Last Updated on October 6, 2025
The Secretary of State for Health and Social Care has announced a £500m Fair Pay Agreement investment for adult care workers across England. In addition, a new body to negotiate changes to pay and terms and conditions for care workers will be set up including both employers and trade unions. The body will aim to improve recruitment and retention, giving staff better recognition for their work.
A public consultation to gather views on the design of the Fair Pay Agreement process has also been launched today by Government. Following this, the Adult Social Care Negotiating Body will be established through regulations in 2026 – with the first Fair Pay Agreement coming into force in 2028.
The Adult Social Care Negotiating Body and new Fair Work Agency will work together to tackle any exploitation occurring within the sector, through helping employers understand statutory duties and implementing effective enforcement.
The Fair Pay Agreement will be backed by law currently progressing in Parliament through the Employment Rights Bill, and will aim to empower employers and unions to negotiate better terms and conditions.
Today’s announcement follows the Spending Review settlement which saw a 2.6% real terms average annual increase in local government core spending power over the Spending Review period, including £3.4bn of new grant funding for local services. This £500m forms part of an increase of over £4bn of additional funding available for adult social care in 2028-29, compared to 2025-26.
Government has also taken steps to boost wages for the lowest paid workers including care workers, with the National Living Wage increasing by 6.7% to £12.21 this April. This increase is expected to benefit around three million low paid workers. This represents an increase of £1,400 to the gross annual earnings of a full-time worker on the National Living Wage.
Commenting on the announcement, Dr Jane Townson OBE, Chief Executive at the Homecare Association, said, 'We support the principle of a Fair Pay Agreement that improves pay and conditions for care workers. They deserve recognition, respect, and reward for the vital work they do.
'But good intentions aren’t enough. The funding announced today barely scratches the surface of the multi‑billion‑pound gap in homecare. Most public bodies continue to commission homecare at rates far below the cost of delivering it and that simply isn’t sustainable. Trying to deliver a Fair Pay Agreement without fair funding is like promising to fill the potholes but only buying the shovel. It’s a fool’s errand.
'For a Fair Pay Agreement to succeed, we must fix the funding model. This means national investment and a national approach to commissioning that ensures providers are resourced to deliver on their obligations as good employers.
'Improving pay for care workers isn’t just about fairness for staff, it’s about enabling consistent, high-quality care for the people who rely on it. When providers can’t afford to recruit or retain skilled workers, it’s older and disabled people who suffer through missed visits, rushed appointments or no care at all.'
Professor Martin Green OBE, Chief Executive at Care England, said, 'While the creation of a Fair Pay Agreement represents a long-awaited acknowledgement that care work is a skilled profession deserving of fair reward, today’s announcement does little to deliver any meaningful change for our workforce. It is a shame that after so many promises, the outcome amounts to as little as 15 pence per hour if focused solely on pay; something that will make little difference in practice by the people who keep this sector running.
'For a workforce of 1.6 million people, more than those employed in the NHS, yet still among the lowest paid in our economy, such a limited commitment sends the wrong message about their worth. The Government has raised expectations by branding the Fair Pay Agreement as the answer to the recruitment and retention crisis in the sector, using it to justify the restrictions placed on international recruitment, which many providers previously depended on to keep services running. But with funding this slight, it is hard to see how providers will attract or retain the staff they desperately need, undermining the very purpose of the agreement.
'We recognise this is a journey and that multiple agreements will follow, but the scale of today’s commitment is simply not enough to tackle the immediate challenges to recruit and retain staff that lie in front of us. If the Government truly wants to value the care workforce, it must dig deeper. This announcement may mark a step forward, but without meaningful investment in the years ahead, the sector will continue to see staff leaving at a time when they are needed most.'
Dr Rhidian Hughes, Chief Executive at the Voluntary Organisations Disability Group (VODG), said, 'The Voluntary Organisations Disability Group has long campaigned for better recognition and reward for social care workers and the essential contributions they make to improving the lives of millions of disabled people. This consultation is a very positive step forward for our highly valued adult social care workforce who day in and day out fulfil a vital public service.
‘The consultation presents an important opportunity for everyone to have their say and to ensure the proposals work for the breadth and diversity of the social care sector. Disability services are almost entirely funded by the state. Without sufficient funding to ensure local authorities can cover the full costs of the workforce, we will continue to be caught in a loop of increasing costs without the funding needed to cover them.
'VODG looks forward to working with our members – voluntary sector organisations working alongside and providing care, support and advice for disabled people – to respond to the consultation once the accessible versions and impact assessment has been published in the coming weeks.'
Professor Vic Rayner OBE, Chief Executive Officer at the National Care Forum (NCF), said, 'After months of speculation, the Government has put on the table the public funding they are making available to back their flagship Fair Pay Agreement. This announcement triggers the launch of a consultation period on key areas, including who is included in an agreement, what it covers in relation to pay, terms and conditions, how the negotiations will operate in practice, and enforcement.
As part of the Care Provider Alliance, we have been clear all along that it is not possible for a Fair Pay Agreement to deliver without properly addressing issues associated with how care is commissioned, long-term sustainable funding commitments, a properly resourced negotiating infrastructure and a shared understanding of the data needed to inform negotiations.
'As the voice of the not-for-profit care and support sector, we will be encouraging our members to engage in the consultation on the Fair Pay Agreement. Their insights, experience and evidence are essential to building a Fair Pay Agreement that works for providers, our brilliant workforce and the people who draw on care and support.'
Rachael Dodgson, Chief Executive at Dimensions UK, said, 'We [...] welcome the Government’s Fair Pay Agreement for the adult social care workforce. Its decision to recognise the sector above others cannot be over-stated. We share the Government’s commitment to collective bargaining. We work hand-in-hand with Unison to pay our frontline colleagues as much as we can.
'The social care frontline cries out for higher pay – and recognition for the vital work they do supporting those most in need. This agreement needs to stabilise recruitment within the sector. We pay frontline support workers as much as possible because we want the best possible support for people. Too often people who receive support can find that their support worker has changed, and a newly-recruited support worker or agency worker has to learn afresh how to support them.
'This lack of continuity of care leads to poor outcomes for everyone: both the person receiving support – and the public purse. The Government’s tightening of immigration rules puts more emphasis on domestic recruitment. Given the 111,000 vacancies already in adult social care, the Fair Pay Agreement is more critical than ever.
'We [...] have done all we can to boost retention in our organisation. Now, the Government must ringfence this Fair Pay Agreement so that local authorities are required to directly pass on funding to ensure higher pay. Ringfenced pay ensure that any extra Government allocation is spent where it’s needed most – with frontline care and support workers.'
For the latest information concerning the Fair Pay Agreement, visit the Department of Health and Social Care website.
In other news, the Royal Society for Public Health is calling for adult social care reform to improve working conditions and access to workforce training.