Joint submission to Senedd Finance Commitee on Welsh Government Budget 27-28
We submitted joint evidence to the Senedd Finance Committee ahead of the Welsh Government Draft Budget for 2027-28 with Care Forum Wales and Cymorth Cymru.
Commissioned social care services in Wales are being asked to deliver more for less, and to do it without knowing what they will be paid or when. This paper sets out evidence from 105 care providers, surveyed between 12 August and 25 September 2026. Between them they operate in every local authority area in Wales. They deliver care homes, nursing care, dementia care, domiciliary care and supported living.
Funding arrives late. Over a fifth of providers (22%) started 2026/27 without knowing their fee uplift. Only 9% had received the uplift in their bank account by 1 April. One in five (20%) still had not been paid it by 1 August, four months into the financial year. That makes it very hard for providers to set budgets, commit to pay rises or give staff certainty.
Uplifts fall well short of rising costs. Over half of providers faced wage cost increases of 7% or more on 1 April 2026, driven by the Real Living Wage, pension contributions and the rise in Employer National Insurance. Yet just 3% of responses (reported for each commissioning area) showed uplifts of 7% or more. Only 3% said their uplift fully covered their cost pressures, and 34% said it did not cover them at all. On average, providers told us they would need an uplift of 19.1% to meet this year's costs (mean of 59 responses). The median response was 15%.
The Real Living Wage commitment is not being funded. Providers support the Real Living Wage, and 80% have raised pay in line with it. But 83% said their uplift did not cover the cost, and only 39% were told their uplift included Real Living Wage funding. To bridge the gap, providers have:
- raised fees for people who pay for their own care (44%)
- absorbed the cost (37%)
- cut other spending (32%)
- drawn on reserves (32%)
- reduced staffing (24%)
None of these responses can be sustained, and several put quality and safety at risk.
New costs keep arriving unfunded. The increase in business mileage rates from 45p to 55p will cost providers an average of £13,030 this year. The impact falls hardest on domiciliary care and on rural areas.
A postcode lottery persists. Fee levels and uplifts vary widely between local authorities and health boards, and historically low rates are dragging fees down rather than up. In domiciliary care, commissioning models that pay only for contact time leave providers covering unpaid travel time and mileage. Some rates, such as the £29.94 per hour reported by one provider, are well below the Homecare Association's Minimum Price for Homecare in Wales of £37.13 per hour.
Without action in the 2027/28 Budget, more providers will reduce capacity, hand back contracts or close. That means less care for people who need it, more pressure on the NHS, and job losses for a workforce Wales has pledged to value.