Fair cost of care and market sustainability

As part of the government’s adult social care reform agenda, local authorities are required to complete a fair cost of care exercise to arrive at a shared understanding with providers of the local cost of providing care. In addition, authorities are required to publish a Market Sustainability Plan detailing how they plan to move towards a fair cost of care (where this is not already being paid) over the next three years.

GOV.UK - People at the Heart of Care: adult social care reform white paper

GOV.UK - Market Sustainability and Fair Cost of Care Fund 2022 to 2023: guidance

In undertaking this exercise, local authorities will look to identify the lower quartile, median and upper quartile costs in the local area for the following care categories:

  • 65+ care homes
    • standard residential care
    • residential care for enhanced needs
    • standard nursing care
    • nursing care for enhanced needs
  • 18+ domiciliary care

This exercise, and the funds being made available to local authorities, are designed to support:

  • Preparation by local authorities of their markets for reform, including the further commencement of Section 18(3) of the Care Act 2014 in October 2023.
  • Local authorities moving towards paying provides a fair cost of care.

For the purposes of the exercise, the Department of Health and Social Care (DHSC) consider ‘fair’ to mean the median actual operating costs for providing care in the local area (following completion of the exercise). ‘Fair’ also means what is sustainable for the local market. This is, on average, what local authorities are required to move towards paying providers. The government recognise the complexity of local care markets, and the risk of oversimplification, but that it is necessary to find a way of standardising cost reporting; the median is designed to reflect that there are a range of local costs.

Our ambition is for as many providers to engage in this exercise as possible. This is your opportunity to put across the actual costs of delivering care in Warwickshire. We would encourage any provider, regardless of whether they contract with Warwickshire County Council or not, to participate in the exercise.

Please direct queries, comments, or requests for more information, to faircost@warwickshire.gov.uk

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