What open-book means when a council asks for your costs
Open-book is the commissioner asking to look behind your price. Instead of taking your hourly rate as a flat number, they want to see what sits inside it: how much is carer pay, how much is employer National Insurance and pension, how much is travel, holiday and training, and how much, if anything, is left as surplus. The phrase comes from procurement rather than accounting, and in a care contract it almost always means a cost-per-hour breakdown you hand over on a set template or at an agreed review, not your full ledger.
The reason it feels uncomfortable is that most owners have never been asked to show the surplus line to the organisation that sets the rate. The instinct is to resist. The better move is to treat it as a structured disclosure you control: you decide the format, you agree what is confidential, and you present a clean build-up rather than letting someone rummage through the books. Done that way, open-book usually helps a sustainable provider, because it shows that the rate being paid does not actually cover the cost of safe staffing.
This guide is written by LOYALS, a King's Cross firm of accountants and business consultants that runs the finance function for care agencies across London, so the framing is the decision an owner has to make the week a commissioner emails asking for costs, not the procurement textbook. The first place to look is never your own accounts. It is the contract or the request itself, because that wording is what fixes the scope, and our care agency accounting team starts every open-book job by reading it line by line.
Which records a commissioner can actually ask to see
There is a limit to what a public body can reasonably demand, and it is worth knowing before you say yes to everything. The government's guidance on assessing and monitoring a supplier's economic and financial standing sets out the records an authority can ask for, and it is a defined list rather than an open door. It can ask for your latest filed accounts, recent management accounts, cash flow forecasts, bank statements or references, and evidence of your funding and order book. It explicitly cannot require audited accounts from a company that is not required to have an audit under the Companies Act.
Just as important, the same guidance says anything you give that is not already public must be treated as confidential and used solely to assess your standing on that procurement. That one line is your protection, and it is worth quoting back to a commissioner who asks for more than the contract needs. The table below maps the common requests to what the council is really testing, so you can tell a fair question from an overreach before you reply. Our management accounts team prepares this pack for care clients so the figures tie back to the filed accounts.
What a commissioner can reasonably ask for under open-book terms, and what each item is really testing:
| What they ask for | Why they want it | What you are really disclosing |
|---|---|---|
| Latest filed accounts | Confirm the business is solvent and real | Already public at Companies House |
| Recent management accounts | Check current trading, not last year's | Current profit and overheads |
| Cost per care hour build-up | See whether the rate covers safe staffing | Wage, on-costs, travel and surplus |
| Cash flow forecast | Confirm you can fund payroll across the contract | Timing of money in and out |
| Bank facilities and headroom | Judge resilience if a payment is late | Borrowing and available funding |
Where the money in an open-book care hour goes
The heart of any open-book request is the build-up of one hour. This is where owners either make their case or lose it, because a rate that looks generous on paper is mostly gone before any surplus appears. Carer pay has to cover contact time, travel time between calls and training time, not just the minutes at a client's door. On top of that sit employer National Insurance, the minimum pension contribution, holiday pay, mileage, recruitment and the cost of running an office that meets regulatory requirements.
The illustration below breaks a sample hour down. It uses the National Living Wage of 12.71 pounds an hour from 1 April 2026 as the floor for carer pay, adds employer National Insurance at 15 percent above the 5,000 pound secondary threshold and the 3 percent minimum pension contribution, and shows what is left. The figures are illustrative, but the shape is real: the wage and its direct on-costs swallow most of the hour, and the surplus is the thinnest slice, not the fat one a council might assume.
When you present this to a commissioner, lead with the wage line and its on-costs rather than the surplus. It reframes the conversation from "how much are you making" to "here is what safe care actually costs", which is the honest and the stronger position. The Homecare Association, the sector body, builds its minimum price for homecare on the same logic and has reported that a large share of public bodies still pay below the cost of employing carers at the minimum wage, a figure worth having to hand when you open the discussion.
Do you have to reveal your margin, and can it be used against you?
This is the question owners actually lose sleep over, and the honest answer is that open-book usually does expect the full build-up of an hour, including the surplus. Hiding it tends to backfire, because a commissioner who cannot see any surplus assumes you are either loss-making, which worries them, or concealing it, which annoys them. A clear, modest surplus line is a sign of a provider who will still be trading next year, which is exactly what a council wants from a care contract.
What you can and should control is how it is framed and how it is protected. Disclose the surplus as a single line in the hourly build-up, not as a doorway into your whole pricing model, your supplier terms or your margins on private clients. Government guidance accepts that reluctance to share genuinely price-sensitive information is legitimate and expects authorities to weigh that against their need to know. So the position we take for care clients is simple: share the cost per hour in full, mark it commercially confidential, and decline politely where a request goes wider than the contract requires. If a council later tries to use your disclosed surplus to justify cutting the rate, the same build-up that shows your surplus also shows how little room there is before the rate stops covering safe pay. The exposure maths here is close cousin to the one in our guide to pricing the risk in a council care indemnity, where the same discipline of modelling before you commit applies.
Is open-book even a legal requirement?
It helps to know that open-book in care is almost never a statutory duty. Under the Procurement Act 2023, the transparency rule people reach for is the one requiring published key performance indicators, and that only applies to contracts worth more than 5 million pounds and specifically excludes light touch contracts. Most social care sits inside the light touch regime, which is the lighter set of rules the Act keeps for health, social and similar services, so even the Act's own transparency duties are relaxed for the contracts you are likely to hold.
That matters because it tells you where the obligation really comes from. Open-book in a care contract is a term the commissioner has written into the agreement, not a rule in the legislation, which means the contract wording is the whole of your obligation. There is no national standard for what "open-book" covers, so two councils can mean very different things by the same word. The practical consequence: read the clause, and if it is vague, pin down the scope in writing before you disclose, rather than assuming the broadest reading. The one point worth confirming with the commissioner, because it is genuinely not fixed by any rule, is how often you will have to refresh the figures and in what format, as ongoing monitoring during a contract is set entirely by its terms.
Who signs off before a figure leaves your business
Once you know what to disclose, the last risk is a draft figure reaching a commissioner by accident, which happens more often than you would think when several people touch the pack. The fix is a short approval chain with one named owner. The director or finance lead owns the pack and confirms the numbers are current and consistent with the filed accounts. Your accountant checks the cost model and the confidentiality wording. Nothing goes out until both have signed the exact version that will be sent, so there is never a question of which draft the council is holding.
A simple sign-off chain so no draft figure leaves the business by accident:
| Figure or document | Who prepares it | Who signs it off |
|---|---|---|
| Cost per care hour build-up | Finance lead with your accountant | Director, against the filed accounts |
| Management accounts extract | Your accountant | Director or finance lead |
| Confidentiality wording | Your accountant or solicitor | Director |
| The final pack that is sent | Finance lead | Director and accountant together |
Open-book disclosure checklist
Work through this before you reply to the commissioner. It is the sequence we use for care clients.
- Read the contract or request and write down exactly what "open-book" is defined to cover.
- Agree the confidential scope in writing, quoting the rule that non-public information is used only to assess that procurement.
- Build one clear cost per care hour: wages for contact, travel and training time, employer National Insurance, pension, holiday, travel and running costs, then surplus.
- Tie every figure back to your filed accounts and latest management accounts so the numbers are consistent.
- Label every page that is not already public as commercially confidential.
- Disclose at the level the contract needs, and decline politely where a request goes wider.
- Confirm in writing how often figures must be refreshed and in what format.
- Get the director and your accountant to sign the exact version before it is sent.
Open-book requests tend to arrive at the worst moment, in the middle of a bid or a contract review, when your finance person is already stretched. This is the sort of task a specialist care agency finance team takes off your desk: we build the cost model, agree the confidential scope, and hand you a pack that is ready to send, so a commissioner's deadline does not become another late night. It is one part of the wider outsourced finance function we run for agencies once the office can no longer carry the numbers alone.