United Kingdom Homecare Association (UKHCA) has announced its new calculation for the Minimum Price for Homecare.
The new price will be set at £20.69 per hour, effective from April 1, when the UK’s statutory National Minimum Wage and National Living Wage will increase to £8.20 – for 21 to 24-year-olds – and £8.72 per hour respectively.
This represents an increase of £1.76 on last year’s rate of £18.93 and is calculated based on the assumption that all care workers receive at least the NLW, among other factors.
UKHCA said the minimum price, which is widely recognised in the social care and health sectors, covers the minimum legally compliant pay rate for care workers (excluding enhancements for unsocial hours working), their travel time, mileage and wage-ralated on-costs.
It also includes the minimum contribution towards the costs of running a care business at a financially sustainable level.
Announcing the new price, UKHCA policy director, Colin Angel, said councils and the NHS must recognise the true costs of home care.
“Paying providers fees which in some cases barely cover the costs of the wage-bill continues to destabilise an already fragile state-funded market,” he added.
“Persistently underestimating providers’ business costs is taking a risk with the quality of services, the experience of the workforce, and providers’ ability to comply with the legal requirements placed on them.
“UKHCA will continue to challenge central government on the overall funding of social care. However, it is local authorities and the NHS, which are responsible for determining the prices they pay for homecare services at a local level.”
The breakdown of the costs included in the new minimum £20.69 hourly rate based on the statutory National Living Wage are:
- Care workers’ contact time: £8.72
- Care workers’ travel time: £1.70
- Employers’ contribution to NI & pensions: £1.14
- Other wage on-costs: £1.97
- Care workers’ mileage: £1.36
- Cost of running the business: £5.20
- Providers’ profit or surplus: £0.60
UKHCA warned that a number of councils and NHS commissioners will state that local conditions influence the costs of care in their area, but local conditions are likely to mean that the costs are higher – rather than lower – than UKHCA’s Minimum Price for Homecare.
“This is because our rate is calculated on the minimum legal pay rate, which is unlikely to enable employers to recruit sufficient careworkers from their local labour market,” the association said.
“UKHCA strongly cautions local authority and NHS commissioners against under-estimating costs in a bid to reduce the total hourly price paid for care. A cost-saving approach which effectively ‘salami-slices’ the different elements of providers’ costs is taking risks with the quality and safety of a regulated service.”