Embargoed until 00.01am on Tuesday 7 July 2026
The Homecare Association reports that 80% of care workers use their own vehicles to reach the people they support, yet 59% of providers can only afford to reimburse them at 40p per mile or less. More than a quarter of providers have already turned away new clients because of the cost of fuel.
Care workers, and the providers who employ them, are absorbing the cost of the latest fuel price spike, because the public funding that pays for homecare has not moved to meet it. That is the finding of a new survey of homecare providers published today by the Homecare Association.
The survey of 202 provider organisations, representing almost 27,000 care workers and around 48,000 people receiving care, examines the impact of fuel and other cost increases driven by the recent conflict in the Middle East. It is the third time in four years the Association has surveyed members on a fuel price shock, following two surveys in 2022.
The findings show a sector with no financial headroom to absorb a cost it did not cause. 80% of care workers use their own vehicles to travel between visits, but 59% of providers reimburse mileage at 40p per mile or less - well short of the new HMRC mileage allowance, which rose from 45p to 55p per mile in May 2026. 5% pay no mileage at all. This is not a matter of providers choosing not to pay: around 45% told us that two-thirds or more of their clients are funded by a council or the NHS at fixed prices, leaving no way to recover a higher mileage cost unless commissioners increase fee rates.
Far from passing the problem on, many providers are absorbing what they can. More than a quarter (27%) have given cash advances to care workers who could not otherwise afford to put fuel in their cars to get to work, and others have raised mileage rates or paid one-off supplements out of margins that, for many, no longer exist.
The scale of the gap is easy to illustrate. Take a provider with 50 care workers, each driving their own car around 10,000 business miles a year - a realistic figure for a busy community round. Moving from a typical 40p per mile to the new 55p approved rate adds 15p to every mile, or around £75,000 a year for that one provider. For a provider currently paying 30p, the gap to 55p is 25p a mile - roughly £125,000 a year. No commissioner has been funded to cover any of it, and on a fixed-price public contract, there is no way to recover it.
Three in five providers (61%) say care workers have asked for a higher mileage rate, more than a quarter (26%) say staff intend to look for work elsewhere to cut their travel costs, and more than one in ten (11%) have already lost staff as a result.
The consequences are being felt by people who need care. More than a quarter of providers (28%) have had to decline new clients because of fuel costs. More than eight in ten providers (83%) are concerned or very concerned about the impact on the financial viability of their organisation.
Despite this, not a single provider in the survey had received any additional funding from their local authority or local NHS to help with fuel costs, and 98% were unaware of any contingency arrangements to help care staff obtain fuel in the event of queues or shortages. The squeeze extends beyond fuel: seven in ten providers (71%) have seen the price of PPE rise, and 89% have not been able to build these higher costs into their fee rates for 2026-27.
The Homecare Association says these pressures land on a sector where care is already commissioned below the cost of safe, legal delivery. Its Minimum Price for Homecare in England for 2026-27 is £34.42 per hour, compared with an average price actually paid of £24.36 in 2025-26.
Comment
Dr Jane Townson OBE, Chief Executive of the Homecare Association, said:
"Every time fuel prices spike, the bill lands on the lowest-paid people in our workforce. Care workers are driving to see some of the most vulnerable people in the country, often in old, fuel-hungry cars, and most of them are losing money every time they get behind the wheel. That is not a sustainable way to run essential public services."
“It would be easy to say providers should simply pay the higher rate. But most of our members are already shielding their staff from costs they cannot recover. When care is bought on a fixed council contract priced below the cost of delivery, there is nothing left to fund a higher mileage rate - only the choice between subsidising a worker’s fuel out of a margin that does not exist or turning people away. Neither is a choice anyone should have to make.”
“The increase in the HMRC mileage rate to 55p is welcome, but it is a tax allowance, not funding. The Chancellor named care workers - ‘from care workers to plumbers’ - as the people the higher rate would help, and we agree they should get it. But not one council has been funded a penny to pay it, and almost every provider in our survey was already reimbursing below the old 45p rate. A rate announced in Westminster does not reach a care worker’s pay packet unless the funding follows it to the frontline.”
"We are now seeing the same pattern we saw in 2022: care workers ask for help, some leave, providers turn people away, and public funding does not follow. A sector that is already paid £10 an hour below the cost of safe delivery has no margin left to absorb a fuel shock, a PPE price rise, or anything else. Something has to give, and at the moment it is care workers' pay and people's access to care."
"Underfunding homecare does not save the public purse - it just moves the cost elsewhere. It costs the NHS around £400 a night to keep someone in a hospital bed they do not need to be in, while councils baulk at paying £25 an hour for the care that would get them home. The government needs to provide immediate funding to cover fuel and PPE costs, and to close the underlying funding gap so that providers are never again this exposed to the next cost shock."
What the report calls for
The report sets out recommendations for central government, and for local authorities and the NHS. In summary, it calls for:
- Immediate, ring-fenced grant funding to cover the additional cost of fuel needed to deliver homecare while prices remain elevated, reaching the frontline through fee rates;
- Commissioners to be funded to reimburse mileage at the HMRC approved rate of 55p per mile;
- The structural funding gap in homecare, estimated at around £3.25 billion across the UK, to be closed so that fee rates cover the full cost of safe, legal care;
- A National Contract for Care, setting a statutory minimum price for homecare so that no public body can commission below the cost of lawful delivery;
- Government funding for the higher cost of PPE and consumables arising from international disruption;
- Local authorities to put in place and promote contingency arrangements so care workers can obtain fuel during queues or shortages; and
- A move away from purchasing isolated minutes of care towards contracts that guarantee hours, supporting workforce stability and fair travel reimbursement.
You can read the report here: The impact of rising fuel and other costs on homecare: Findings from a survey of Homecare Association members.
ENDS
Notes to Editor
- The Homecare Association is the professional association for homecare providers, representing around 2,100 members across the United Kingdom and supporting the delivery of high-quality care in people's own homes.
- This report is published by the Homecare Association. It is based on an online survey of member organisations conducted in spring 2026. Responses were self-selecting and not every respondent answered every question.
- The conflict in the Middle East that began on 28 February 2026 disrupted global oil supply, principally through uncertainty over the Strait of Hormuz. Average UK pump prices reached around 159p per litre for unleaded petrol towards the end of May 2026 and 192p per litre for diesel in mid-April 2026, before falling back to 153p and 172p per litre respectively by late June 2026. This is still well above the broadly stable prices of 135p for petrol and 143p for diesel seen through most of 2025.
- In May 2026, the government increased the HMRC approved mileage rate for cars from 45p to 55p per mile for the first 10,000 business miles, backdated to April 2026, alongside an extension of the 5p per litre cut in fuel duty.
