Councils in the UK have been accused of "buying homecare services for older people on the cheap".
The United Kingdom Homecare Association (UKHCA) said its report "exposes the scale of underfunding" of the sector and is calling on the Government to fund care at a more sustainable level in the forthcoming Budget.
It claims councils in Great Britain and Northern Ireland's Health and Social Care Trusts are "continuing to exploit their dominant purchasing power", leaving many older and disabled people without the support they need to remain independent.
Using data obtained through Freedom of Information requests, it found the average prices paid for homecare in the UK is just £16.12 an hour - almost £2 an hour less than UKHCA's Minimum Price for Homecare of £18.01.
UKHCA, the professional association for homecare providers, said it calculated that the sector needs at least £402 million a year to ensure that homecare workers receive the statutory National Living Wage, while also ensuring that homecare providers can meet their statutory obligations.
This would mean the size of the deficit this year would be £921 million if national governments and local councils were to commit to raising the status of the homecare workforce to at least the independently calculated Real Living Wage.
And neither of these figures account for the additional costs of people currently going without care and support, it said.
More than 850,000 people are supported so they can live independently in the UK, with homecare services making a "major contribution to the well-being and safety of older and disabled people," UKHCA said.
It calculated the average prices paid for care in all of England's nine government regions and in Wales, Scotland and Northern Ireland, and found the South East and South West were the only areas to pay more than its minimum price, at £18.20 an hour.
The figure plummeted to just £13.70 an hour in Northern Ireland.
The lowest paid in England was £14.15 in the North East, followed by £14.60 in the North West.
The average amount paid an hour in Wales was £16.78, while it was £16.54 in Scotland and £15.75 in Greater London.
The report's author, UKHCA policy director Colin Angel, said: "Rates paid by the majority of authorities do not cover adequate wages for our vital homecare workforce and the costs of running safe and effective services.
"These rates also illustrate why homecare providers are increasingly left with no choice but to refuse to take on, or hand back, care to authorities.
"State-funded homecare is also being rationed by councils in a way which leaves many older and disabled people without the support they need to remain independent.
"The governments of each of the four UK nations need to look at our findings and fund care properly. Continuing to muddle on as they have done for a decade is not sustainable."
Ian Hudspeth, chairman of the Local Government Association's Community Wellbeing Board, said: "This is another valuable report showing the unsustainable level of pressure on vital homecare providers that are essential to helping people remain independent at home, as well as getting people out of hospital and back home with their loved ones.
"With people living longer, increases in costs and decreases in funding, adult social care is at breaking point.
"Councils, care providers, charities and the NHS are all united around the need for central government to fully fund adult social care.
"This is essential if we are to move away from just trying to keep people alive to ensuring they can live independent, fulfilling lives, as well as alleviating the pressure on the NHS."
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