Delving deeper into care rates
Market Insight 28 October 2021 28 October 2021
UK & Europe
The BBC has this week reported on data obtained from a number of sources in respect of care rates in the UK. The figures will be of interest to personal injury practitioners attempting to value the cost of care.
Figures at a glance
- The Homecare Association considers the true minimum hourly rate for a care agency carer in the UK is £21.43
- The average hourly rate for a directly employed carer is £24.94 according to software company The Access Group
- The government has announced a £162.5m fund for carers having already confirmed a £5.4bn levy for social care over the next three years
Clyde & Co has crunched the numbers from these data sources and note that data collected by the Homecare Association includes care rates that provide for a profit element of 60p per hour which, based on the quoted rate of £21.43, is a 3% mark-up. Local authority (LA) payments for care do not cover the minimum cost set out by the Homecare Association. Whereas the private care rates obtained by The Access Group include a mark-up of £4.11 which is around 19%. Therefore, what the report suggests is a very wide discrepancy in profit margins between LA funded care and private care.
This report from the Homecare Association coincides with the release of the updated ASHE figures which shows an average increase in care rates across the 60th-90th percentile of 2.6%. It is important to note that the figures provided in the ASHE data largely cover state funded care rates, which, as the Homecare Association study shows, are much lower than private care rates typically seen in catastrophic injury claims funded by insurers.
Our own experience is that private care rates have seen a steady increase in recent years, with support worker/rehabilitation assistant rates reaching as high as £26 per hour. This links in with data obtained from The Homecare Association which found Wiltshire to be the area in the UK attracting the highest hourly rates for carers at £26.11. Whereas Halton is only attracting hourly rates of £12.68, highlighting the inequality in care rates across the country with the most deprived areas having the lowest carer rates.
It remains to be seen if private care rates will continue to rise. The answer could be gleaned from data obtained from ‘Skills for Care’ who have found that:
- Vacancy rates in carer roles are now back above their pre-pandemic levels
- Since March 2021, there has been a decrease in jobs (filled posts) of around -1.8%
- In 2020/21 adult social care jobs increased by 2.8%. In domiciliary care services jobs increased by 7.4%
The data suggests a struggle in recruiting carers which will of course lead to a higher demand and therefore potentially increasing care rates. We will continue to monitor this position and the effect it will have on the costs of future care.