Market Sustainability and Fair Cost of Care

A fund set up to support local authorities to move towards paying providers a fair cost of care.

Market Sustainability and Fair Cost of Care

In December 2021 the Government announced a wide-ranging and ambitious reform of adult social care, with a People at the Heart of Care white paper being published, outlining a 10-year vision designed to put personalised care and support at the heart of adult social care.

In preparation for this, on 16 December 2021, the Government announced the Market Sustainability and Fair Cost of Care Fund to support Councils to move towards paying providers a fair cost of care, and to prepare their local markets for the adult social care reform, such as the cap on care costs, which has now been delayed for at least a further two years.

As a condition of receiving funding, local authorities had to evidence the work we are doing to prepare our markets. To do this, Barking and Dagenham council along with all other local authorities in England undertook the Fair Cost of Care exercise in Autumn last year where we engaged in-scope 18+ domiciliary, residential and nursing care providers to reach a shared understanding of how much it costs to deliver care that is sustainable and fair for the local care and support market.

Please note: 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.

Details of Fund

Originally, when the fund was announced, a total of £1.36 billion across the country was ringfenced to support councils to work towards the fair cost of care figures identified in the fair cost of care exercise over the course of 3 years until 2025.

However, as part of the new administration’s autumn statement in 2022, it was announced that the charging reforms are being delayed by two years and with that the ringfenced nature of the funding was removed. Though there has been a rise in adult social care funding overall, the parameters of the funding have been broadened to include all of Adult Social Care services and not Fair Cost of Care related impacts alone.

Following this update to funding, it is understood that the rates we pay providers in the future will not directly and solely be drawn from the final figures of the fair cost of care exercise but will be one factor for consideration amongst others that will inform the fee setting process.

Results from the Fair Cost of Care Exercise

Annex B

In our first set of results from the exercise, we are publishing our Annex B document that summarises how many providers engaged with the exercise and outlines our methodology behind reaching our fair cost of care figures.

From the returns we received, collated and analysed, we identified the lower, median and upper quartile for each cost line totalling up to the final figures for the following care categories in the local area:

  • 65+ care homes made up of residential care, residential care for enhanced needs, nursing care and nursing care for enhanced needs
  • 18+ domiciliary care

Market Sustainability and Fair Cost of Care - Annex B - Cost of Care Report (PDF, 528KB)

Market Sustainability Plan

Our Market Sustainability Plan assesses and demonstrates how we will ensure local care markets are sustainable.

Section 1 is an assessment of the current sustainability of local care markets and how delays to charging reform have impacted our ability to manage current pressures on market sustainability. Section 2 analyses the impact of future market changes between now and October 2025 for each of the service markets, and Section 3 outlines plans to address sustainability issues including a summary of how Fair Cost of Care funding for 2022/2023 has been committed.

Market Sustainability and Fair Cost of Care – Annex C – Market Sustainability Plan  (PDF, 228.62 KB)

Market Position Statement

Our Market Position Statement (PDF, 14.81 MB) is currently being updated and will be published in early 2024.