Market sustainability and fair cost of care

As part of the government’s adult social care reform agenda, local authorities are required to complete a fair cost of care exercise to arrive at a shared understanding with providers of the local cost of providing care.

In addition, authorities are required to publish a Market Sustainability Plan detailing how they plan to move towards a fair cost of care (where this is not already being paid) over the next three years.

For the purposes of the exercise, the Department of Health and Social Care (DHSC) consider ‘fair’ to mean the median actual operating costs for providing care in the local area (following completion of the exercise). ‘Fair’ also means what is sustainable for the local market. This is, on average, what local authorities are required to move towards paying providers.

The government recognise the complexity of local care markets, and the risk of oversimplification, but that it is necessary to find a way of standardising cost reporting; the median is designed to reflect that there are a range of local costs.

More information about the Market Sustainability and Fair Cost of Care Fund.

Market shaping

We have developed our Adult Social Care Market Position Statement. It information on supply and demand, planned changes and emerging trends in the borough. This document should prove useful to existing providers and those considering starting a new business or extending their operations into the borough.

We have also recently updated our Accommodation-based care commissioning statement (pdf, 4.1 MB). This document provides detailed information on how we will work with our partners and providers of accommodation with care and support.

Cost of care report and Market Sustainability Plan

Further to the government announcement of the Market sustainability and fair cost of care fund, we have completed cost of care exercises for older adult care homes and 18+ domiciliary care and have finalised our Market Sustainability Plan. The final cost of care report was submitted to the Department of Health and Social Care on 1 February 2023 and the Market Sustainability Plan was submitted on 27 March 2023.

Read the cost of care reports below:

• Annex B Cost of care report 65+ care homes (pdf, 218 KB)
• Annex B Cost of care report 18+ domiciliary care (pdf, 244 KB)

The Market Sustainability Plan identifies the key risks to market sustainability in the local area and also sets out how the local authority plans to address the sustainability issues identified, including how the fair cost of care funding will be used over the next one to three years.

We intend to hold a further provider forum to present our Market Sustainability Plan.

Read our Market Sustainability Plan (pdf, 254 KB).

We want to take this opportunity to thank all care providers which took part in the exercises.

How to get involved

We will be engaging with providers over the coming months as we progress work on the fair cost of care exercise at a Southwest London level. More information will be published here as it becomes available.

If you have any queries or comments in the meantime, email us at thecareact@richmond.gov.uk.

Further advice and support

• marketsreform@dhsc.gov.uk - Department of Health and Social Care and for questions specific to the policy
• Marketsandcommissioning@local.gov.uk - CHIP (jointly delivered through ADASS and LGA) and for general questions
• FCC@careprovideralliance.org.uk - Care Provider Alliance, predominantly for use by care providers with general queries and support requests
• support@costofcaretoolkit.co.uk - ARCC-HR Ltd for technical questions about the domiciliary toolkit
• carecubed@iese.org.uk - iESE for asking technical questions about the residential toolkit