Cost of Care Reports – Care Homes and Home Care (Annex B)

Cost of Care Reports – Care Homes and Home Care

In September 2021 the government announced a reform of the adult social care system from October 2023. 

Linked to these reforms was a requirement for local authorities to submit to the Department of Health and Social Care (DHSC) by 14th October 2022 (with final version of the Market Sustainability Plan published by 27th March 2023): 

  •  A cost of care exercise – produced by surveying local providers for 65+ residential and nursing care and 18+ homecare to determine a sustainable fee rate for different care settings. Exercises will need to accurately reflect local costs such as staff pay and travel time, and provide for an appropriate return on capital or return on operations.


  •  A provisional market sustainability plan setting out local strategy for the next 3 years (2022 to 2025) – using the cost of care exercise as a key input, this provisional plan will demonstrate the pace at which local authorities intend to move towards a sustainable fee rate, in particular taking account of the impact of section 18(3) of the Care Act 2014 as well as other pressures they have identified. Strategic planning for changes in types of provision in response to local need with other local areas, taking into consideration the role of new models of care (including housing). The attached document is now the final version.

The Council submitted in October 2022 the documents required by DHSC summarising the outcome of the "cost of care" exercise, including an overview of the outcome, process and how and to what extent this information will be used. 

Since submission of the documentation, the government have announced the postponement of adult social care charging reforms (the care cost cap, extension of the means test and others) to October 2025 at the earliest.  This delay removes one of the key drivers of the cost of care exercise i.e. the removal of different fee rates for self-funders. The Government's expectation was that the survey would provide an indication of the extent to which fees paid by local authorities might need to rise as this change took effect, to minimise the impact on care home operators. 

The DHSC were to review the submitted documents before publication however, following the government’s decision to postpone the planned adult social care reforms, local authorities now need to publish the results of this exercise, without waiting for formal DHSC approval, by 1st February 2023, specifically the ‘Annex B’ documentation. 

The ‘Annex B’ documentation comprises two separate ‘Cost of Care’ reports (one each for Care Homes for older people and Home Care for adults aged 18 and over). Their content is prescribed by the DHSC and includes: how the cost of care exercises were carried out; how providers were engaged; the lower quartile, median and upper quartile for costs collected; how the resulting ‘cost of care’ for the local area has been determined, including the approach taken for return on capital and return on operations. 

Both submitted Cost of Care Reports for Hartlepool (i.e. Care Home and Home Care) are published in the link below. 

If you have queries about either of the published documents, please contact

Hartlepool Borough Council - Annex B - Care Homes

Hartlepool Borough Council - Annex B - Home Care

Hartlepool Borough Council - Annex C MSP