Staff costs in care homes at all-time high, says NatWest

A surprise increase in the use of agency staff within the UK’s care homes has resulted in nursing home staff costs equating to 55% of turnover, according to NatWest’s Care Home Benchmarking Report published today.

This major cost is felt by more than half the nursing homes, where it would be expected due to the shortage of nurses. However the report highlights that the rise in agency staff usage is also apparent in residential homes, with 41% of those surveyed using this service. As a consequence financial results across the entire sector are being negatively affected.

The report analyses data from 156 care homes, including both SME and corporate providers, and gives a geographic breakdown to allow for regional comparisons and make it easy for care home owners to benchmark their own business.

The difference in fee rates in care homes throughout the UK is becoming more apparent. With the majority of residents in Northern Ireland and north of England paid for by the local authority, the average fee rates in these regions are amongst the UK’s lowest. The average fee among residential homes is £597 and among nursing homes it increases to £730 per week.

For the first time the report includes children’s homes which represent a small but important part of the care home sector. Again, the main cost is staff which represents 56% of turnover. This cost is also reflective in the high fee rates of £3,631 which are associated with this highly vulnerable group. Locality remains an issue for children’s homes as 55% of children are placed more than 20 miles away from their family home where on average they stay for two and a half years.

Jeremy Huband

Jeremy Huband

Jeremy Huband, head of healthcare at NatWest commented: “In producing this report, which for the first time includes Northern Ireland and children’s homes, we have identified a number of norms. This helps us provide further support to our customers through being able to question any outliers to these norms that they may be experiencing.

“We are proud to support this important, and growing, sector and I was enthused to see that the majority of operators we visited were extremely optimistic about what the future holds.”


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