The Homecare Association calculates that providers need £34.42 an hour in 2026/27 to pay care workers the National Living Wage for all working time, cover statutory employment costs, travel time and mileage, and run a compliant business.
Meanwhile, English councils are paying an average of £25.05 an hour for the same period, according to the ADASS Spring Survey 2026.
That's a shortfall of £9.37 on every commissioned hour. The £34.42 already prices in April's National Living Wage rise to £12.71 and the higher employer National Insurance that comes with it, and the £25.05 is what councils have set for the same year. So this is the gap after this year's uplifts on both sides, and no further rate increase is scheduled to close it: more than half of councils say they cannot fund any of the additional provider costs from the Employment Rights Act. The provider absorbs the £9.37 on every hour it delivers.
No software closes a gap of that size, but there are smaller costs that providers do control. Taking them out is one of the few moves that doesn't depend on a commissioner's decision.
The costs you can't move
Three costs set the shape of a provider's P&L, and all of them are decided externally:
- the council commissioning rate
- the National Living Wage
- employer National Insurance.
Together they account for most of the cost of delivering an hour of care.
By comparison, the cost of running your own finance operation is mostly time. Keying expense claims, chasing invoice approvals, reconciling card statements and processing reimbursements are internal work, and the hours they take are set by how the work is organised rather than by a commissioner or the Treasury. It's a small number next to the wage bill, but it's one a finance manager can reduce this quarter.
Why the shortfall grows with volume
The gap, the £9.37 shortfall on each commissioned hour, scales with the hours you deliver. Say a branch delivers 2,000 commissioned hours a week. At £9.37 an hour that is roughly £18,700 a week, or close to £975,000 a year, delivered below cost.
Every new package adds to it. For example, a 20-hour-a-week client brings another £187 a week shortfall with it, before anyone has even done the work.
Because the loss grows with every hour, the two usual responses only get you so far. Pushing the council for a rate uplift and growing private-pay work are options to pursue, but neither is in the provider's hands. The commissioner decides the rate on its own timetable, and private demand depends on the local market.
Where the admin time goes
The controllable cost, the time your finance team spends processing transactions, is spread across many small tasks, so it rarely appears as a single line on the P&L. For a multi-branch provider it usually looks like this:
- coordinators and finance staff keying mileage and expense claims from carers across several branches
- invoice approvals waiting in inboxes until someone chases them
- card spend reconciled by hand at month-end
- reimbursements processed in batches, with carers waiting to be repaid.
Across a month these add up to days of finance-team time on work that doesn't need to be manual.
Where a spend management platform can help
Moss takes most of that list off the finance team. Carers submit mileage and expense claims from their phones with receipts attached, so nothing is re-keyed. Company cards carry limits and capture receipts at the point of purchase, so month-end reconciliation is largely done before month-end arrives. At the same time, invoice approvals route to the right approver automatically instead of sitting in an inbox, and reimbursements run as a single payment batch rather than one claim at a time.
Moss doesn't touch the commissioning rate or the wage bill, and the £9.37 gap is exactly as wide after implementation as before. The saving is finance-team time.
What the reclaimed time is for
When your finance team spends less time each month on keying claims and chasing approvals, that capacity can go into the work that does affect the gap: tighter cash forecasting, better-prepared rate negotiations with commissioners, and building the private-pay mix that improves the overall blend. Each of those needs the same finance-team hours that manual processing currently absorbs.
