How much have your costs increased since the start of April?

What are you doing to make sure that your care business is financially resilient enough to handle these cost increases?

Read this post to see how to manage these cost rises and read a success story from a care provider who followed my advice and almost tripled one of his fees.

If you have been following my posts then you know that this year they have been focused on preparing for the massive cost rises in April and beyond.

The January post covered how to set your care business on the right course. February’s post outlined what your top priority should be and why and in March’s post I outlined how to make this happen.

I stayed with the subject in April’s post and talked about how important it is for your local authorities and CCGs to know what your cost rises are so that they know their uplift will likely not be enough and to expect providers to be coming to them to talk about fee increases.

In April’s post I also highlighted how one council agreed to a consultation period after pressure from the region’s care association highlighting that their 4.7% uplift wasn’t enough.

The council wanted cost rise forecasts from providers and I helped the association with a workshop where they used my cost forecast tool to forecast their cost rises this year.

Based on the numbers received the council increased their uplift to 5.5%.

They knew from the numbers submitted that it would be half of what was really needed but the exercise achieved two things.

       1. It achieved an increase in the uplift, which was psychologically significant because the council’s spokesperson said they were against the wire and had no money to spare.

       2. It set in the commissioners’ minds what kind of cost rises providers are experiencing and to expect them to be needing client reviews.

Because this council had a better idea of the levels of cost rises and this expectation that providers will need fee increases, I then encouraged care providers in this region to review their costs and current fees based on these higher costs and arrange client reviews if these fees need to be increased.

One care provider came back to me to thank me because that is exactly what he did.

He used our Care Fee Calculator to review one of his client fees.

He had been trying for over a year to get this client’s fee increased but hadn’t been able to put together a convincing enough argument that was based on clear, objective numbers.

Using these tools, this provider was able to show the fee he needed, clearly broken down to show his new costs and the cost of the care the person required.

Presented with a detailed report backed by clear numbers, and the mindset that providers costs are increasing way above any uplift provided, the LA conceded that they didn’t have a counter argument (they didn’t even try to negotiate him down) and agreed to his fee rise request.

His fee has increased from just under £600 to nearly £2100.

This large increase also indicates just how under-funded this provider was for this client over previous years.

What’s key here is that this provider has now set a precedent with the LA. If he presents a strong, number-driven, argument for a fee increase, like he did with this client, then they will struggle to say no.


If he can do it – with an LA that is known for paying less than average – then you can do it too.

It’s never too late to review your costs and fees.

In fact, as we’re still in the first quarter of the financial year, it’s a perfect time to do this now because these costs increases will be hitting you now. You know how much your staff costs have increased as well as National Insurance and other costs like energy and food. And so your forecast can be more accurate.

I know your costs will have increased by a minimum of 10% and more likely around 13%. That’s 13% off your profit.

If you were making say 20% profit margin you are now making around 7%.

If you were returning 30% profit you are now returning around 17%.

These are not healthy enough profit margins to sustain your business.

Anything lower than say 25% and a business becomes financially vulnerable to unexpected events like the pandemic, the war in Ukraine, the credit crunch, inflation, increased interest rates and more – threats that businesses have faced over the decades.

If you don’t increase your fees then you are accepting a loss of profit of around 13%. And this loss will increase as costs continue to rise and will for a long time to come.

But it could be worse. If you haven’t increased your fees in the last couple of years then that is another minimum 10% cost that you have swallowed because of the pandemic, plus a couple of hikes in the NLW. In which case, your loss of profit from then and through this year could easily exceed 25%.

Like I said in April’s post…

These cost rises are too large to ignore and for you to let your customers – your local council and CCG – ignore.



Your Urgent Priority

Take a step back from the day-to-day running of your care home(s) and review your cost rises.

Then review all of your client fees and see how much profit you are making based on your new costs. Then work out what each fee needs to be in order to make at least 25% profit margin.

The Care Fee Calculator will help you review your fees as it did the care provider above.

Please start doing this now because you need to know what these cost increases are doing to your business and whether in fact you are delivering care to some clients for next to no profit or even at a loss.

If you have accurate numbers that clearly show your costs, the individual cost of care (which will have increased because your average hourly rates will have increased) and the fee you need and if you present a detailed argument, as this carer did, then there is no reason why you shouldn’t receive the fee you need to maintain your care business.

Seize the day – don’t let this opportunity pass.

Right now, you have an opportunity to set and receive the fees you need. Ignore it and this time next year you may have run out of money and have had to close.

Please do this now and contact me at if you need any help.

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