The unresolves financial problem in Adult Social Care

 

 

 

Most care providers do not lose money because they deliver poor care.

They lose money because they sign public commissioner contracts they cannot sustain, fail to challenge funding decisions early enough, or continue delivering services long after agreements have broken down.

Across adult social care, providers are quietly absorbing enormous financial pressures linked to commissioning disputes, delayed fee uplifts, unclear contract terms, and placements that no longer reflect the true cost or complexity of care being delivered.

And in many cases, by the time providers seek advice, the financial damage has already been done.

Care England and Hempsons are hosting a webinar on 9 June focused on one of the most overlooked operational risks in the sector: commissioner funding disputes and the practical steps providers can take before issues escalate into financial crisis.

The reality behind the disputes

A provider accepts a placement based on one level of need. Six months later, the individual’s care needs have significantly increased, staffing pressures have grown, and the placement is no longer financially viable. Yet the funding level remains unchanged while reassessments drag on for months.

Another provider signs a framework agreement with vague wording around annual fee reviews, inflationary uplifts and exceptional care costs. When costs rise sharply, they discover there is little clarity around commissioner obligations or review mechanisms.

Elsewhere, a care home continues delivering care after a contract technically expires because no replacement agreement has been issued and no provider wants to risk disrupting care for residents. Months later, disputes emerge around payment terms, liabilities and retrospective funding.

These are not rare scenarios. They are becoming increasingly common across both local authority and NHS-funded commissioned care.

The challenge for providers is that many disputes are not caused by one dramatic event. They emerge slowly through unclear wording, poor communication, delayed escalation, or a lack of understanding around what can realistically be challenged and when.

The pressure on providers has intensified over the last two years.

Workforce costs have increased significantly. Acuity and complexity of need continue to rise. Providers are supporting people with increasingly complex physical, mental health and behavioural needs, often without corresponding funding adjustments.

At the same time, local authorities and Integrated Care Boards are under immense financial pressure themselves, creating increasingly difficult negotiations around fees, contract terms and service sustainability.

Political and structural changes are also reshaping commissioning arrangements. Integrated commissioning, changing council leaderships, neighbourhood models and evolving procurement approaches all create uncertainty around how decisions are made and who holds accountability.

For providers, this means contractual awareness and early intervention are no longer optional leadership skills. They are critical operational protections.

The webinar with Hempsons will focus on practical realities facing providers now, including:

• Common contractual pitfalls providers overlook
• When and how funding decisions can be challenged
• Managing fee disputes before relationships break down
• Practical negotiation strategies around cost pressures and viability
• What providers should document before escalating concerns
• Risks around continuing services without clear contractual terms
• Procurement processes and challenge points providers often miss
• How providers can protect services while maintaining constructive commissioner relationships

 

Importantly, the session is designed to be practical rather than theoretical. The aim is not to encourage conflict with commissioners, but to help providers understand their position, reduce risk and navigate disputes earlier and more effectively.

A sector issue, not an individual provider problem

Many providers experience these challenges in isolation, assuming they are unique to their organisation or locality.

In reality, the same themes are emerging nationally: delayed uplifts, growing care complexity, inconsistent funding decisions, and uncertainty around contractual obligations.

The providers who navigate these challenges best are often not the largest providers or those with the biggest legal budgets. They are the organisations that understand their contracts, gather evidence early, escalate concerns appropriately and approach negotiations strategically.

 

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Join the Hempsons webinar

This webinar aims to help providers build that confidence before issues become crises.

Register for the webinar with Care England and Hempsons on 9 June to explore the practical realities behind commissioner funding disputes and how providers can better protect service sustainability.