Funding


rather than local tax base. Funding should be linked explicitly to


sector specific inflation and workforce cost growth as a minimum floor, with a planning horizon of five years or more to give providers and councils the confidence to recruit, invest in infrastructure, and expand capacity where it is needed most. A reduced rate of VAT for social care


should be developed so that providers can recover the tax on the goods and services essential to delivering care, on the same basis already available to public sector providers, returning meaningful resource directly to the workforce and to services without adding a single pound to local authority budgets. National commissioning standards


should be embedded ahead of the National Care Service to end the variation in practice across 153 local authorities that this report documents, beginning with a targeted programme of support to bring the areas furthest from a sustainable baseline into line, and followed by a binding national framework covering how care is commissioned, including consistent rules on third party top ups and clear protection for families from unexpected charges. Government should agree a single


national model for calculating the cost of care, developed with the sector, to end the divergent local methodologies that currently prevent meaningful comparison between areas and hinder the Treasury’s ability to forecast pressures accurately. Alongside this, government should establish a nationally mandated minimum annual uplift for publicly funded placements, indexed to the National Living Wage, the Consumer Prices Index and sector specific cost pressures, removing the volatility that currently drives provider exits, cross subsidy by self-funders, and market instability. Section 72 of the Care Act 2014 should


be brought into force, giving individuals and families a proportionate and affordable route to challenge commissioning decisions that fail to meet assessed need, in place of judicial review, which remains costly, complex and inaccessible to the great majority of people affected. Finally, the Care Quality Commission


(CQC) should be commissioned to carry out a system level review of the relationship between funding conditions and quality outcomes in care homes, drawing on both quantitative ratings data and qualitative inspection evidence, so that government has the evidence base it currently lacks to


Government


should commit to multi year,


ringfenced funding for adult social care


understand how financial conditions are shaping the care that people across England actually receive.


A crossroads for adult social care A structural funding gap of £2.36bn, widening in every year but one since the government’s own ‘fair cost of care’ benchmark was established, is not a sign of a system under temporary pressure. It is a sign of a funding model that has consistently failed to keep pace with the real cost of delivering care, and whose failure is now large enough to threaten the stability of provision that individuals, families, the NHS, and local authorities all depend upon. That the sector continues to function at


all reflects the commitment of the people working within it, providers absorbing losses they cannot sustain indefinitely, care workers delivering exceptional support under conditions that should not exist, and local authority commissioners attempting to fulfil statutory duties with resources that do not match the obligations those duties impose. That resilience is real, but it is not a funding strategy, and every year in which the gap is not addressed makes the investment required to close it larger, leaves fewer providers capable of delivering it, and leaves families who need care finding the system less able to respond. Baroness Casey’s Commission will be


examining the long-term future of adult social care, and a national conversation about reform is genuinely underway. That process matters, but the creation of this vision cannot be a reason to defer the immediate action any meaningful reform will depend on. The gap between what care costs and what it is funded to deliver is widening now, and the Care England recommendations are designed to begin closing it right away as the precondition for structural reform to succeed rather than a substitute for it. Government faces a straightforward


choice, though not an easy one. It can continue to treat social care as a residual


call on public finances, managing the consequences of underfunding as they arise and accepting that those consequences, for the NHS, for families, for communities that lose provision they cannot replace, and for the people who need care and find the system unable to provide it, as simply the price of inaction. Or it can recognise that the distance between funding gap has reached a point where those consequences are no longer containable, and that a system absorbing a structural deficit of £2.36bn cannot simultaneously be the foundation on which NHS reform, workforce development, and economic growth are built. The question the report poses is not


whether the system is under pressure. That much is beyond dispute. The question is whether government will act before the gap between what care costs and what the system pays becomes impossible to close, and before the social care infrastructure underpinning the country’s wider health and economic ambitions depend upon becomes too diminished to support them. n


Fraser Rickatson


Fraser Rickatson is policy manager at Care England, where he leads the policy team in delivering the organisation’s work. He has particular expertise in funding and system reform and plays a central role in shaping Care England’s policy positions through detailed analysis, member engagement and evidence-based advocacy. Fraser supports parliamentary, ministerial and media engagement, ensuring the voice of independent adult social care providers is heard in national and local policy development. His work focuses on addressing immediate sector pressures while advancing long-term solutions to secure a sustainable, high- quality adult social care system.


October 2026 www.thecarehomeenvironment.com 25


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