Government launches social care “fair pay” agreement process.
In September 2025 the Department of Health announced a major £500 million investment in the first-ever fair pay agreement for adult social care, with a new negotiating body to be set up for employers and unions. This agreement (backed by legislation in the Employment Rights Bill) will allow sector-wide collective bargaining on pay and conditions. A public consultation on the process was launched 30 Sept 2025 (closing 16 Jan 2026). The government aims to have the first fair pay agreement in force by 2028, following negotiations in 2027.
Regulatory/operational impact: This is a workforce policy, not a change to CQC standards, but it will significantly affect provider finances and staffing models. The increased funding and legal framework mean most care workers can expect higher wages and possibly new contractual terms. Providers must prepare for rising labour costs, which may need to be passed to local authority or private funders through fee negotiations.
Key actions for providers:
- Keep abreast of the ongoing consultation and legislative timetable for the Adult Social Care Negotiating Body. Engage via sector associations if possible to influence details (e.g. scope, timelines).
- Review your pay scales and budgets in anticipation of likely wage increases. Consider how higher labour costs will be funded (council fees, self-funders, NHS uplifts) as indicated by the consultation Impact Assessment.
- Plan ahead for stronger union involvement. If the agreement proceeds, unions will have formal roles in setting pay/terms – providers should ensure open communication and robust HR practices.
- Work with commissioners (NHS, councils) to align on funding for improved pay, and watch for related policies (e.g. social care fee uplifts).
In summary, the new fair pay agreement represents a transformational change to workforce governance. Providers should adapt business plans to accommodate it, balancing new obligations with the goal of attracting and retaining staff.