Care providers to receive fairer costs for providing care

The government has announced that local authorities in England will be supported by £1.36 billion from the Health and Social Care Levy to pay a fairer rate of care to adult social care providers.

As part of the government’s 10 year vision for reform set out in the People at the Heart of Care white paper, the Market Sustainability and Fair Cost of Care Fund will increase the support available for the care sector, closing the gap often seen when people paying privately are forced to pay a higher rate than those funded by a local authority.

The new guidance sets out how local authorities must: carry out cost of care exercises to improve understanding of how much it costs to provide care in their specific area; ensure the care market in the area is sustainable and identify and increase rates where a fairer cost of care is needed; and spend no more than 25 per cent of funding in year one towards implementation costs to ensure remaining funding goes towards genuine increases in fee rates.

During year one local authorities will receive an extra £162 million, followed by £600 million in years two and three.

Health and Social Care Secretary Sajid Javid said: “This is the beginning of one of the most comprehensive reform plans that this country has ever seen in adult social care. The Health and Social Care Levy will help fund reforms to social care and the NHS - ensuring everyone who needs support is cared for in the right place at the right time. For this to happen we need a thriving adult social care market and this will only be possible if providers receive a fairer cost for care.”

The Health and Care Levy is a UK-wide 1.25 per cent National Insurance Contribution which will start from April 2022 to help the NHS and adult social care to recover and reform after the pandemic.