The cost of running a care home

July 20, 2022

The care home sector has been under immense pressure in the last few years, with Covid-19, staff shortages, and the rising cost of living making it increasingly difficult to make ends meet.

Care providers face the challenge of finding ways to reduce their costs, while at the same time maintaining a high standard of care and meeting strict regulatory requirements.

If you’re new to running a care home business or charity, you’ll need to make sure you understand the various costs involved, and factor each of these into your financial plans.

We’ve set out some of the main costs to think about.


If you’re starting a care home for the first time, your premises will be your largest initial cost. This can vary, though, based on the size and location of the building, and whether any refurbishments and renovations are required.

The layout of the building will have a big impact on the staffing requirements as well as the culture of the home, so it is important to consider this before committing to any purchase or development work.

The building will need to meet requirements set by the Care Quality Commission (CQC), so you’ll need to assess whether any changes need to be made.

Staff and training

Another significant cost, and perhaps the most important one to manage, is your staffing bill.

As well as the nurses and carers who will be essential to your service, you’ll need to employ management, administrative, housekeeping, maintenance, and catering staff.

Under the Health and Social Care Act (2008), you have an obligation to “provide sufficient numbers of suitably qualified, competent, skilled and experienced staff to meet the needs of the people using the service at all times”.

You’ll need to plan your team’s hours to make sure you’re providing a safe and effective service to your residents, while at the same time avoiding overspending.

Average nurse wages reportedly stood at £17.38 per hour in 2021, up 2.9% from the year before, while average carer wages per hour increased by 5.4%, to £9.23. Increases to the national minimum wage are also likely to place upward pressure on staffing costs.

Recruitment and retention problems have created a real challenge for many care homes as a result of the Covid pandemic, as more providers are relying on agency staff to cover absences – the costs for which have surged.

You should also factor in the cost of training for new staff, and continued professional development for your team.


Utility bills will also make up a large portion of your care home’s overheads, with heating, lighting and water – as well as electrical equipment like TVs, laundry, and adjustable beds – in heavy demand.

This cost has also increased as a result of soaring energy costs, making it especially important to plan for future rises.

Other costs

There are various other costs to factor in beyond these three, including specialist health and mobility equipment for your residents, repairs and maintenance to the property, administration and advertising, and so on.

It’s worth taking the time to assess all of these costs realistically, to make your budget as accurate as possible.

Talk to us

At JCS, we offer specialist advice on accounting for care home businesses and charities, based on our years of experience working with the sector.

We can help you assess your costs, put a budget in place, and make plans for the future.

Get in touch to find out more.

Ready to talk?

Dick Haffenden JCS

Then we’re ready to listen.

Tell us about yourself, your goals and what you need to achieve them and one of our team of friendly accountants will be in touch to begin the conversation.

020 8643 1166

jcs Accountants

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