Research and analysis

Market Sustainability and Improvement Fund (MSIF): provider fee reporting 2023 to 2024

Published 28 July 2023

Applies to England

Main points

This is a report on the average fees paid by local authorities to external care providers during the 2023 to 2024 financial year, and the extent to which they have increased. Local authority feedback indicates that the Market Sustainability and Improvement Fund (MSIF) and wider local government financial settlement has enabled significant uplifts to average fee levels in 2023 to 2024.

Over 90% of local authorities stated that they increased the average fees that they pay to external providers of home care, care homes without nursing for clients aged 65 and over, care homes with nursing for clients aged 65 and over, supported living, care homes without nursing for clients aged 18 to 64, and care homes with nursing for clients aged 18 to 64.

On a weighted average basis, local authorities reported the following increases in fee rates when compared to 2023 to 2024:

• home care - an increase of 9.6%
• care homes without nursing for clients aged 65 and over - an increase of 10.1%
• care homes with nursing for clients aged 65 and over - an increase of 9.6%
• supported living - an increase of 8.4%
• care homes without nursing for clients aged 18 to 64 - an increase of 7.6%
• care homes with nursing for clients aged 18 to 64 - an increase of 8.7%

Introduction

Adult social care provides support for older people and working age adults with personal and practical care needs, as well as support for their carers. In England, adults may be cared for informally by family, friends and neighbours, or formally through services that they or their local authority pay for. Publicly funded adult social care is means-tested and primarily funded through local government. Those with eligible needs, assets of less than £23,250 and low incomes, can receive help towards their care and support costs.

Adult social care currently makes up the largest area of discretionary expenditure for local authorities. To help address the pressures of an ageing population with increasingly complex care needs, increasing demand from younger adults who need support, and rising care costs, additional dedicated funding for adult social care has been made available to local authorities in recent years. This funding has included:

• adult social care support grants
• investment to ease NHS winter pressures
• the adult social care precept (flexibility to raise Council Tax)
• the Infection Control Fund and the Rapid Testing Fund
• the Improved Better Care Fund (iBCF)
• the Market Sustainability and Fair Cost of Care fund (FCC) and the Market Sustainability and Improvement Fund (MSIF).

This management information release provides data on fee levels and fee uplifts paid by local authorities to adult social care providers in the financial year 2023 to 2024. This information is reported annually by 153 local authorities with adult social services responsibilities, via a questionnaire collecting information as part of the fund’s wider reporting process. Previous collections were collected from 151 local health and wellbeing boards as part of the improved Better Care Fund (iBCF).

Fees paid to external care providers

While official unit cost data is already collated by NHS Digital through the Adult Social Care Finance Return (ASC-FR), it is published in the annual Adult Social Care Activity and Finance Report, usually 6 months after the end of the financial year it relates to.

This MSIF collection is of added value to ASC-FR because:

• it specifically relates to external care providers
• it is over a year faster because its data has been collected close to the start of the financial year (returns were required to be submitted by the end of 24 May 2023).

For this release, MSIF has additionally covered fee rates for supported living, care homes without nursing for clients aged 18 to 64, and care homes with nursing for clients aged 18 to 64. These service types are covered by ASC-FR although it does not separate out supported living. This release therefore provides insight into supported living fee rates for the first time.

Respondents were asked to provide provisional average fee rates for 2023 to 2024 versus comparable data from 2022 to 2023. Local authorities were asked to restate or update 2022 to 2023 data that they provided as part of Fair Cost of Care reporting in October 2022. For some local authorities, the fee rates in this release for 2022 to 2023 are significantly different from those collected in October 2022. Much of the difference will be due to final 2022 to 2023 data having been calculated, but some may reflect inconsistencies in reporting.

Differences between ASC-FR and iBCF data

Previous iBCF reporting showed some inconsistencies between 2020 to 2021 and 2021 to 2022 data to the corresponding ASC-FR reports. It is not yet possible to compare 2022 to 2023 data because ASC-FR data for that year will be published in October 2023, but some inconsistencies are likely due to differences in definition and purpose.

The MSIF return and the previous iBCF return ask respondents to exclude full cost clients (people who must fully fund their care because they do not meet the needs and means eligibility thresholds for local authority care, but who have asked the local authority to arrange their care on their behalf). This is because their fee rates may not be representative of those for local authority eligible clients.

For different reasons, the ASC-FR guidance asks respondents to include full cost clients. (Full cost clients are included in ASC-FR data because councils are interested in the social care outcomes achieved for such clients.)

The MSIF return and the previous iBCF return also ask respondents not to include any of their own overheads, as the focus is on the payments made to care providers.

Average fees and uplifts in 2023 to 2024

Table 1 (below) shows that average hourly fees paid to external providers of home care were £22.55 per contact hour in 2023 to 2024 (an average 9.6% increase on 2022 to 2023). With respect to care homes without nursing for clients aged 65 and over, the average fee was £804 per client per week (an average 10.1% increase), and for care homes with nursing for clients aged 65 and over, the average fee was £937 per client per week, excluding NHS funded nursing care (an average 9.6% increase).

Table 2 (below) shows that average hourly fees paid to external providers of supported living were £20.06 per contact hour in 2023 to 2024 (an average 8.4% increase on 2022 to 2023). With respect to care homes without nursing for clients aged 18 to 64, the average fee was £1,521 per client per week (an average 7.6% increase), and for care homes with nursing for clients aged 18 to 64, the average fee was £1,253 per client per week, excluding NHS funded nursing care (an average 8.7% increase).

These increases compare with a 9.7% increase in the National Living Wage from £9.50 to £10.42 per hour in April 2023, and 8.9% CPIH (Consumer Prices Index including owner occupiers’ housing costs) inflation in the 12 months to March 2023 (the announcement of data collection). While wages are the largest cost for care providers, general inflation will affect their non-wage costs.

See the accompanying spreadsheet for full local authority data tables, including cartograms of fee rates and uplifts.

This release uses weighted averages that are consistent with the methods used by NHS Digital. Home care fees and uplifts are weighted by each local authority’s mid-2020 population aged 18 and over, and care home fees and uplifts are weighted by the 2021 to 2022 NHS Digital unit cost denominators (the number of weeks of care) for externally run care homes. A zero weight is assigned where fee or uplift data is missing.

For each of the 3 fee types for which data was collected, most local authorities (over 90% in each case) reported that their average fees were increasing in comparison to 2022 to 2023. Although local authorities previously reported in-year 2022 to 2023 fee rates as part of Fair Cost of Care reporting (for home care, for care homes without nursing for clients aged 65 and over, and for care homes with nursing for clients aged 65 and over), these have not been published because they have been superseded by the 2022 to 2023 fee rates collected as part of this reporting. The updated 2022 to 2023 fee rates are generally of broader coverage and higher quality (selected responses from table A of the accompanying spreadsheet are presented in quotation marks):

• they cover the whole financial year, and therefore some local authorities have additionally captured the impact of their Market Sustainability and Fair Cost of Care Fund allocation, their discharge funding allocation, as well as uplifts delayed from April 2022. Some local authorities refer to ‘early uplifts’ (that is, prior to 2023 to 2024) being implemented in late 2022 to 2023 which are therefore captured by the updated 2022 to 2023 fee rates. for example “The homecare rate includes the ‘early uplift’ offered from December 2022, which is why the implied uplift in column E is relatively low. The ‘early uplift’ was possible by using Adult Social Care Discharge funding”.
• they cover a broader range of service users, for example, some authorities noted “In the original calculations we limited results to only OP care homes in borough, as per FCC guidance” and “The new calculation includes all care homes as a result there are some LD & MH service users aged 65 and over who are now being included but did not meet the criteria in the FCC work. As a result, the unit costs appear higher, particularly for residential placements”
• they resolve errors in the earlier 2022 to 2023 submission for example “original figures erroneously included third party top-ups” and “We have removed FNC from the nursing rate”

Table B of the accompanying spreadsheet includes comments where councils have described other fee rate uplifts besides those in tables 1 and 2 below. Services that are mentioned include day care, shared lives, extra care housing, direct payments, sleep in rates, specialist supported living, respite, crisis support, outreach, personal assistants, self-directed support, payments to carers, and individual service funds.

Note that local authorities reported greater difficulty in estimating costs per blended hour for supported living, for example “Supported living is not commissioned in a way that lends itself to arriving at a blended average expressed as a single figure, as the components are made up of day time, sleep in and live-in rates, which vary relative to complexity of need” and “… not currently able to distil supported living unit costs into hourly rates for reporting purposes as care is brokered through the council’s social care system as a weekly cost. Therefore, the total blended hours for a sample of residents (falling within a small threshold of the average weekly rate) were manually extracted from their care records and used to obtain this average rate.” This may reduce the comparability of supported living costs between local authorities and over time. Fee rates for clients aged 18 to 64 may also be more difficult to compare over time than fee rates for clients aged 65 and over, due to greater changes in the mix of client needs between years. In extreme cases these changes in the mix of client needs may make the average fee rate for clients aged 18 to 64 appear to fall.

The range of local authority responses in respect to the annual percentage uplifts submitted for each category is illustrated in the full local authority level data set in the accompanying spreadsheet.

Table 1: change in average fees paid to external care providers as at 2023 to 2024 (home care and age 65 and over)

Home care (£ per contact hour), care homes (£ per client per week)	External providers for home care	External providers of care homes without nursing for clients aged 65 and over	External providers of care homes with nursing for clients aged 65 and over
Local authority average fee 2022 to 2023	£20.60	£733	£859
Local authority average fee 2023 to 2024	£22.55	£804	£937
Local authority average % increase	9.6%	10.1%	9.6%
Number of local authorities with increase (uplift)	153	151	149
Number of local authorities with no change	0	2	2
Number of local authorities with decrease	0	0	1
Number of local authorities with missing or invalid data	0	0	1

Table 2: change in average fees paid to external care providers as at 2023 to 2024 (supported living and age 18 to 64)

Supported living (£ per contact hour), care homes (£ per client per week)	External providers for supported living	External providers of care homes without nursing for clients aged 18 to 64	External providers of care homes with nursing for clients aged 18 to 64
Local authority average fee 2022 to 2023	£18.51	£1,419	£1,155
Local authority average fee 2023 to 2024	£20.06	£1,521	£1,253
Local authority average % increase	8.4%	7.6%	8.7%
Number of local authorities with increase (uplift)	151	144	142
Number of local authorities with no change	1	3	3
Number of local authorities with decrease	0	5	6
Number of local authorities with missing or invalid data	1	1	2

Acknowledgments

The Department of Health and Social Care (DHSC) would like to thank the 153 local authorities who reported the data which has been drawn on for this report. The MSIF data collection is managed by DHSC.

About this data

Collection

Reporting for the MSIF was administered by DHSC. Local areas submitted reporting returns on spreadsheet-based templates made available on GOV.UK. 153 returns were received out of 153, giving a 100% response rate in total.

See the initial metric reporting template (May 2023) template for full details of the questions used for collection.

Data quality

The status of the data was assessed prior to publication. Although cleaning took place to exclude invalid returns, the data sets were not subject to additional quality assurance. Local authorities were not, for example, contacted for clarifications and corrections except where data was obviously invalid. Some local authorities do show high or negative fee rate changes that are at least questionable. In these cases, we have still published the data to ensure transparency, as it is difficult to determine which are incorrect and which reflect substantial adjustments. The ‘Voluntary compliance with the Code of Practice for Statistics’ section below contains further information on data quality and quality assurance as part of voluntary compliance with the Code of Practice for Statistics.

For some local authorities, the fee rates in this release for 2022 to 2023 are significantly different from those collected in October 2022 (but not published). Much of the difference will be due to final 2022 to 2023 data now being available that covers the whole of the financial year, but some may reflect inconsistencies in reporting. To avoid inconsistency between reported fee rates and percentage uplifts, the template only allowed respondents to enter fee rates. Percentage uplifts were then calculated and displayed to the user.

Data analysis

DHSC carried out the analysis and quality assurance. The data underwent a series of basic validation checks to exclude any invalid returns. However, as noted above, further clarifications from local authorities were not sought. See the accompanying spreadsheet for the full local authority level data set.

Voluntary compliance with the Code of Practice for Statistics

The Code of Practice for Statistics was published in February 2018 to set standards for organisations in producing and publishing official statistics and ensure that statistics serve the public good.

This Market Sustainability and Improvement Fund (MSIF) release is a management information release rather than an official statistics publication. This is due to the volume of qualitative comments collected and limitations in the quality assurance process. Nonetheless, where possible, attempts to adhere to the code of practice have been made, which are outlined below.

Trustworthiness: trusted people, processes and analysis

Honesty and integrity (T1)

The MSIF data releases are managed by analysts and policy officials in DHSC. This involves the design of data collection tools and analysis.

Independent decision making and leadership (T2)

The work is governed by the DHSC Social Care Evidence team. It is accountable to DHSC’s Head of Profession for Statistics.

Orderly release (T3)

Access to the data before public release is limited to DHSC staff involved in the production and the preparation of the release. We will follow the DHSC revision policy.

Transparent processes and management (T4)

DHSC has robust, transparent data-management processes. All data is provided by local authorities who received notification that the data would be published. Data quality issues are clearly set out in this publication.

Professional capability (T5)

Analytical work is managed by professionally qualified and experienced analysts - professional members of the Government Economic Service, Government Statistical Service and the Government Social Research profession.

Data governance (T6)

DHSC uses robust data collection and release processes to ensure data confidentiality.

High quality: robust data, methods and processes

Suitable data sources (Q1)

Data originates from the 153 local authorities in England who are responsible for providing adult social care services, with this collection achieving a 100% response rate. The local authorities are ultimately responsible for the quality of their data, though the template clearly explains data requirements immediately above the data entry boxes. However, where the quality of data is unclear, the issues are clearly highlighted. Alternative national and official statistics are signposted where relevant.

Sound methods (Q2)

Data collection tools and processes are robustly designed and tested prior to use. The guidance, validations and questionnaire for the data collection have been refined over time. The approach to weighting is consistent with the Adult Social Care Finance Return from NHS Digital and the questions and guidance have been revised over time.

Assured quality (Q3)

While the data has been checked for errors and quality assured by analysts in DHSC, further validation and triangulation with additional data sources has not taken place. As such, the release clearly states that the data is self-reported and highlights any limitations.

Public value: supporting society’s need for information and accessible to all

Relevance to users (V1)

Understanding how the MSIF funding is being used is of significance to central government, local authorities and their partners, as well as in the public interest.

Accessibility (V2)

Officials have had access to the data prior to publication to monitor progress and the impact of MSIF. The data may therefore be used for operational purposes before publication in this data release. We have used accessible formatting to ensure the content is accessible to a wide range of users.

Clarity and insight (V3)

Data is clearly presented and explained, with suitable visualisations and underlying local authority level data sets made available.

Innovation and improvement (V4)

This data collection series started in spring 2017 (as part of iBCF reporting) and has been progressively refined. We will continue to do so. For 2023 to 2024, we have extended coverage to supported living and to care homes for clients aged 18 to 64.

Efficiency and proportionality (V5)

Burdens on data providers have been considered and this data has been collected alongside other MSIF data. 

Accompanying tables

An accompanying spreadsheet is available to download alongside this release, containing local authority level data tables and cartograms.

Enquiries

Media enquiries

Phone: 020 7972 3272

Email: pressofficenewsdesk@dhsc.gov.uk

Public enquiries and responsible statistician

Email: statistics@dhsc.gov.uk