Nicola’s Blog – The Local Government Settlement: What It Means for Adult Social Care Providers
The 2026 Local Government Settlement: What It Means for Adult Social Care Providers
The 2026 local government finance settlement offers councils greater certainty through a multi-year funding framework, but for independent adult social care the underlying financial pressures remain largely unresolved.
Adult social care already accounts for the largest single proportion of spend in County Councils. Demand continues to rise due to an ageing population and increasingly complex needs among working-age adults. For councils, this means difficult trade-offs. For independent social care providers, it translates into ongoing financial strain.
Providers are facing rapidly rising costs, in particular from workforce pressures, National Living Wage increases, inflation, energy prices, the forthcoming Employment Rights Act and recruitment challenges. Yet fee rate uplifts from commissioners often lag behind these cost increases, squeezing already thin margins and undermining long-term sustainability for those care providers who deliver local authority commissioned care.
While a multi-year settlement helps with planning, it does not on its own address the structural gap between the true cost of care and what councils can afford or are prepared to pay. Without funding that keeps pace with demand and workforce costs, provider markets will remain fragile. This could limit choice, quality and continuity of care for people who rely on these services.
Trade associations have a vital role in this context: championing fair and timely fee uplifts, highlighting the real costs of care delivery to local authorities, local members and MPs, and pressing for long-term reform that supports a stable, skilled workforce and sustainable care markets. At Surrey Care Association we are rolling out several sessions in 2026 led by industry experts to support our members with the challenges that they face. As always, we welcome ongoing member feedback on what they would like to see us deliver to maximise value.
Although the multi-year settlement might offer some certainty compared to single-year settlements, the scale of additional grant funding for social care relative to rising demand remains a significant challenge. Without stronger long-term funding commitments for both councils and providers, financial fragility may worsen, impairing the sector’s ability to invest in quality improvements and innovation to support our most vulnerable residents.
Until next time,
Nicola
CEO, Surrey Care Association