For UK social care providers
Your fees have stayed flat while your costs have not
Energy, staffing, food, and insurance have all risen sharply. Without a structured fee review, the gap between what you charge and what it costs to deliver good care widens every month.
Two minutes. Solva follows up with specific fee review and increase programme options.
- Cash flow problems and delayed payments to suppliers
- Difficulty in recruiting and retaining qualified staff due to uncompetitive wages
- Underinvestment in facility maintenance, upgrades, and staff training
- Increased reliance on agency staff, further driving up costs.
- Reduced ability to invest in staff training and development, impacting care quality
- Increased staff turnover and recruitment challenges due to uncompetitive pay
- Reduced profitability and potential for business failure, impacting continuity of care
- Inability to secure financing for expansion or improvements, hindering growth
- Negative perception from prospective residents and families regarding care quality and financial stability
- Difficulty in attracting and retaining high-quality staff, impacting service delivery
- The structural tension between rising operational costs (staffing, energy, food, insurance) and a reluctance to increase fees due to fear of losing residents or local authority contracts is a primary root cause.
- Behaviourally, many care home operators lack a systematic approach to fee review, cost modelling, and market benchmarking.
- Systemically, the disparity between local authority funded rates and private pay rates creates pressure on providers to cross-subsidise, leading to underpriced services for private payers.
The average weekly fee for a residential care home bed in the UK increased by 19% to £949 per week in 2023/24 compared to 2021/22, while nursing home fees rose by 18% to £1,267 per week over the same period (LaingBuisson, 2024)
How to fix it
Conduct a full cost-per-bed analysis including all direct and overhead costs. Benchmark your fees against local competitors using CQC data and LaingBuisson fee surveys. Develop a fee increase strategy that phases increases over 12 months, communicates the rationale to families, and differentiates on quality rather than competing on price.
Frequently asked questions
Why does this problem persist?
Social care providers face a structural tension between cost inflation - energy, staffing, food, insurance - and reluctance to increase fees for fear of losing residents or LA contracts. Without a systematic approach to fee review, cost modelling, and market benchmarking, many care homes drift into loss-making territory without realising it until cash flow becomes critical.
What is the cost of leaving it unaddressed?
A 40-bed care home at 90% occupancy charging £1,100/week when the market rate is £1,250/week loses £280,000 in annual revenue. A structured fee review and increase programme can recover this without losing occupancy if communicated correctly (LaingBuisson, 2024)
This is exactly what I do with UK private practices. Answer the few questions above and I'll come back personally with where to start. Paul.