No homecare contract studied in England met the Homecare Association's minimum price

Not one contract met the minimum price

Not a single contract in the Homecare Association's research for 2026-27 met its minimum price, according to its annual report on fee rates for state-funded homecare in England (opens in a new tab). According to the report, the average council fee rate was £25.37 an hour, against the association's minimum price of £34.42.

That matters beyond any one fee negotiation. Councils and the NHS would need an extra £2.3 billion to fund sustainable homecare at National Living Wage level, according to the Homecare Association (opens in a new tab). The government's promises on care workers' pay sit on top of that shortfall.

Homecare operators doing state-funded work are, on these figures, mostly paid less than their staff cost to employ. Commissioners face the harder question of how long a market priced this way holds together.

Most contracts paid less than a care worker's wages

The minimum price is the rate the association reckons a provider needs to pay staff the National Living Wage for all working time, including travel, cover statutory on-costs and run a regulated service. For 2026-27 it is £34.42 an hour, according to the Homecare Association's own website (opens in a new tab).

The deeper finding sits below that line. According to the Homecare Association, 61% of contracts paid less than the direct employment cost of a care worker on the National Living Wage, before any office, training or other running costs are counted.

This year made it worse. Fee uplifts averaged around 3.7%, below the 4.1% rise in the National Living Wage itself, according to the report (opens in a new tab). The National Living Wage has gone up by more than half since 2019, as the chart shows, and an uplift that trails it means the gap grows rather than closes.

London pays least, though care costs more to deliver there

Greater London had the lowest average fee rate of any English region, at £22.66 an hour, according to the Homecare Association. The report notes London has some of the highest costs of delivering care.

Providers in the capital face the widest distance between what the work costs and what councils pay for it. It also suggests the rates councils set are not tracking local cost.

The reforms rest on fees nobody has yet funded

The government has committed to a National Care Service founded on the principle that everyone contributes and everyone is covered, the Department of Health and Social Care set out on 9 October (opens in a new tab). Minister Karin Smyth told the Commons (opens in a new tab) that a workforce action plan will bring in a national collective pension scheme and sit alongside the first Fair Pay Agreement.

Neither sets out how council commissioning rates will be funded to deliver them, a gap that echoes our piece on the care worker pension with nobody yet named to pay. In homecare, these plans reach care workers through the hourly rate a provider receives.

The gap rises to almost £3.0 billion to bring care worker pay in line with an NHS Band 3 healthcare assistant with two or more years' experience, according to the Homecare Association (opens in a new tab). Chief executive Dr Jane Townson warned the National Care Service and Fair Pay Agreement "will remain out of reach" while commissioners pay below the cost of delivering care.

Townson called for ring-fenced investment, a statutory minimum price for homecare, commissioning reform and a fully funded workforce strategy.

A council can dispute the benchmark, not the wage law

The minimum price is the association's own calculation, and the headline figures do not set out how many councils or contracts the research covered. A council can fairly question the benchmark.

The comparison with the National Living Wage, which is the law, is harder to dispute. If this year's uplifts already trailed the wage rise, who funds the first pay rise under a Fair Pay Agreement on contracts that pay below wage cost today?