Councils across England have called for a formal role in negotiations to improve pay and conditions for care workers, warning that local authorities are being asked to shoulder financial risks without having a meaningful say in policy decisions.
The concerns follow the government’s announcement last autumn of £500 million to support its first Fair Pay Agreement for adult social care workers. The funding, due to be allocated to councils from 2028/29, is intended to improve wages and working conditions in the sector. Ministers have suggested the money could support a 3 per cent pay rise, but have only committed to funding the agreement for a single year.
An Adult Social Care Negotiating Body is due to be established later this year to begin talks on pay and terms. However, current plans would give trade unions and care providers a central role, while local government would at best be granted observer status, despite councils commissioning and funding the majority of care services in England.
The County Councils Network (CCN) has argued that this approach is flawed and risks undermining the policy’s success. It says councils, as the largest commissioners of adult social care and the bodies responsible for managing local care markets, should have a full and formal role in negotiations.
Funding Shortfall Fears
New modelling by LaingBuisson, commissioned by the CCN, suggests that implementing a 3 per cent pay rise across the entire social care system including NHS-funded care and private self-funders could cost £853 million a year.
Without full government funding, the analysis warns of a potential £350 million shortfall, which would likely fall on already stretched council budgets. The CCN says this risk will increase if the £500 million allocation proves insufficient by the time the agreement is introduced.
Concerns are also growing over the lack of long-term funding commitments. The CCN warns that unless the government — and future administrations — commit to fully funding Fair Pay Agreements beyond the current Parliament, the policy could have “serious unintended consequences”.
Pressure on Services
Local authorities are already facing intense financial pressure. Recent CCN analysis shows councils are projected to spend £16.5 billion more a year on services by 2028/29 compared with current spending levels, driven largely by rising demand in adult social care.
With limited funding available to absorb additional wage costs, councils warn they may be forced to reduce services or restrict access to care, potentially leading to poorer outcomes for people who rely on support.
There are also fears that some providers could hand contracts back to councils if they cannot afford higher wages, leaving vulnerable individuals without continuity of care. Higher pay rates could also prompt more private self-funders to seek council-funded support sooner, adding further strain to public finances.
If wage increases were set above 3 per cent, the impact would be even greater. LaingBuisson’s modelling indicates that a 5 per cent pay rise could cost nearly £1.5 billion in 2028/29, almost three times the funding currently set aside by government.
Call for Collaboration
Cllr Glen Sanderson, Adult Social Care Spokesperson for the County Councils Network, said the Fair Pay Agreement was a “positive and much-needed policy” for a sector that has long struggled to recruit and retain staff.
However, he warned that excluding councils from negotiations was “incomprehensible”.
“We have a statutory duty to our residents and to manage our care markets, yet we are being asked to shoulder the policy’s risk without having a meaningful say,” he said.
“Unless central government fully funds these pay increases, councils will not be able to absorb the costs involved. We want to collaborate to make Fair Pay Agreements a success, but councils must have a full and formal role in the negotiating body.”
