Last Updated on October 19, 2026
A new report from the Homecare Association has found that the state-funded homecare funding gap has widened to £2.3bn. This comes as councils across England continue to purchase homecare at rates far below the cost of delivering safe, regulated and legally compliant care.
The report, Fee Rates for State-Funded Homecare in 2026-27, found that the average council fee rate for homecare is £25.37 per hour, compared with the Homecare Association's Minimum Price for Homecare of £34.42 per hour.
Not a single contract reported in the research met the Minimum Price, representing the lowest rate at which providers can meet their legal obligations to staff, pay for all working time including travel and waiting time, and cover the costs of running a regulated service.
The report also found that:
- 61% of contracts paid less than the direct employment cost of a care worker receiving the National Living Wage.
- Fee uplifts averaged around 3.7%, below the 4.1% increase in the National Living Wage.
- Greater London had the lowest average fee rate of any region at £22.66 per hour, despite having some of the highest costs of care delivery.
- Councils and the NHS together would need to invest an additional £2.3bn to fund sustainable homecare provision based on the National Living Wage, but this rises to almost £3bn to bring care worker pay in line with an NHS Band 3 healthcare assistant with two or more years' experience.
The Homecare Association is calling on Government to provide immediate, ring-fenced investment to close the homecare funding gap, introduce a statutory minimum price for homecare, reform commissioning practices and develop a fully funded workforce strategy.
Commenting on the new report's findings, Dr Jane Townson OBE, Chief Executive at Homecare Association, said, 'Government has set out an ambitious vision for adult social care, including a National Care Service, a fair pay agreement and a stronger workforce. But these ambitions will remain out of reach if councils and NHS bodies continue to buy homecare below the cost of delivering it.
'When commissioners pay less than the direct employment costs of care workers, providers are left with nothing to cover supervision, training delivery, recruitment, technology, insurance and the other essentials required to deliver high-quality regulated care. The consequences are borne by care workers, providers, families and ultimately the NHS.
'Homecare helps people live independently, prevents avoidable admissions to hospital and supports timely discharge. Investing in homecare is one of the most effective ways to improve people's lives while reducing pressure elsewhere in the health and care system.
'Free care at the point of use must also mean fair funding at the point of delivery. If Government wants a National Care Service built on strong foundations, it must ensure commissioners pay a fair price for care.'
To read Fee Rates for State-Funded Homecare in 2026-27, click here.
In other news, Skills for Care has published the findings of its latest annual State of the adult social care sector and workforce in England report.