A new hard-hitting report from the Homecare Association reveals government cuts have caused widespread exploitative commissioning by cash-strapped councils, crippling state-funded homecare. You can download the report here.
Fee Rates for State-Funded Homecare in 2025-26.
The Association says national and local government are complicit in “state-sponsored labour exploitation”. 27% of homecare contracts in England are at rates below direct employment costs at the legal minimum wage, undermining safety and quality of care, worker welfare and rights, and continuity of services.
“When public bodies buy care at prices that don’t even allow payment of the minimum wage, it’s not efficiency, it’s enabling modern slavery,” said Dr Jane Townson OBE, Chief Executive of the Homecare Association.
“Ministers tell everyone they are introducing a Fair Pay Agreement to attract British workers and avoid the need for international recruitment, but this is a fantasy. Our research shows there isn’t enough money in the system even to pay all homecare workers the minimum wage of £12.21 per hour. It’s a scandal of epic proportions on this government’s watch. And it must stop.”
Key findings:
- 27% of contracts fall below the minimum cost of employing a careworker at £12.21/hour, including travel and training.
- Six councils in England, including Labour-led authorities, offered 0% uplift in 2025–26, despite 10–12% cost pressures on providers.
- The average council fee rate is just £24.10/hour, compared to the Homecare Association’s Minimum Price of £32.14/hour.
- Only 1% of contracts meet or exceed the legal and operational threshold for sustainable, safe care.
A pre-emptive warning to the Treasury
The Association is issuing a direct challenge to ministers ahead of the Comprehensive Spending Review on 11 June warning that if social care is again ignored in favour of NHS investment, the consequences will be severe.
Since 2022/23, the government has allocated an additional £28.5 billion to the NHS (1), more than the entire social care budget for all English local authorities combined (£26.9 billion in 2022/23) (2). Meanwhile, homecare providers are being asked to shoulder rising wage and tax costs with no matching investment.
“We support the government’s 10-year health plan and the three shifts from hospital to community, illness to prevention, and analogue to digital. This is the right course but the government must stop pretending it can deliver this plan by focusing only on the NHS and starving social care,” said Dr Jane Townson OBE. “The evidence is now overwhelming and ignoring it in this Spending Review would be a catastrophic mistake.”
The Association warns:
- A fair wage for care workers requires a fair price for homecare. Unless the Fair Pay Agreement is accompanied by reform of local authority commissioning and contracting, and closure of the current £1.6 billion funding gap in England to pay the legal minimum wage, labour exploitation and workforce shortages will persist.
- Government and the Fabian Society projections underestimate the true cost of delivering fair pay and safe care by failing to account for historic deficits.
- Without sufficient funding, we risk harm to individuals, heightened burdens for families and increased pressure and cost to the NHS.
Real consequences for real people
Research published by the Association of Directors of Adult Social Services and the Care Provider Alliance has revealed a stark picture of growing unmet need and service failure:
- Over 418,000 people are waiting for care assessments or support to begin (3).
- 57% of providers plan to hand back public contracts and 22% are considering closure or sale (4).
- Careworkers are quitting at unprecedented levels because of low wages and job insecurity.
“This isn’t a future risk, it’s happening now.”
“Failure to support us all to live well at home has far-reaching consequences. Ambulance queues, corridor care, burgeoning waiting lists for assessment and treatment, unnecessary suffering and death, and economic inactivity. This affects people of all ages.”
What needs to change
Ahead of the 11 June Spending Review, the Homecare Association is calling on the government to:
- Invest at least £1.6 billion immediately to local authorities in England to ensure careworker wages meet legal minimums.
- Introduce a National Contract for Care that guarantees sustainable, lawful fee rates.
- Fully fund the Fair Pay Agreement and ensure it addresses existing shortfalls, not just future aspirations.
- Treat social care as an equal partner to the NHS, not a subordinate or afterthought.
“The Spending Review must mark a turning point.”
“This time, the government cannot plead ignorance. The evidence is here. The need is urgent. Ministers must match their words with action or stand accused of knowingly perpetuating exploitation and neglect.”
Contacts
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