Decision details

Care Providers Annual Fee Review 2024-25

Decision Maker: Corporate Director - Community Wellbeing

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: No


Local Authorities have a duty under the Care Act 2014 to meet assessed eligible care and support needs. The Care Act 2014 also places a duty on Local Authorities to shape markets and enable a sustainable and diverse range of care providers to deliver innovative and cost effective services that promotes the wellbeing of people who need care and support.

In line with contractual obligations, the council must review fees paid to Social Care providers on an annual basis.

Legal precedent indicates that whilst there is a need for Councils to have due regard to the cost of care this is not a singular factor in the setting of fee rates for services. In addition, there are expectations that Councils also consider factors such as:
Experience of local care agency closures, lack of closures
Over / under supply of provision
Rates paid by other comparable LA’s
Consideration of management accounts from providers
The position of those providers with whom it has been able to reach agreement
Change or lack of change as CQC ratings
Localised cost movements e.g. locally advertised job rates, staff turnover etc.

The Council must balance its duty under the Care Act 2014 with its legal duty to set a balanced budget when considering fees for care providers.

The proposed recommendations balance the need for the Council to meet its duties under the Care Act within financial resources available.

In determining uplifts and new fee rates for 2024/25 the council has considered the impact of increases in the cost of wages and other cost increases.

The Council has also considered benchmarking information regarding current fee rates for councils in the West Midlands (14 Councils). It has also considered latest intelligence regarding councils’ proposals for fee rate increases for 2024/25 within the region.

It is also important to note that this review has considered other challenges faced by provider, informed by their feedback to commissioners. Areas identified include:
• Recruitment and retention
• Increases in NLW
• Agency staffing costs
• Utilities
• Fuel / Travel costs
• Cost of living impact on running costs
• Cost of Voids (supported living)
• Insurance
• Training

Care Homes
The market for care home provision in Herefordshire is buoyant, there have been no care home closures in the last 12 months and planning requests are being received for the development of new homes in the county.

Regional benchmarking of 14 councils information indicates that Herefordshire Council’s standard fee rates are mid-range compared with other Councils’ rates within the West Midlands.

It has been decided that an increase of7% is applied to all care home provision with effect from 1 April.

Home Care
New arrangements for commissioned home care have been in place since November 2021. In November 2022 a decision was taken to introduce a secondary framework to address sufficiency challenges in the market. As a result of this the waiting list for home care has reduced from over 100 in April 2023 to under 10 in February 2024.

Regional benchmarking information indicates that Herefordshire’s urban rate is the 4th highest in the region and its rural rate is 2nd highest across the region.

It has been decided that an uplift of 7% is applied to both urban and rural rates for Home Care with effect from 1 April 2024.

Supported Living
A new framework for Supported Living is currently out to tender with the market. The new framework maintains the current fee structure in relation to a lower hourly rate that applies to core hours and waking nights in 24/7 properties; a higher hourly rate that applies to additional 1:1 hours and the new sleep-in rate of £135 (based on a 9 hour sleep-in) which will be introduced from 1 April 2024.

The new sleep in rate that will be introduced from April 2024 brings Herefordshire Council approach in line with the majority of other Local Authorities across the region and country in relation to payment of a lower level of fee for sleep-in support. Effectively this reduces the hourly fee rate for sleep-ins from £17.04 in 2023 to £15.00. At £15.00 per hour however, this rate remains significantly above the average level of sleep in payments across the region.

In relation to the lower and higher rates in Herefordshire it is difficult to make direct comparisons with other Councils in the region as only Warwickshire council operates a similar 2 rate system, with most Councils operating a single rate.

In order to mitigate risks to the sustainability of the market in relation to Supported Living as a result of the impact on providers of the implementation of a reduced rate for sleep-ins an uplift of 8.33% is to be provided for the lower and higher rates from 1 April 2024.

Community Activities
The Council does not operate standard fee rates for community activities. Rates vary for individuals services based on the type of provision and level of needs of the individuals supported.

A new framework for Community Activities is currently out to tender with the market. Existing services that transfer onto the new framework will continue to be paid on the basis of current fee rates subject to any agreed annual uplift determined by the Council to be applied from 1st April 2024.

It has been decided that an uplift of 7% is applied to all fee rates for community activities with effect from 1 April 2024.

Shared Lives
Shared lives services remain an important part of the service offer in Herefordshire, with plans to further develop and expand services in the future.

Whilst benchmarking information relation to 2022/23 indicates that Herefordshire rates are lower than a number of other councils in the region, it is noted that the morale of shared lives carers has improved over the last year as a result of them having received an uplift in line with other services (which had not been the case previously). They also received an increase in board and lodging payments in 2023/24 with a commitment to review these annually in line with benefits increases.

It has been decided that an uplift of 7% is applied to fee rates for shared lives with effect from 1 April 2024.

Direct Payments

Direct payments can be used to fund a range of different services, with varying fee rates.

It has been decided that Direct Payments are increased by 7% from April 2024 in line with other proposed uplift levels (with the exception of supported living which is not a service routinely secured through the use of direct payments).

Standard processes will be followed where individuals in receipt of a direct payment have surplus or insufficient funds to meet their care needs.

Contact: Hilary Hall, Corporate Director Community Wellbeing Email:

Publication date: 21/03/2024

Date of decision: 21/03/2024

Accompanying Documents: