Lee Peart 27 October 2025

Councils to fund half of increased labour costs under fair pay agreement

Councils to fund half of increased labour costs under fair pay agreement image
© Ink Drop / Shutterstock.com.

Local authorities are projected to fund over half (52%) of increased labour costs passed on by providers as a result of the fair pay agreement for social care, analysis has fund.

An impact assessment carried out by the DHSC found the NHS would cover 17% of the increased labour costs with self-funders paying for almost a third (31%).

The assessment forecasts a 2.8% wage increase in 2028/29 is possible given the £500m made available for additional local authority expenditure, which, on top of the increase in the National Living Wage, would mean a pay uplift of 5.1% between 2027/28 and 2028/29.

The DHSC said that on the basis of current funding an adult social care negotiating body could introduce a pay floor that is 68p above the expected NLW in 2028/29.

Speaking to Healthcare Management this month, Professor Martin, chief executive of Care England, said the policy was ‘completely unfunded'.

‘With only £500m on the table, when the funding gap is over £4bn, it won't touch the sides,' Green said.

Prof Green warned segmenting the funding only to publicly funded care risks deepening disparities between services that already operate on tight margins.

‘Providers with mixed client bases are being asked to find the extra money themselves. It's disingenuous,' he said.

Lee Peart is editor of Hemming Group’s Healthcare Management magazine.

SIGN UP
For your free daily news bulletin
Highways jobs

Senior/Principal Regeneration Officer

Fareham Borough Council
£45,465 - £55,379
Our town centre regeneration is moving from planning to delivery, and we're looking for someone who wants to help make regeneration happen. Fareham, Hampshire
Recuriter: Fareham Borough Council

Lawyer

East Cambridgeshire District Council
£38,510 to £44,253 per annum plus benefits
Are you building your legal career and ready to take on broader responsibility? Ely, Cambridgeshire
Recuriter: East Cambridgeshire District Council

Senior Lawyer

East Cambridgeshire District Council
£47,665 to £51,928 per annum plus benefits
We are looking for a confident and experienced Senior Lawyer Ely, Cambridgeshire
Recuriter: East Cambridgeshire District Council

Senior Practitioner - Children & Young People with Disabilities

Essex County Council
£48205.0000 - £57988.0000 per annum
Senior Practitioner - Children & Young People with Disabilities - Mid EssexPermanent, Full Time£48,205 to £57,988 Per Annum Location
Recuriter: Essex County Council

Neighbourhood Highways Engineer (Northern)

Devon County Council
£46,579 - £50,908 per annum
We are recruiting an experienced and collaborative Neighbourhood Highway Engineer to help keep Devon’s highway network safe, resilient and moving. Taw View, Barnstaple, EX32 2SU or Tiverton Business Park, EX16 6T
Recuriter: Devon County Council
Linkedin Banner