Local authorities dominate the market for standard home care.
An economist would call their power that of a “monopsony” i.e. a dominant purchaser who exerts control over the market.
There is a small private market, and niche areas like live-in, in which private companies excel. But the vast majority of hours in home care are bought by local authorities - and they control the pricing. That gives them huge power over recruitment in the market because effectively, they control pay rates.
Year after year after year, prices for home care have been kept artificially low, by local authorities, themselves squeezed by funding difficulties.
𝗧𝗮𝗸𝗲 𝗼𝗻𝗲 𝗲𝘅𝗮𝗺𝗽𝗹𝗲.
A recent tender for a large county authority offered the price of £15.65 per hour.
Invoices had to be billed by the minute. Rates are pro rata to that price, so a half hour visit, the majority time band purchased, would need to be charged at £7.83.
Do the math.
Minimum wage is £8.91 per hour.
30 minutes pay 4.46 Travel time (say 10 minutes) 1.49 Holiday pay 0.73 NI 0.60 Pension 0.20 Mileage expenses (say 3 miles) 0.75
This amounts to £8.23 – and that is without any margin for the provider to pay office staff, recruit, train, PPE, office rents etc.
𝗜𝘁 𝗷𝘂𝘀𝘁 𝗱𝗼𝗲𝘀 𝗻𝗼𝘁 𝘀𝘁𝗮𝗰𝗸 𝘂𝗽!