The government has announced the social care grant will increase by an additional £200m in 2025/26 on top of the previously planned £680m increase.
The total £880m increase will bring the social care grant to £5.9 billion overall.
At the end of November, deputy Prime Minister Angela Rayner announced there would be an increase to the social care grant by £680m.
However, this week Ms Rayner published the provisional settlement which outlined £69bn worth of funding for councils. This included £3.7bn available for social care authorities to ‘strengthen community care, invest in prevention and give children the best start in life’.
Within this, there will be £880m for the social care grant, and £263m for a new children’s social care prevention grant. This has also been uplifted from its initial estimated funding of £250m, which was also announced at the end of November.
The government also confirmed it will provide local government with £515m of funding to help meet the increased costs of employer national insurance contributions for directly employed staff.
Ms Rayner said: ‘Local leaders are central to our mission to deliver change for hard-working people in every corner of the country through our Plan for Change, and I know our councils are doing everything they can to stay afloat and provide for their communities day in day out.
‘We won’t take the easy option or shy away from the hard work needed to rebuild a more effective and efficient system. These kind of reforms won’t happen overnight, but we are determined to deliver fairer funding, ending postcode lotteries meaning everyone gets the support from public services they deserve.’
Cllr Louise Gittins, chair of the Local Government Association, said the extra funding for councils would help to meet ‘some but not all’ of the pressures they face.
She said: ‘While we are pleased that councils will receive extra social care funding, which will help towards these indirect costs, we continue to worry about the impact the employer national insurance contributions rise will have on the organisations that the sector relies on to deliver vital care and support, especially smaller charities and providers.
‘As we have warned, alongside more than 100 organisations this week, this will exacerbate the already unsustainable pressures facing vital local services.’
Nuffield Trust deputy director of policy, Natasha Curry, added: ‘Even if it all went to adult social care, the extra social care grant funding of £880m and national insurance contributions (NICs) funding of £515m fall well short of the £2bn of additional cost pressures we estimate from the National Living Wage and employer NICs. This figure relates to the share of adult social care paid for by councils. Even the total real terms increase in council spending from all sources is barely enough to just cover these costs.
‘This will mean tough choices for local authorities between increasing fees to social care providers to recognise their costs and spending on other services. It will leave little to meet the gap we know social care faces from rising demand, tackle rising waiting lists or to improve the many other overstretched services for which local authorities are responsible. The government should monitor provider stability closely and be ready to act.’
The government has also launched a consultation on funding reform for 2026-27 and pledged to bring forward a multi-year settlement for next year to provide greater certainty and stability.
It comes after the government’s proposals to expand devolution in England was labelled as an ‘opportunity’ to build healthier communities.
Under the proposals, outlined in the English devolution white paper which was published this week, the government plans to ‘give communities stronger tools to shape the future of their local areas’.
