Cost of Care Toolkit
.co.uk
Guidance for completing the toolkit
This page gives some helpful hints and tips for ensuring you can make the most out of using the Homecare Cost Toolkit. We have an FAQs page alongside some specific support for analysing your cost breakdown once completed. You can also find the link to the original guidance document here.
Common Error Checking
This page addresses common errors in results that users might experience when calculating unit costs.
Abnormal Unit Costs
If the toolkit is returning abnormal or unexpected unit costs (either too high or too low) in the “Effective Unit Costs p/care hour” cell, there is likely a number of contributing factors. We would recommend checking the following:
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1. Total Business Volume or Apportioned Volume
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Users are free to enter any volumes of care visits and hours for the business they are modelling. Typically this will be done at a whole branch level (i.e. a domiciliary care business delivering to multiple customers, including LA, self-funder, NHS etc.) Sometimes however, users may only be modelling part of the business that relates to a specific customer or volume.
In this case, the “variable” pay costs (all sections from B to G) will reflect cost accurate to the volume specified. However, Sections H to K are fixed costs (typically overheads), and do not automatically vary based on the volume. In this instance, it is up to the user to correctly apportion their own costs for Sections H to K in order to calculate the correct unit cost p/care hour.
EXAMPLE
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A business delivers 50% of its volume of care hours to council #1 and 50% to council #2, at a rate of 500 hours per week each. The total business volume is 1,000 hours per week.
The user has only submitted volumes in the toolkit for council #1, and therefore is only showing 500 hours / week variable costs for a business that generates 1,000 hours per week in total.
The user has then entered the cost for a full time registered manager (in Section H) at £40,000 per year, however the registered manager is responsible for the entire volume of 1,000 hours per week, not just the volume for council #1 represented in the model.
In this instance, 100% of the registered manager’s cost has been applied to only half of the total volume of hours delivered by the business, which will artificially inflate the unit cost.
CELL TO CHECK: All volumes in Section A Care Hours and Visit Breakdown, and all overhead costs in Sections H to K.
SOLUTION: Check the volume of care hours delivered represents the entire branch, or part of the branch. Then check the apportionment of overheads is equal to the same portion of volume of costs incurred by the entire branch, which is represented in the model. The simplest way to ensure accuracy is to model a single branch/business as one entity, and not exclude provision based on customer type.​
2. Average Visit Lengths​
If the average visit length is low (i.e. 15 mins or less) AND the user has entered pay costs for travel time, then the unit cost per care hour will be high, as travel is applied as the same cost to each visit, regardless of visit length. This has the effect of impacting lower average visit lengths more than longer average visit lengths.
The opposite is also true, where long average visit length (over 1 hour) will impact less on total travel costs to the organisation and therefore will have the effect of reducing the average unit cost p/care hour.
CELL TO CHECK: D27 in Section A
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SOLUTION: Check the average visit length is representative of the total blend of annual visits across the organisation, as well as checking the travel time is paid at a fixed rate per hour of travel.​
3. Travel Time​
If average travel time is high, then the pay cost attributed to each visit will be increased. Average travel times as a % of average visit lengths have a high impact on unit costs.
For example, an average travel time of 20 mins against an average visit time of 20 mins = 100% of time spent in travel compared to visit time across the volume of care hours input to the spreadsheet. In essence, this means pay costs are doubled (x2) for every hour of care time delivered.
CELL TO CHECK: Travel costs table in Section B
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SOLUTION: Check travel time per visit is an average across the entire volume of visits and not just for a specific cohort of visits which require abnormally large (or small) time spent in travel (i.e. typically access in remote areas).​
4. Branch Capacity​
The ‘Branch Capacity’ calculator in Section C multiples all overheads (in Sections H, I and J) by the number of branches required as denoted in the table on the right (screenshot below) – cell K53 in the toolkit.
If the user is calculating the costs for one branch, then this figure should be equal to 1. If this cell is not equal to one, then a multiplier of the volume indicator (either service users, weekly/monthly contact hours or visits) will be used to determine the number of branches and the associated overhead cost for this (i.e. multiple instances of registered manager, back office staff, rent, IT costs, insurance etc. will be applied).
CELL TO CHECK: Branch Capacity “total branches required” cell K53 in Section C. In the example below, the total volume is for one branch, however the user has erroneously entered ‘5’ as the volume indicator for one branch in the Branch Capacity table. This is incorrect, as the user had already modelled the cost for the total branch at 70 service users, and so should have reflected the same figure in the branch capacity table on the right.
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SOLUTION: Check the volume indicator is equal to the same figure for one branch (i.e. ‘5’ should instead be ‘70’ in the table example above).
5. Training and Supervision Days​
Training and supervision days are multiplied per staff member by 7.5 hrs (FTE Day), to give an annualised cost for all staff at the number of days required. Sometimes users may enter the total number of training and supervision days provided to all staff (rather than the average for each staff member), which would result in an abnormally high figure.
CELL TO CHECK: Training and Supervision Days cell D105 in Section F
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SOLUTION: Check training and supervision days are per staff member, and not the total for all staff in the organisation (as this is already calculated in the model as multiplied by the number of staff in Section G).
6. Overhead Costs​
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In the Overheads Sections I and J, users have the ability to change the period multiplier (column E) if the £ / period is different to an annualised cost, which can sometimes result in errors. In the example below, the user has entered £10,000 for recruitment and DBS costs, intended as the annual spend against this cost line. However the ‘Period’ in column E is set to monthly, and therefore the toolkit has multiplied this overhead cost by x12 , therefore giving a total annual spend in column F of £120,000.
This has erroneously inflated the value for this cost line.
CELL TO CHECK: Columns E and F in Sections I and J
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SOLUTION: Check the correct £/Period & ‘Period’ multiplier has been applied for each non-pay cost line.
7. Employer's NI Costs
it is possible in some cases to get a negative or incorrect result on the cost template with the Employer’s NI formula currently, where the average per staff cost is below the Employer’s NI threshold. If this does not reflect an accurate ENI figure for your organisation, please follow the steps below to ensure this is appropriately included.
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If you have received a negative or incorrect Employer's NI value, it is likely to do with the following:
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The number of care staff is high, resulting in low average annual costs per employee
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The Employer's NI threshold (£) is above the average earnings per employee, resulting in the ENI costs not being applied correctly
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We urge all users to check the values for these two figures. The table below shows where these figures are contained in Section G of the model.
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There are some solutions to this issue, depending on which figures the user needs to change.
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Check #1. Check Employer's NI threshold
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The Employer's NI Threshold should represent the threshold for tax purposes for the tax year you are modelling. If any other values are input into this cell, it may not represent an accurate ENI £/annum cost.
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For details of current tax thresholds, please see the UK government website below:
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Check #2. Add additional Employer's NI cost to Overheads
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If the total Employer's NI is still incorrect, after checking the above value, then you may either add the value back in using a spare row in the Overheads section; or add the additional balance to this, see below:
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Section G in the example below shows ENI value of -£2,975.
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The user has updated Section J with the value to ensure the cost is counted as neutral (see below row ‘Employer’s NI balance’). Please note the user may also need to add additional costs for Employer's NI, for direct care staff only, if the total value is still incorrect.
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Back office staff costs should calculate accurately, as long as the correct ENI threshold and ENI liability % has been applied in Section G.
