Annex B Home Care - Hounslow Cost of Care Exercise


From the outset, it is important to acknowledge the fundamental limitations of the data and the unknown variables that are key constraints for the analysis of the cost of care data. Hounslow proceeded to analyse cost lines and applied a consistent approach to profit/surplus, with reference to evidence-based industry guidance. Nevertheless, the data quality concerns are such that, even after final analysis, it is necessary for the local authority to consider other factors in setting fee rates as the Cost of Care outputs alone do not provide a reliable basis for fee setting.  

The outcome of the cost of care exercise is not intended to be a direct replacement for the fee setting element of the local authority commissioning process or individual contract negotiations. It is expected that actual fee rates may differ, as the outcome of sound judgement, evidence and local negotiation. 

From a sub-regional perspective, NW London will be referring to this exercise as the ‘cost of care’ dropping the ‘fair’ prefix as it is misleading. As a collective we have agreed that the cost of care figures can realistically only inform the fee setting process and not replace it due to the limitations of the exercise, data quality issues, time constraints not allowing for appropriate due diligence, and the median being an unsuitable metric. 

The outputs of this exercise will be one element to inform future negotiations, taking into consideration other known market factors including inflation, demand, capacity, benchmarking, quality and importantly affordability for the Local Authority and availability of funding. There will need to be discussions at the sub-regional level to monitor market developments and direct future work programme activities such as the need for demand and capacity modelling as we move forward into the new financial year and the journey to understanding the true cost of care. 

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