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Lowest care home profitability prompts Care England Budget action

All-time low care home profitability has prompted Care England to make several care sector related requests in the forthcoming Spring Budget.

These are as follows:

  • Zero-rate VAT for Welfare Services to enable care providers to recover input VAT
  • Provide enhanced support for energy costs and remove the 5% VAT surcharge and Climate change Levy on energy bills
  • Make the £130m EBSS AF payments directly to social care providers, not those in receipt of care who are not directly responsible for paying energy bills
  • Establish a national tariff of £1,500 per week to be imposed for a specified period and clear care needs specifications to aid hospital discharges
  • Actualise a fully funded 10-year workforce vision, as set out in the People at the Heart of Care white paper
  • Introduce a government-led pay framework to establish a minimum care wage, above the level of the NLW and tied to NHS band 3.
  • Increase the number of VISA allocations given to care providers, at a reduced cost to aid in lowering the number of vacancies within the care sector
  • Confirm what will happen to the minimum salary set for care workers entering the UK via the Shortage Occupation List route (previously set above the NLW), once the NLW rises to £10.42 from 1 April 2023
  • Allow care workers to work full-time hours without losing access to benefits


Care England CEO Martin Green said: Care home data indicates occupancy has not recovered to pre-pandemic levels and EDITDARM margins fell to a low of 22.7 per cent last year, with decreasing profitability being driven by staff and rising utility costs. The sector is brimming with innovation, energy, and commitment. We must overcome the political impetus that social care has been ‘reformed,’ ‘solved,’ or ‘fixed’.  Unfortunately, we are a long way from this reality.”

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