and compulsory costly electronic monitoring.… Read more »