The vacancy rate fell to 6.2%. Here is the fragile bit.
The vacancy rate is 6.2%, the lowest since 2015/16, but British nationals in the workforce fell by 40,000 while non-EU nationals rose by 60,000.
Fair pay negotiations start April 2027: plan your costs
Negotiations start April 2027 and the first agreement takes effect April 2028, with £500 million allocated and around 1.5 million workers in scope.
You now have a date to plan against. The Adult Social Care Negotiating Body will be established in 2026-27, negotiations begin in April 2027, and the first agreement takes effect in April 2028. Around 1.5 million workers are in scope. If you are modelling staff costs beyond next year, that is the horizon.
What the government has decided
The government response was published on 16 July 2026 alongside a Written Ministerial Statement. The consultation ran from 30 September 2025 to 16 January 2026 and drew 1,077 responses, 55 further submissions and 83 easy-read responses. The full response is on GOV.UK and the statement is on the Parliament site.
The Negotiating Body will be an advisory non-departmental public body, independent of ministers, with an independent chair appointed through a regulated public appointment and a secretariat provided by DHSC. The chair is due to be appointed in autumn 2026 — that is now.
Who is at the table
Workers are coordinated by the TUC, bringing in UNISON, GMB, Unite and the RCN. Employers are coordinated by the Care Provider Alliance. Local government participates without a vote.
Read that last point carefully. The bodies that commission most publicly funded care, and set the fee rates that determine whether an agreement is affordable, are in the room but cannot vote on the outcome. That structural gap between who agrees the cost and who funds it is the single biggest risk in the design.
Scope and money
The agreement covers adult social care workers as defined in the Employment Rights Act 2025, excluding those on Agenda for Change, NJC or NHS PRB terms. That exclusion is reviewable after three years.
Scope covers pay and terms and conditions, with flexibility to address training, progression and workplace culture. £500 million has been allocated, rising to around £500 million for 2028/29.
Divide £500 million by roughly 1.5 million workers and the arithmetic is sobering. This is a floor-raising mechanism with a defined funding envelope, not an open-ended uplift. Providers who model an agreement as fully funded will be disappointed; providers who model it as entirely unfunded will overreact.
What this means for you
- Build April 2028 into your financial model now. A two-year runway is enough time to renegotiate contracts, but only if you start while contracts are being renewed.
- Work out what proportion of your workforce sits inside the definition in the Employment Rights Act 2025 and outside the excluded terms. That is your exposed headcount.
- Model differentials, not just the floor. If the bottom rate rises, your senior carers, team leaders and deputies expect movement too, and that cost is not in anyone's envelope.
- Engage through the Care Provider Alliance. Employer representation is coordinated there, and a body without provider input will produce an agreement providers cannot deliver.
- Watch the fee-setting side, particularly the consolidation of ring-fenced grants into local authority Fair Funding Allocations, which removes the mechanism that pushed councils to demonstrate fee uplifts.
- Diary autumn 2026 for the chair appointment and 2026-27 for the body's establishment. The shape of the first agreement will be visible in how the body is constituted long before April 2027.
Where this came from
The government response to the Fair Pay Agreement process in adult social care consultation and the Written Ministerial Statement of 16 July 2026.
Sources
Questions people ask about this
When will the Fair Pay Agreement actually affect our wage bill?
The first agreement takes effect in April 2028. Regulations were laid in 2026, the chair is appointed in autumn 2026, the body is established in 2026-27 and negotiations begin in April 2027. Build the cost into models from 2028/29, and expect differential pressure on senior rates alongside any floor increase.
Which of our staff are in scope?
The agreement covers adult social care workers as defined in the Employment Rights Act 2025, excluding those on Agenda for Change, NJC or NHS PRB terms. That exclusion is reviewable after three years. Work out your exposed headcount now rather than assuming your whole workforce is either in or out.
Is the £500 million enough to fund the agreement?
£500 million has been allocated, rising to around £500 million for 2028/29, against roughly 1.5 million workers in scope. That is a defined envelope rather than an open commitment. Providers should model a partially funded outcome and pay close attention to how local authority fee rates move alongside it.
How this was written. Care Shield’s press desk drafts from primary sources — the statute book, regulator publications and government announcements — and publishes automatically once every factual claim traces to a named source. The sources are listed above so you can check them. It is not legal advice, and it is not a substitute for reading the regulation that applies to your service. If you find something wrong, tell us at hello@careshieldcompliance.co.uk and we will correct it in public, on this page.
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