Predicted £623m overspend on adult social care budgets

Local authorities across England are projecting a £623m overspend on adult social care budgets – the highest levels reported since the COVID-19 pandemic.

The Association of Directors of Adult Social Services’ (ADASS) 2025 Autumn Survey paints one of the starkest pictures of adult social care finances since 2020.

The anticipated overspend in 2025-2026 is equivalent to 3% of total adult social care expenditure and shows that councils are already modelling £869m of savings for 2026-2027 simply to meet basic statutory duties.

ADASS highlights that this financial pressure is being driven by rising complexity and escalating demand, including a 30% increase in the number of 18 to 24 year olds requiring high-cost care packages above £7,000 per week, and continued instability in local care markets.

And, since April, 4,254 people have been affected by provider closures, contract handbacks, or services ceasing to trade.

The report also confirms that a third of councils say they have very little, or no, influence in their Integrated Care Systems, and half do not have an agreement with their local health partners on delegated healthcare activities, leaving fundamental questions unanswered on funding, training, and competency.

Commenting on the figures, Professor Martin Green OBE, chief executive of Care England, said: “This survey lays bare a truth we can no longer ignore.

“Adult social care is being asked to do the impossible.

“Councils are overspending by hundreds of millions just to keep people safe, yet next year they are expected to cut even more.

“You cannot protect people’s lives on a budget that is already running on empty.

“At the centre of these pressures are people whose safety, dignity and independence depend on a system that is being stretched further every year. 

“We are watching a structural funding gap grow wider by the year, while demand and complexity continue to rise.

“The Government talks about delivering more care in the community, but that ambition will collapse unless adult social care is finally treated as the backbone of the health and care system, not an afterthought.”

Care England is calling on the Government to act urgently by:

• Providing immediate stabilisation fundingso councils can meet the projected £623m overspend without suppressing provider fees or reducing access to essential services
• Matching funding to demand, particularly for working-age adults with complex needs whose care requirements are rising fastest
• Fully funding the costs of national policy changes, including the Fair Pay Agreement, Employment Rights Bill, and Employer National Insurance Contribution increases.
• Creating a funded, national framework for delegated healthcare activitieswhich includes training, competency, accountability, and payment for increased responsibility
• Rebalancing national investment towards community care and prevention, enabling councils to shift from crisis management to early support and market stability

Kathryn Marsden OBE, chief executive of the Social Care Institute for Excellence adds: “This report provides further evidence that rising demand, escalating needs, and intense financial pressures – including significant overspends and savings requirements – are forcing local authorities to prioritise crisis management over early intervention in social care.

“The effects of a crisis-led system are that fewer people benefit from available resources and there are fewer opportunities for system reforms.

“The financially-strapped social care system will likely compromise the delivery of the Government’s three shifts.

“Early intervention in social care is especially critical to the success of neighbourhood health schemes, which rely on integrating health and social care services.

“Our evidence shows that early intervention schemes depend on having dedicated capacity, shared digital records, funding alignment, joined-up leadership, and common purpose. These enablers are in short supply in crisis-driven systems.

“The ADASS survey also highlights a significant increase in high-cost social care for young adults.

“We know that young people moving from adolescence into adulthood are at risk of significant harm, especially those with complex needs.

“Urgent reform is needed to ensure they and their families are supported to manage continuity of care and support in a timely, compassionate, and co-ordinated way.”

And Dominic King-Carter, director of policy and public affairs at the Carers Trust, told Complex Care Management: “We fully echo ADASS’ view that social care can, and should, play a fundamental role in the UK Government's NHS reforms, and that it is currently unable to perform that role due to ongoing inadequate resourcing of social care.  

“This is why the Government must first inject much-needed short-term funding to stabilise the current system and then take bold measures to radically reform the funding of social care for the five million carers in England and the millions of people they care for.” 

The Carers Trust’s own survey of its network of services found there has been a 20% real terms cut in statutory funding per carer it supports since 2021-22.

And 50% of local carer services in the network reported there has been either no growth, or a reduction, in their contract value since last year.  

“Unpaid carers continue to be expected to pick up the pieces of a broken social care system. Change cannot come soon enough. This is a national crisis and must be recognised as one now,” King-Carter adds.