Research and analysis

Market Sustainability and Improvement Fund (MSIF): provider fee reporting 2025 to 2026

Published 21 August 2025

Applies to England

Main points

This is a report on the average fees paid by local authorities to external care providers during the 2025 to 2026 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 2025 to 2026.

Over 90% of local authorities stated that they increased the average fees that they pay to the following 6 types of external care providers. On a weighted average basis, local authorities reported the following provisional increases in fee rates when compared to 2024 to 2025:

• home care - an increase of 5.3%
• care homes without nursing for clients aged 65 and over - an increase of 5.3%
• care homes with nursing for clients aged 65 and over - an increase of 4.9%
• supported living - an increase of 5.6%
• care homes without nursing for clients aged 18 to 64 - an increase of 5.0%
• care homes with nursing for clients aged 18 to 64 - an increase of 6.0%

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.

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 2025 to 2026. Adult social care is almost wholly provided by a market of private and charitable providers and the fee rates paid to them by local authorities are important for the effective functioning and sustainability of the care market.

This release is part of the Market Sustainability and Improvement Fund (MSIF) 2025 to 2026. This information is reported annually by 153 local authorities with adult social services responsibilities, using a questionnaire collecting information as part of the fund’s wider reporting process. Similar collections before 2023 to 2024 were collected from 151 local health and wellbeing boards as part of the improved Better Care Fund (iBCF).

Fees paid to external care providers

Average fees and uplifts in 2025 to 2026

For each of the 6 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 2024 to 2025.

Table 1 (below) shows that provisional average hourly fees paid to external providers of home care were £25.05 per contact hour in 2025 to 2026 (an average 5.3% increase on 2024 to 2025 final data). With respect to care homes without nursing for clients aged 65 and over, the average fee was £956 per client per week (an average 5.3% increase), and for care homes with nursing for clients aged 65 and over, the average fee was £1,089 per client per week, excluding NHS funded nursing care (an average 4.9% increase).

Table 2 (below) shows that provisional average hourly fees paid to external providers of supported living were £22.95 per contact hour in 2025 to 2026 (an average 5.6% increase on 2024 to 2025 final data). With respect to care homes without nursing for clients aged 18 to 64, the average fee was £1,835 per client per week (an average 5.0% increase), and for care homes with nursing for clients aged 18 to 64, the average fee was £1,486 per client per week, excluding NHS funded nursing care (an average 6.0% increase).

This release uses weighted average fee rates that are consistent with the methods used by NHS England. Home care and supported living fees are weighted by each local authority’s mid-2023 population aged 18 and over. Care home fees are weighted by the 2023 to 2024 NHS England unit cost denominators (the number of weeks of care) for externally run care homes. A zero weight is assigned where fee data is missing.

We have changed the approach to calculating England average fee rate uplifts in this year’s publication. In previous publications in this series, these uplifts were a weighted average of the local authority level uplifts using the same methods described above for fee rates. Instead, we now calculate the percentage change in the reported England weighted average fee rates.

The main advantage of the new approach is that it is simpler to understand and calculate. Potential disadvantages are that:

• councils with higher fee rates have a greater influence on the result than in the previous approach
• the new approach relies on a high response rate in both years that are being compared

There is no significant missing data in this release. The 2 approaches give similar results overall.

Please note that this means that the rows titled ‘Local authority average % change between 2024 to 2025 (provisional) and 2023 to 2024 (final)’ are different from the equivalent rows in last year’s publication.

Table 1: change in average fees paid to external care providers as at 2025 to 2026 (home care and age 65 and over)

	External providers for home care (£ per contact hour)	External providers of care homes without nursing for clients aged 65 and over (£ per client per week)	External providers of care homes with nursing for clients aged 65 and over (£ per client per week)
Local authority average fee 2025 to 2026 (provisional)	£25.05	£956	£1,089
Local authority average fee 2024 to 2025 (final)	£23.79	£908	£1,038
Local authority average fee 2024 to 2025 (provisional)	£24.00	£888	£1,027
Local authority average % change between 2025 to 2026 (provisional) and 2024 to 2025 (final)	5.3%	5.3%	4.9%
Local authority average % change between 2024 to 2025 (final) and 2023 to 2024 (final)	5.5%	8.5%	7.0%
Local authority average % change between 2024 to 2025 (provisional) and 2023 to 2024 (final)	6.4%	6.1%	5.9%

Table 2: change in average fees paid to external care providers as at 2025 to 2026 (supported living and age 18 to 64)

	External providers for supported living (£ per blended hour)	External providers of care homes without nursing for clients aged 18 to 64 (£ per client per week)	External providers of care homes with nursing for clients aged 18 to 64 (£ per client per week)
Local authority average fee 2025 to 2026 (provisional)	£22.95	£1,835	£1,486
Local authority average fee 2024 to 2025 (final)	£21.73	£1,747	£1,402
Local authority average fee 2024 to 2025 (provisional)	£21.33	£1,692	£1,396
Local authority average % change between 2025 to 2026 (provisional) and 2024 to 2025 (final)	5.6%	5.0%	6.0%
Local authority average % change between 2024 to 2025 (final) and 2023 to 2024 (final)	8.3%	9.3%	7.1%
Local authority average % change between 2024 to 2025 (provisional) and 2023 to 2024 (final)	6.3%	5.9%	6.6%

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
• respite
• crisis support
• outreach
• personal assistants
• individual service funds
• community support

Some councils have included links to published rate tables.

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.

Reasons why this MSIF data differs from published ASC-FR data

Official unit cost data has been collated by NHS England through the Adult Social Care Finance Report (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
• 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 11 June 2025)
• separates out supported living fee rates

Respondents were asked to provide provisional average fee rates for 2025 to 2026 versus comparable final data from 2024 to 2025. As part of this, local authorities were asked to restate or update provisional 2024 to 2025 data that they provided in May 2024.

For some local authorities, the final fee rates in this release for 2024 to 2025 are significantly different from the provisional fee rates collected in May 2024, with the final data suggesting significantly higher care home fees. Much of the difference will be due to the final 2024 to 2025 data covering the whole financial year (notably at a time of higher inflation), but some may reflect inconsistencies in reporting.

Previous iBCF and MSIF reporting showed some inconsistencies with the corresponding ASC-FR reports. A recent comparison to ASC-FR data is not currently possible as the latest publication relates to 2023 to 2024, 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 because their fee rates may not be representative of those for local authority eligible clients. (Full cost clients are 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.)

For different reasons, the ’Adult Social Care Finance Return (ASC-FR) 2023-24 -guidance’ on NHS England’s Social care collection materials 2024 page) asked 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.

Reasons why final fee rates for 2024 to 2025 were higher than provisional fee rates

Tables 1 and 2 show that the final care home and supported living fees for 2024 to 2025 are higher than the provisional fees. The following paragraphs summarise different reasons for this. These reasons are given in full in table A of the accompanying spreadsheet.

The final fees for 2024 to 2025 were likely to be higher than the provisional fees because they cover the whole financial year rather than an initial budget or projection. Although inflation has fallen from its 2022 peak, it was still significant during this year.

Some changes to fees were because councils had resolved errors in the earlier 2024 to 2025 submission or updated their methodology. For example, some previously reported nursing rates included NHS Funded Nursing Care when they should not have done (for example Islington and South Tyneside). Liverpool amended their methodology to improve accuracy for residential and nursing fee rates.

Lastly, care homes for people aged 18 to 64 can in particular relate to small numbers of people with varying needs, so changes in the group of people receiving care can significantly alter the fee rate.

Acknowledgments

The Department of Health and Social Care (DHSC) would like to thank the 152 local authorities who reported the data which has been drawn on for this report. MSIF data collection is managed by DHSC.

About this data

Collection

Reporting for the MSIF was administered by DHSC. Local authorities submitted reporting returns on spreadsheet-based templates made available on GOV.UK. 152 returns were received out of 153, giving a 99% response rate in total.

See the initial reporting template on the Market Sustainability and Improvement Fund 2025 to 2026 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. See the ‘Voluntary compliance with the Code of Practice for Statistics’ section below for further information on data quality and quality assurance.

For some local authorities, the final fee rates in this release for 2024 to 2025 are significantly different from the provisional numbers collected in May 2024 and published in October 2024. Specifically, the care home fee uplifts are often higher. Much of the difference will be due to final 2024 to 2025 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 data cleaning. 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 sets the standards for organisations in producing and publishing official statistics and ensure that statistics serve the public good.

This 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)

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 publication and its tables before public release is limited to DHSC staff involved in the production and the preparation of the release. We will follow the DHSC revisions and corrections 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
• Government Operational Research Service
• 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 99% response rate (152 local authorities). 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 England.

Assured quality (Q3)

While the data has been checked for obvious 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 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. Findings derived from 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. Beginning in 2023 to 2024, we 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

For media enquiries, phone 020 7972 3272 or email pressofficenewsdesk@dhsc.gov.uk.

For public enquiries and the responsible statistician, email statistics@dhsc.gov.uk.