Costs of delivering health and social care services

Key messages 

• the cost of delivering social care services continues to increase, with notable regional and sectoral variation 

• workforce costs represent a major proportion of overall social care expenditure 

• low pay and challenging working conditions contribute to recruitment and retention difficulties across the sector 

• public funding has not consistently kept pace with rising costs of care provision 

• detailed cost data is essential for planning and allocating resources within health and social care systems. 

Policy implications 

• funding allocations should reflect the true cost of delivering social care services 

• workforce pay and conditions need to be addressed to support recruitment and retention 

• policymakers may need to consider regional variation when determining funding distribution 

• robust cost data can support evidence-based planning of health and social care services. 

Gaps 

• the report focuses on cost estimates rather than service outcomes 

• limited analysis of how cost pressures affect access to services or care quality 

• further research is needed on how financial pressures influence different population groups. 

Commentary 
This report provides a detailed overview of the financial structure of health and social care services by analysing the unit costs associated with different types of provision. By examining workforce expenses, service delivery costs and regional variation, it highlights the financial pressures facing providers and local authorities. 

Workforce costs emerge as a central driver of rising expenditure. Staffing accounts for a significant share of care costs, meaning that wage levels, recruitment difficulties and staff turnover directly influence the financial sustainability of services. These pressures are particularly visible in domiciliary care, where travel time, fragmented working hours and insecure contracts can make recruitment more difficult. 

The report also draws attention to variation in costs and funding between regions. Differences in local authority budgets, labour markets and service demand contribute to uneven financial conditions for providers. These variations can affect how services are delivered and funded across different areas. 

From a care inequities perspective, the findings highlight how financial pressures can translate into uneven access to services. Where funding does not reflect the real costs of providing care, providers may withdraw from local markets or increase fees for self-funding individuals. This can leave people in some areas facing reduced service availability or higher personal costs, reinforcing disparities in access to care based on geography and financial resources. 

Overall, the report demonstrates the importance of accurate cost data in understanding the financial foundations of the care system. Aligning funding with the real costs of service delivery is an essential step toward reducing financial inequities and ensuring that care services remain sustainable and accessible.