Lucy Taylor Diaz, Associate Director at PLMR – an integrated communications agency with a specialist social care team – explores how government commitments are playing out in practice, and what the sector can expect from policymakers in the year ahead.
Social care saw some major policy signals in 2025 that will begin to take effect through 2026 and beyond, but the funding packages to support these shifts have not materialised. For providers, the message is clear: the hard work of adaptation begins now.
In 2025, providers had to work with what they had. The April rise in Employer National Insurance Contributions (eNICs) created an estimated additional £940 million in cost pressure across the sector in 2025–26. For many, this immediately meant difficult decisions about raising fees, reducing staffing, changing service models, or handing back contracts. With local authority fee rates also failing to meet the costs of care, it was yet another reminder that while policy ambition can sound bold, it rarely comes with the resources to match. Announcements such as the forthcoming 10-Year Health Plan, Neighbourhood Health Teams, the Fair Pay Agreement (FPA), and the Casey Commission set a clear direction of travel, but they did little to ease immediate financial constraints. Providers increasingly had to innovate with what they had: deploying technology more smartly, reviewing staffing models, and finding new partners to help deliver care. Those that coped best in 2025 were the ones that didn’t wait for extra funding. They adapted operations early, strengthened workforce engagement, and used data to evidence the true cost of care.
Looking ahead to 2026, employment conditions will move centre stage. The Employment Rights Bill, expected to take effect from April 2026, will introduce several major changes including statutory sick pay from day one of absence and day one rights for unfair dismissal. Providers will need to look beyond pay alone to consider conditions, training, progression, and contracts—all of which will come under increasing scrutiny as part of the upcoming negotiations for the Fair Pay Agreement, due to take effect from 2028 and legally underpinned by the Employment Rights Bill. This change will mark the biggest shift the sector has seen in decades, and 2026 will be the year providers prepare for its arrival. They should not panic, but would be wise to begin forecasting different pay and workforce scenarios and getting comfortable with their data, which will become crucial for evidencing compliance with the new measures as well as supporting employer negotiation representatives.
Providers also continue to flag a disconnect between national ambition and local delivery, a gap not helped by the Care Minister’s lack of engagement with the sector. Policy frameworks speak of integration, workforce reform, and fair pay, while local authority budgets remain stretched, and the Casey Commission’s recommendations on long-term funding reform are not expected until 2028. For policies to work and the sector to remain stable, future reforms need the support of clear, long-term funding packages. Providers are looking to government to prove that they understand the intricacies and complexities of the sector—particularly around plans such as abolishing zero-hours contracts and the lack of funding support for independent providers in the Fair Pay Agreement consultation.
The risks and opportunities are clear. If reform loses momentum, the sector risks being squeezed from both sides, as rising costs and static funding lead to service reductions, staff burnout, and provider exits. But handled well, this moment could also reset the sector for the better. Providers who start now can stay ahead of the curve by tightening operations, investing in workforce development, and building local partnerships. They will be better placed for the Fair Pay Agreement era and for the integrated care landscape that is slowly but surely taking shape.
