Market sustainability and fair cost of care
Cost of care context
The market sustainability and fair cost of care fund guidance developed in support of the adult social care reforms, required councils to work in partnership with care providers to arrive at a shared understanding of the local cost of providing care. The key aim of the fund is to support local authorities to prepare their markets for reform, including charging reform and therefore to reduce the current gaps in fee rates paid by local authorities and self-funders. Although the Government has now delayed these reforms until October 2025, the information from this work is being published to aid planning towards market sustainability and future implementation of the reforms.
Providers were requested to submit their costs and then local authorities, or consultants employed by them, would use this information to calculate 'fair costs' for adults over the age of 65 in residential and nursing provision and adults over the age of 18 for domiciliary care. The 'fair cost' being defined as the median cost calculated from the submissions received. For providers 'fair' means that they will be able to cover the cost of care delivery and be able to make a reasonable profit. For local authorities, 'fair' recognises the responsibility that they have in stewarding public money, including securing best value for the taxpayer.
The exercise has helped local authorities to understand where they are now and where they need to be in relation to fee rates paid to be ready for the proposed adult social care reforms. The reports detailing our approach to undertaking cost of care exercises and the outputs from the review are attached below.
Fair cost of care report - care homes (PDF) [341KB]
Fair cost of care report - care homes - accessible version (PDF) [118KB]
Fair cost of care report - domiciliary care (PDF) [283KB]
Market sustainability plan
In line with the market sustainability and fair cost of care fund guidance, the council is required to develop a market sustainability plan to support the outputs of the cost of care exercises and to identify the market shaping needed to deliver within the confines of available funding. The market sustainability plan includes:
- The current market position of our residential, nursing and domiciliary care markets
- The potential impact and key risks of the Social Care Reform (SCR) on our social care markets
- Plans to address the current market sustainability issues within residential, nursing and domiciliary care markets over the three years 2022/23 to 2024/25
In line with Department of Health and Social Care guidance, Norfolk County Council submitted an interim market sustainability plan on 14 October 2022.
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