The provisional local government finance settlement for 2025-26 reports making available up to £3.7 billion in “additional funding” for adult social care, although the allocations only show an increase of £880m compared to the current year.
Although this additional funding is welcomed, the proposed changes to employers National Insurance Contributions (ENICs) on top of the welcomed National Living Wage increase from April 2024 as reported in the CPA and Nuffield analysis, are unsustainable for care providers. These changes will magnify the crisis within the sector and push providers to breaking point.
A Bristol based provider outlined what these changes will mean said “the increase in ENICs and minimum wage reduce our revenues, meaning that we will have to hand back local authority contracts, senior staff won’t receive pay rises and the quality of our services will be reduced. It is vital that the government begins to listen to fully understand the severity of these changes.”
Professor Martin Green OBE, Chief Executive of Care England commented:
“Yesterday’s Local Government Settlement highlights the government’s continued failure to prioritise adult social care. While the announcement of additional £880 million funding is welcome, it falls far short of addressing the scale of the crisis. There is a real risk that local authorities, under immense financial pressure, will be left with no choice to divert funds they may have otherwise allocated to social care to other areas. This is not the fault of local authorities who will be forced to make up to £1.4bn of savings in 2025-26 from Adult Social Care Budgets according to the ADASS, but rather a direct consequence of the government’s chronic underfunding of both the adult social care sector and local government budgets.”
Without a commitment to transparency and proper oversight, there is no guarantee that this money will reach frontline care services, leaving the sector in a continued precarious state. The government must ensure there is a sustainable long-term plan to stabilise and grow the sector. If urgent action is not taken, the sector will face widespread contract hand-backs, business closures, and insolvencies. Local authorities will be forced to step in and provide care themselves, something they cannot afford, and which would drive councils across the country to insolvency.
Professor Green continues:
“Every delay, every cut, every ignored plea has real consequences for real people. It’s time for the government to stop turning a blind eye; this is no longer a hypothetical crisis. This is happening right now, and the government must act before it is too late.”
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