An Exceptional Business Opportunity

The cost of social care, for both short and long-term support, incurred by local authorities during 2019-20 was £19.7bn, with £2.5bn attributed to home care. Both the demand and cost of social care is expected to increase significantly.

The Cost of Care

The average cost of care per hour paid by local authorities to an external provider for home care was £17.48 per hour.
Regionally there is wide variation in the costs of care paid by local authorities to providers. For example, hourly home care rates paid by local authorities to external providers ranged by region from £15.40 in the North East to £19.94 in the South West, and within the South West average costs range from £16.08 to £25.56 between constituent local authorities.
Local authorities cannot reasonably control many of the factors that affect the costs of care. These include the number of high‑need individuals, the wider care market, staff costs, the local economy, levels of rurality and some of the accommodation costs borne by providers.

Increasing Demand

In terms of demand, approximately 57% more adults aged 65 and over will need care in 2038 compared with 2018. The projected increase in demand is closely matches between care at home (59%) and care homes (55%).

Demand is projected to increase faster for privately funded care homes (67%), due to a projected increase in the proportion of adults aged 65 and over who own their own home so are unlikely to be eligible for local authority support towards their care home fees.

Overall, for adults aged 65 and over, the main driver for these increases is an ageing population, with a 41% increase in the number of adults aged over 65 between 2018 and 2038 projected.