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Government sets out Fair Cost of Care rules

Guidance has been published to support local authorities in England to pay a fairer rate of care to adult social care providers.

The guidance to support the £762 million Market Sustainability and Fair Cost of Care Fund instructs councils to.

  • carry out cost of care exercises to improve understanding of how much it costs to provide care in their specific area, including assessing the various costs care providers face in the area
  • ensure the care market in the area is sustainable and identify and increase rates where a fairer cost of care is needed
  • spend no more than 25 per cent of funding in year one towards implementation costs to ensure remaining funding goes towards genuine increases in fee rates.

The aim of the fund is to support councils to close the gap between the rate paid by people paying privately for adult social care and those funded by the local authority. During year one local authorities will receive an extra £162 million, followed by £600 million in years two and three.

However, the guidance stops short of setting a fee rate, to account for local market variations.

The fairer care fund will be funded by the Health and Care Levy, a UK-wide 1.25% National Insurance Contribution which will start from April 2022.

In total it will provide more than £1 billion to support a 10-year vision for adult social care, which includes at least £500 million to develop and support the workforce. 

Local authorities will also benefit from the increased local government finance settlement helping them to support the care market to respond to the reforms required by the sector.

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