FPAs are industry-wide negotiated agreements on pay and working conditions, enforceable much like the National Minimum Wage. They are designed to lift wages and conditions across a sector, rather than at the individual employer level.
In the UK’s adult social care sector, the first FPA will be negotiated through the Adult Social Care Negotiating Body and is expected to be implemented by 2028, with an initial Government investment of £500m. This money is drawn from a larger £4bn increase in funding for adult social care, announced in the recent Spending Review. This investment of £500m is being seen by the sector as insufficient to fully cover the expected cost increases, meaning councils and care providers will need to absorb a large share.
The funding shortfall could mean care providers – particularly smaller ones – face financial pressure, increasing the risk of cuts to services or even closures if contracts are unaffordable. As larger care providers tend to have more financial resilience, they are better positioned to absorb higher labour costs, at least in the short to medium term, without the immediate risk of closure.
The Department of Health and Social Care sought the views of individuals and organisations about FPAs in an open consultation, which closed on 16th January 2026. This consultation aimed to gather views from the sector on how to establish the best way to collectively agree an FPA, including the Adult Social Care Negotiating Body, the negotiating process and implementation. Following the passage of the Employment Rights Act 2025 at the end of last year, the establishment of the Adult Social Care Negotiating Body has now been written into law.
View from the sector
Professor Martin Green, Chief Executive at Care England, has highlighted that the initial funding of £500m for the FPA is seen as insufficient by sector leaders, stating, ‘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.’
The Local Government Association’s Head of Workforce, Naomi Cooke, has said, ‘Unlike other sectors, care providers are limited in their ability to increase productivity or cut costs to absorb the impact. This potentially means higher contract fee demands for councils and self-funders.
‘Higher fees are likely to mean greater demand for services (as self-funders run out of funds) and the return of some contracts where a provider cannot meet the new costs. The worry is that if councils can’t adjust fees, providers may cut services, reject new contracts or exit the market altogether. That’s a real risk to continuity, especially in communities already stretched thin.
‘The flip side is that better pay and conditions could finally tackle the sector’s chronic recruitment and retention issues. Fewer vacancies, better care, less pressure on unpaid carers and NHS discharge teams. It is a compelling vision – if the funding follows.’
Helen Wildbore, Chief Executive Officer at Care Rights UK, has indicated that fair pay is only one piece of a larger puzzle, saying, ‘This investment is a critical first step in building recognition for the care workforce […] A fair pay agreement needs to come with broader work to recognise and value care work as a vital public service.’
By setting sector-wide minimum standards on pay and employment terms, the FPA aims to create a more predictable, professional and sustainable operating environment. The question is whether that promise can be delivered without placing even more financial pressure on providers and commissioners.
If you follow the media, you would be forgiven for thinking that the care market collapsed several years ago. Social care has been lurching from crisis to crisis for years. It is true that margins are thin and costs are rising. However, funding for care operators has increased significantly since 2016 to cover the biggest pressure – the increase in National Living Wage. The answer to the question about the impact of the FPA on sustainability is a rather unsatisfactory ‘it depends’. The market is mostly comprised of micro providers, with only about 20% of care delivered by the large corporations in both care homes and domiciliary care. Overall, the number of care homes is decreasing, with mainly smaller homes closing and a net increase of only 86 places last year – set against demographic change, care home places per capita have declined. Despite a small increase of 5% in domiciliary care hours in 2025, the recent trend is also downwards. Limited expansion and regional variability points to a very fragile market. When the number of people waiting for an assessment is factored in – 196,000 people waiting without support and 4,000 per day stuck in a hospital due to lack of social care – the picture looks even more precarious. The availability of a capable workforce is one of the main threats to provider sustainability. Anything that bolsters the supply of suitably qualified employees, such as an increase in pay, will help to stabilise the market. But this must be underpinned by fee rates that enable wages to rise. All the signs are that the FPA will not be properly funded, putting extra pressure on councils. This may mean cutting care for existing clients, increasing thresholds or gatekeeping via waiting times. The market may not collapse but people needing care and support, and their families, might. Sara Livadeas, Social care expert and Founder, Social Care Works Email: [email protected] X: @saralivadeas
The CPA has long campaigned for better pay and conditions in the sector; our surveys, along with many others, show that workers in social care are underpaid compared to most employment sectors. We welcome Government’s recognition of low pay and conditions in social care; the FPA has the potential to make a difference. However, while there is a time to go before the FPA is operational, many details still need to be addressed. For instance, is the money allocated enough? As we said last September, ‘£500m to fund a FPA is a start, but realism is required […] This new funding runs the risk of being thinly spread and going largely unnoticed.’ This is a critical issue – if the funding is not sufficient to cover the costs and yet providers are expected to pay for pay increases, it could threaten further the survival of the social care sector; as we have consistently stated, the sector is already under huge financial pressure. Secondly, in a sector with a diverse range of organisations and settings, it will be easy to overlook parts of the sector. It is encouraging that the Government’s consultation on the FPA process acknowledges the need for a wide variety of employer perspectives. Thirdly, without adequate enforcement resourcing, we are in danger of repeating the problems we are seeing relating to the minimum wage, for which enforcement is patchy. An adequately resourced enforcement function will be essential. We all want a sector that is better paid; fair pay ultimately benefits the people who rely on care as well as those who provide it. We will continue to work closely with our social care colleagues, and the Government, to ensure we get the best outcome. For more about the FPA, please see the CPA FPA community of practice hub. Ewan King, Chair, Care Provider Alliance (CPA) Email: [email protected] LinkedIn: @Ewan-King-Care-Provider-Alliance