Sheffield City Council approves lower than expected uplift in care home fees

Mar 18, 2022
Scott is the partner responsible for looking after the firm’s healthcare and medical sector clients. Scott also specialises in advising small businesses.
Sheffield City Council Care Home

Sheffield City Council (SCC) have this week announced that they are going to increase adult social care fees by 3.13%. The main reasons the SCC have decided to increase these fees are:

  • The increase to the National Living Wage of 6.62% from April
  • The additional 1.25% in National Insurance Contributions
  • The increasing costs of energy and buildings

SCC have said that this increase will help mitigate care providers against inflationary pressures, however many providers do not feel that this increase is sufficient to meet rising costs and is effectively a fee-cut in real terms.

News of the proposed uplift was communicated to providers on the afternoon of Friday 11th March, with the comments invited by Monday 14th March, ahead of the Cabinet approval meeting Wednesday 16th March. It is fair to say that the tight reporting deadlines have not been well received by providers.

The basis for the Council’s report and uplift seems to be linked to a Consumer Price Index (CPI) rate of 3.1%, taken from the September 2021 levels. CPI in March 2022 stands at 5.5%, with inflation expected to reach 8% in quarter 2 of the year and therefore the uplift is not considered to keep pace with rising cost pressures.


The Sheffield Care Association criticise small increase as ‘inadequate’

SCC have been criticised by the Sheffield Care Association who say that the 3.3% increase does not sustain the market and only covers a fraction of what they need in order to continue operating.

They claim that the SCC is fully aware of the additional costs of insurance, gas, electricity, water, food & waste, wages, national insurance etc. The 3.13% increase simply does not cover the cost of these increases. In fact, this increase does not even cover the cost of the 6.62% increase in the National Living Wage alone. Never mind all the other inflationary pressures being put on the care sector. Furthermore, this report has not stated whether the 1.25% increase in National Insurance is being funded by this 3.13% increase.

The sector is already in crisis due to recruitment and retainment issues as well increasing demand leading to staff burnouts only being made worse by the pandemic. Care home operators in the local area are in complete disbelief after having months of discussions with the SCC providing evidence that 20% increase was needed at a minimum. The Sheffield Care Association have said that this increase in funding is totally inadequate and will have serious repercussions on the viability of the sector moving forward. This decision is likely to lead to care workers losing their jobs and care homes potentially closing.

Scott Sanderson Healthcare Partner at Hawsons commented:  “Clearly the now agreed uplift put forward by Sheffield City Council is disappointing news for all providers in the City. The sector has been under immense pressure during the pandemic and that looks set to be the case moving forward with rising costs and effectively less funds being made available to support these.”

Free initial meeting

Scott Sanderson

Partner, Sheffield

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