The money
ADASS surveyed directors in all 153 English councils with social care duties and received 136 returns (89%). It now adjusts its national estimates for population, so some figures are not directly comparable with earlier years.
- Budgets: councils budgeted £25.7 billion for adult social care in 2026/27, up from £22.6 billion in 2025/26. That is 37.9% of councils' total net budgets.
- Overspend: £715 million in 2025/26, 3.2% of the net budget. Four in five councils (80%) overspent.
- Savings: directors plan £909 million of adult social care savings in 2026/27.
- Precept: 142 of 153 councils used the full 2% adult social care precept in 2026/27, down from 147 the year before. ADASS, citing government figures, says it will raise £688 million.
- Emergency support: 32 councils with social care duties, about one in five, were given Exceptional Financial Support to balance their 2026/27 budgets.
Fees: what councils pay
ADASS found that councils' average composite hourly rate for homecare rose from £23.85 in 2025/26 to £25.05 in 2026/27, a 5% increase. The Homecare Association's recommended minimum price for 2026/27 is £34.42 an hour. ADASS itself cautions that averages hide block contracts, volume guarantees and other local arrangements.
The survey does not give an equivalent average rate for care home placements.
Who is leaving the market, and why
- Closures and hand-backs: 66% of councils saw providers close, cease trading or hand back contracts in the six months to spring 2026, up from 56% a year earlier. In total, 3,964 people were directly affected.
- By service: 37% of councils saw this among residential and nursing providers, and 33% among supported living and extra care providers.
- Why: providers' unwillingness to accept council terms, such as proposed fee levels, was a "large" influence for 16% of directors and "some" influence for 41%. Revoked sponsor licences were a large factor for 9%.
- Employment costs: 89% of directors had worked with providers to understand the cost of the Employment Rights Act 2025. But 54% said they could not fund those extra costs at all, and only 4% said they could largely fund them.
Self-funders and nursing care
Half of directors said providers were, to some extent, reducing the residential care available to councils for over-65s in favour of self-funders, and 7% said this was happening to a large extent. In nursing care for over-65s, 54% reported an impact on public capacity. Directors' full confidence that they can meet the nursing care needs of older people locally falls from 47% this year to 28% over three years.
What this means across settings
Homecare has a published average rate, which gives agencies a benchmark. Residential and nursing homes have no national average in this survey, so their case depends on their own cost evidence. A third of councils reported supported living and extra care closures or hand-backs in each of the last two survey rounds, up from under a fifth before that. That is a possible sign of strain in services that support people with learning disabilities and mental health needs.
What this means for your service
- Expect tight fee rounds. Councils overspent and must save £909 million. Uplifts will be contested.
- Lead with evidence. Bring your actual cost per hour or per bed, including NLW, NI and sick pay changes, to fee talks.
- Ask how your council used its precept and grant. The adult social care precept is raised for councils to spend on adult social care.
- Read the contract, not just the rate. Block contracts, volume guarantees and payment terms can be worth as much as the headline rate.
- If you are considering handing back a contract, follow the notice terms and talk to the council early. Moves affect real people.
- Check what the 28 October Budget changed for council funding.
Sources
- ADASS, Spring Survey 2026 (full report, 14 Jul 2026): https://www.adass.org.uk/wp-content/uploads/2026/07/ADASS-Spring-Survey-2026-Final-1-1.pdf (checked 27 Oct 2026)
- ADASS, ADASS Spring Survey: Rising adult social care needs leave councils £715 million over budget (14 Jul 2026): https://www.adass.org.uk/adass-spring-survey-rising-adult-social-care-needs-leave-councils-715-million-over-budget/ (checked 27 Oct 2026)
How we report: our editorial standards · corrections
Related guides from Kiwi
Kiwi News desk. Corrections and updates policy.
