Fair cost of care review

All local authorities must complete a cost of care review; it’s a condition of future of Department of Health and Social Care funding. 

The fair cost of care review focuses on older people’s care homes (65+) and home care providers (18+). Currently, working age adults’ providers are not included in the review.

Government guidance: Market sustainability and fair cost of care fund 2022 to 2023

East Sussex fair cost of care surveys

We sent out our fair cost of care surveys on 10 June 2022, with a return date of 1 July 2022. Our aim is to reach a shared understanding of what it costs to run quality and sustainable care provision in our area.

We’ve appointed an external organisation, Care Analytics, to help us gather and analyse data.  This will ensure we have an independent analysis of the cost of care survey results.

Frequently asked questions (FAQS)

Why are you asking for this information?

We need this information to enable us to submit the following to the Department of Health and Social Care (DHSC) by 14 October 2022:

  • Cost of care exercises for care homes (65+) and home care (18+): this is the survey we are asking you to complete
  • Provisional market sustainability plan, using the cost of care exercise as key input to identify risks in the local market. Final plan due: February 2023
  • Spend report detailing how funding allocated for 2022 to 2023 is being spent in line with the fund’s purpose.

What does ‘fair cost of care’ mean?

DHSC says that in terms of understanding the cost of care, fair means the median actual operating costs for providing care in the local area (following completion of a cost of care exercise) for a series of care categories.

This must include and evidence values for return on capital and return on operations, and travel time for domiciliary care.

Taken together, this is what is described as the ‘fair cost of care’ and is, on average, what local authorities are required to move towards paying providers.

In the context of specific rates for care paid, fair means what is sustainable for the local market.

  • For providers, this means being able to cover the cost of care delivery and being able to make a reasonable profit (including re-investment in your business), surplus, or meet your charitable objectives.
  • For local authorities it recognises the responsibility we have in stewarding public money, including securing best value for the taxpayer.

Do we have to take part in the survey?

There’s no mandatory requirement to fill in the survey, but we would strongly encourage you to take part. Your input will be used to inform the future funding arrangements for the sector.

Why aren’t you using the iESE cost of care tool that some other local authorities use?

The iESE tool wasn’t released in time for our cost of care planning process, given the DHSC’s autumn deadline for completing the work. We therefore commissioned Care Analytics to co-ordinate the exercise.

The Care Analytics’ survey looks different to the iESE cost of care tool?

Ours is a wider survey which contextualises the cost of care rather than just looking at cost data.

Both achieve the same outcome: providing the information the DHSC needs.

Is Supported Living part of the scope of the 18+ home care exercise?

No, supported living settings are not required to complete the cost of care survey.

Do residential providers for younger adults with learning difficulties and autism, complete the survey?

No, the survey only needs to be completed by those care homes that primarily support older people.

Our service provides live-in carers and we do not pay hourly rates. Do we need to respond to the survey?

No, you do not need to respond to the survey.

How long does the survey take to complete?

If you send us accounts information, then the care home survey should not take more than 1-2 hours with a recent payroll and rota.

If you send us accounts information, then the home care survey should not take more than 2-3 hours given a recent payroll, rota, and access to basic ECM reporting.

Do we have to convert our accounts information to a standard format?

You can supply your most recently completed accounts and this will be converted for you.

Groups can also supply management accounts using the categories they already use and we can standardise these.

How recent do the accounts have to be?

The financial information asked for will include the last full financial year and current costs to give the best possible picture and allow for future projections to be modelled.

We are happy to receive completed accounts up to two years old. These will be adjusted for inflation.

This means you do not need to go to your accountant to get more information.

For central office expenses, can we put costs of a payroll company that we subcontract?

On the survey spreadsheet we include a list of categories mapped to Government requirements for returns, and we have added a space to add additional lines.

You could add a separate cost line to add costs of a subcontracted payroll company.

How do you account for COVID-19 financial impacts?

There is a separate question about COVID-19 financial impacts to pick up how things have changed.

Need help to complete the survey?

The surveys have been designed to be as user-friendly as possible, while also collecting all the information that is needed by the DHSC.

Guidance is included in the explanatory text for some questions and the i buttons (which show guidance when you click on them).

The survey does not ask for client-specific information.

For queries about:

 The East Sussex Registered Care Association (RCA) can offer some support to any providers who may need it to complete the costing tool.

The Association will let providers know about this offer in its newsletter and information will be on its website: East Sussex Registered Care Association or you can email FairCostofCareES@gmail.com.