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Fee Rates Paid to Providers Do Not Cover the Cost of Care says ARC England

The Association For Real Change (ARC England) Learning Disability Research Unit today launches their Local Authority Fee Rate Map, which shows that in many cases fee rates do not cover the cost of care.

Over 80% of local authorities provided their fee rate data in response to our Freedom of Information request and the map shows a wide variation in fee rates between areas in England and Wales. It can be seen that in many local authorities’ fee rates have fallen behind provider costs and that annual uplifts have not kept pace with inflationary pressures.

In order to pay the Real Living Wage of £10.90 (£11.95 in London), supported living and domiciliary care providers need to receive a fee rate of £22.69. The data obtained shows that:

  • 76 out of 78 local authorities who responded (97%) paid less than £22.69 per hour to supported living services.
  • 104 out of 114 responding local authorities (91%) paid less than £22.69 per hour to domiciliary care providers.

Inflation and cost of living pressures have combined with the requirement that providers meet annual National Minimum Wage or National Living Wage increases to mean some services are now financially unsustainable. We are concerned that this could lead to people with learning disability and autistic people no longer being supported to live well within their communities.

For example:
– In supported living services, where staff wage payments represent approximately 85% of providers’ costs, the 2019-20 National Minimum Wage increase by 5% to £8.21, resulted in a rise in operating costs of 4.13%.
– By 2022-23 the NMW increase to £9.50 resulted in an operating costs rise of 8.23%, this in a sector already hit by severe recruitment and retention problems, due in part to low pay and competition from rival sectors like retail and hospitality which can afford to pay higher wages.

Our Fee Rate Interactive Map has been designed to be a tool for collaboration between commissioners and providers in forthcoming conversations about fee rates and inflationary uplifts for 2023/4. ARC England would therefore like to invite all local authorities to use the interactive maps as a benchmarking tool when setting fee rates and uplifts with providers. (See below for Local Authority Fee Rate Interactive Map online briefing Invitation.)

ARC England Director Clive Parry says:
“We are hearing from our members that providers are using reserves to cover operating costs and in some cases are having to hand back contracts because they are not being paid enough to allow them to deliver safe, high-quality care and support at the rate offered by commissioners

“The widening gap between fee rates and operating costs is why we are now calling on the Government to demonstrate that they understand and value learning disability and autism services by taking action to ensure that local authorities can commission services for people with a learning disability and autistic people at sustainable rates.

He continues, “It is important to recognise, however, that there are examples of good practice where, despite a lack of resources, efforts are being made some local authorities to set fee rates that better keep pace with inflationary cost pressures.”

As the House of Lords Adult Social Care Committee puts it in their recent report Adult Social Care Committee A “gloriously ordinary life”: spotlight on adult social care report December 2022,

“Adult social care and the budgets of local authorities for its delivery have been chronically under-funded for many years — both a cause and a consequence of the lack of attention paid to the sector. For example, while the total budget for publicly funded adult social care in 2022/23 is £17.1 billion, the commissioning budget for the NHS for the same year is £153 billion. This is despite the fact that the adult social care workforce is larger than that of the NHS.”

The interactive maps are arranged by local authority and by constituency and can be accessed at