Fair cost of care and market sustainability

Our market sustainability plan sets out how we'll continue to work with providers and wider partners to develop services for people using Adult Social Care (ASC) home care and residential/nursing homes.

In late 2021 it was announced that local authorities would receive Market Sustainability and Fair Cost of Care grant funding. The primary purpose of the fund is to support local authorities to prepare their markets for reform.

As a condition of receiving the funding, local authorities were required to undertake a fair cost of care exercise with care homes (65+) and home care providers (18+) to determine a median rate for the market, as part of the preparations for social care reform.

The results and analysis of the process, which have been submitted to the Department of Health and Social Care (DHSC) can be found on our website. 

The government have stated that the Fair Cost of Care exercise was not to be regarded as a fee setting exercise. However, there was an expectation that, unless there was reason to consider the median figures as unreliable, local authorities would move towards the median market rate:

• over a three year period
• with additional government funding

This would enable fees paid by councils to begin to address the difference between the rates paid by the local authority versus the rate paid by a private client.

It was subsequently announced as part of the autumn statement 2022 that social care reforms will be delayed.

As a council, we do not consider the median figures obtained to be reliable in assisting with fee setting due to data quality issues, as outlined in our annex B reports below. These issues make it unclear regarding the extent to which the figures reflect the local actual cost of care. Therefore, we will not be relying solely on this data for future decision making.