Fair Fees, Sustainable Care: Norfolk Care Association’s Input into the 2025 Fee Review

Norfolk Care Association provides input into Norfolk County Council’s fee review process each year. We recently presented a summary of provider feedback to Norfolk County Council Adult social care leadership team. A copy of the presentation is included below.

Rate rises of 13-36% needed to meet current fair cost of care estimates and ensure high quality sustainable care.

The low level of fees is the most significant issue raised by all provider types, and different types of providers highlight particular issues. In home care for example, the hourly rate for hands on care must also cover all wider delivery costs. Therefore, changes to how hours are commissioned, the amount of non-client contact time required to deliver care (for example updating records or travel), and invoicing practice have significant knock-on effects.

Providers also emphasise that changes to commissioning models have reduced certainty over client numbers, and that this added risk needs to be reflected in fee levels. Providers also cite the impact of the cumulative effect of multiple years where fee increases have not kept pace with cost rises.

Fair fees are fundamental to the delivery of high-quality care and current fee rates do not reflect a fair cost of care. Our modelling suggests an increase of between 13% and 36% in fees – depending on provider type – is needed to align current payments with the fair cost of care rates calculated in 2022.

We need a comprehensive, co-owned, and sector-wide true cost of care model to accurately reflect provider costs.

Since that exercise, the cost base for providers has increased. Providers particular highlight the rise in national insurance contributions, increased mandatory training requirements, costs of adopting new digital systems and of meeting increased regulatory requirements. This is alongside general cost inflation, and specific cost pressures such as energy prices and higher interest rates, which are felt particularly by certain provider types.

As a result, Norfolk Care Association is calling for a comprehensive, co-owned and sector-wide true cost of care model to accurately reflect provider costs.

Norfolk County Council has underestimated the workforce percentage of total care costs. This needs to be revised with full transparency on the rates used.

The current fee increases model uses staff to non-staff cost ratios between 65:35 and 71:29 per provider type – Norfolk County Council is not transparent about the exact ratios used for each provider type. The Local Government Association and some other councils use a 70:30 split across all provider types. Provider engagement has repeatedly shown rates ranging from 67:33 to 80:20. Our view is that Norfolk County Council has been underestimating the ratio of staff costs to non-staff costs for several years and should update these and be transparent in their modelling.

With a number of high-profile closures and an average 12% increase in providers considering leaving the market, there is a sense care supply is at a tipping point.

The Norfolk County Council led pulse check survey highlighted an average increase of 12% in providers considering leaving the market.

Early indications from Q4 sector insights show that providers are 60% less optimistic than they were 6 months ago. When asked what actions they are likely to take in the next 12 months; 5% said they would exit the market, ad 23% said they’d exit a public sector contract.

In the 12 months to June 2025, 22 CQC-registered locations in Norfolk were closed. The cumulative financial impacts and increased provider sentiment of desperation is suggestive of care supply of at a tipping point.

Norfolk County Council needs to make public its sufficiency estimates and establish a clear, equitable package of pro-active support to enable provider stabilisation.

Recruitment concerns are rising with providers.

Insights from provider conversations suggest recruitment and retention concern is rising. Early indications from our Q4 sector insight survey shows that 44% of providers are highlighting recruitment and retention as having a high or significant impact in their ability to deliver care, up from 37% in Q3.

Our data analysis suggests that Norfolk lags behind England and the East of England in reducing its vacancy rates, and we are yet to return to pre-covid levels. Vacancy rates vary significantly across the sector, but rates are particularly high in home care. This is concerning given the strategic direction of wanting to support more people in their own home.

There are some indications that restrictions to international recruitment that directly impact circa 150 sponsorship license holders are also having spill-over effects on other providers.

Low care fee rates perpetuate lower pay which harms recruitment competitiveness, staff wellbeing and career development. Providers highlight concerns around the increase in NI as well as potential impact of the employment rights bill and fair pay agreement. Provider ability to support staff remuneration through the fee uplift will be critical in ensuring staffing needs, and therefore care needs, can be met.

Investment and innovation requirements need to be considered as part of the fee review process. Consideration should be given to grants and low-cost finance options.

Providers are reporting curbing investment as an increasingly key method of addressing cost pressures. A number of closures appear to be driven by an inability to invest in upgrading infrastructure. A period of higher interest rates has made investment even more costly.

Investment is critical in both maintaining care quality and supporting innovation. Previous lower than required fee increases will have reduced providers ability to invest. The fee review process does not adequately assess provider’s investment needs, the impact of depreciation, increases in standards, innovation needs, and maintenance.

Norfolk County Council must explore options to ensure appropriate investment is available to providers. This should include consideration of grant funding and soft loans to support capital investment, technology and innovation. Norfolk County Council should ensure more providers benefit directly from funding initiatives such as the Better Care Fund.

Norfolk County Council policy ambiguity as well as specific policy choices negatively impact care providers sustainability.

Providers highlight that a lack of clarity on Norfolk County Council’s strategy is harming providers ability to plan and invest. Providers express sentiment that they have a lack of trust in Norfolk County Council as a strategic partner. There is significant feedback that Norfolk County Council’s policy choices, particularly in home care, are driving smaller providers out of business. Norfolk County Council needs to improve its strategic clarity and communication. Norfolk County Council needs to be clear about the economic impact of its policy decisions and openly assess provider impact.

Payment and assessment delays harm provider cashflows and increase costs, adding to financial and quality pressures.

Providers repeatedly and strongly highlight concerns around delays in payments, assessments being reviewed, and in the ability to get timely responses from Norfolk County Council.

We believe that payment delays are largely the result in agreed care packages not being processed effectively by Norfolk County Council. Cashflow is the most critical factor for many small businesses, and this ineffective processing is having a direct negative impact on provider sustainability.

Norfolk County Council has highlighted that a relationship approach is key to its strategic ambitions. We are welcoming of this approach, and providers ask for named contacts that they can build relationships with.

It must be underlined that a positive relationship with providers can only be achieved when effective and efficient day to day processes are in place.