Care Homes: Fees and Charges
(asked on 30th May 2025) - View Source
Question to the Department of Health and Social Care:
To ask the Secretary of State for Health and Social Care, what assessment he has made of the potential merits of capping the cost of care homes.
Under the Care Act 2014, local authorities are tasked with the duty to shape their care market and to commission a range of high-quality, sustainable care support services to meet the diverse needs of all local people. This includes encouraging a wide range of service provision to ensure that people have a choice of appropriate services.
Fee rates are set by providers of adult social care, the majority of which are in the independent sector. The Department does not have powers to set or recommend the level of fees that private care homes can charge. However, all businesses are required to comply with the Consumer Rights Act 2015 by ensuring that they use fair and clear terms in their standard agreements with customers.
The Government is supporting local authorities by making available up to £3.7 billion of additional funding for social care authorities in 2025/26. This includes over £1 billion for the Market Sustainability and Improvement Fund (MSIF), with one of the three target areas local authorities can spend their allocations on being to improve fee rates to providers.
In a letter I sent out to Council Leaders in January 2025, I set out the expectation that in 2025/26, when commissioning services, local authorities should ensure fee levels for care and support services take account of the actual costs of care in their area, including inflationary and all other pressures, such as the rise in National Living Wage and the changes to employers National Insurance Contributions.
As part of our monitoring of the MSIF grant conditions and to understand fee rates more generally, local authorities are required to provide an annual return to the Department including data on the fee rates they pay care providers. The Government publishes this data annually, with the latest being available at the following link: