The Adult Social Care Finance Report for 2024-25, published by the Department of Health and Social Care, shows that income from client contributions rose by 14% (£0.6 billion) compared with 2023-24, accounting for 48% of total local authority income. By contrast, income from the NHS increased by just 4% over the same period. Overall, external income for adult social care rose 8% to £9.7 billion.
The figures highlight growing financial pressure on the sector, with gross current expenditure reaching £29.4 billion in 2024-25 – a 9% (£2.3 billion) increase on the previous year. Around 80% (£23.6 billion) of this spending went towards long-term support, including residential, nursing, and community care, representing a 10% (£2.2 billion) year-on-year rise.
Rising costs for care providers further compound pressures. The average weekly cost of residential or nursing care increased by 7% to £1,185.55, while the average cost of an hour of externally-provided home care rose 7% to £23.56. Regional disparities remain significant, with London recording the highest weekly costs at £1,309, compared with £1,012 per week in the North East.
For residents aged 65 and over receiving long-term care, client contributions now make up a substantial 73% (£3.5 billion) of external income. Meanwhile, net current expenditure funded by local authorities via council tax, business rates, and central government grants totalled £24.7 billion, accounting for 72% of total spending.
Total public spending on adult social care, including Better Care Fund contributions, reached an estimated £27.8 billion, highlighting the ongoing challenge of meeting rising demand while maintaining quality of care. The Healthcare Foundation predicts that local authorities will need an additional £3.4 billion by 2028-29 to meet service demand and inflation-related costs.
Further pressures are anticipated with the introduction of the sector’s first “fair pay agreement” in 2028-29. The agreement will establish an Adult Social Care Negotiating Body, comprising employer and union representatives, to set employment terms and workplace conditions. While the government has allocated £500 million to fund this initiative, industry organisations argue that this is insufficient and will limit resources available for other urgent care needs.
The full Adult Social Care Finance Report, England: 2024 to 2025 is available at www.gov.uk.
