Influencing outcomes in social care funding: understanding leverage, contracts and commissioning behaviour
Adult social care providers across England are facing a familiar challenge. Costs continue to rise, workforce pressures remain significant, and commissioners themselves are operating within increasingly constrained financial environments. Yet despite these pressures, providers are still expected to deliver safe, high-quality care, meet regulatory requirements, invest in their workforce and maintain financial sustainability.
Against this backdrop, discussions about fees often become adversarial. Providers can feel that decisions have already been made before conversations begin, while commissioners face competing demands and limited budgets. The result is often frustration on both sides.
However, one of the most important messages from legal director Sam Stone‘s webinar for Care England was that providers frequently have more influence than they realise. The challenge is understanding where that influence exists and how it can be used effectively.
The biggest mistake providers make
Many funding disputes begin long before the dispute itself. Providers often focus on negotiating fee uplifts after contracts have been signed, placements have been accepted and services have been delivered for months or even years. By that stage, much of their negotiating power has already been lost.
As Sam highlighted, the strongest negotiating position usually exists at the very beginning of the contractual relationship. At that point, the commissioner needs a provider to deliver care. Once the placement is accepted and care is underway, the balance of power often shifts significantly.
This does not mean providers should refuse placements. It does mean providers should pay greater attention to the contractual arrangements that underpin those placements. Questions that should be considered at the outset include:
- What exactly is being commissioned?
- How will changes in care needs be managed?
- What mechanisms exist for fee reviews?
- How can either party terminate the arrangement?
- What information must be provided when needs change?
- How will future cost pressures be considered?
These questions can feel administrative during a busy admission process, but they frequently become the central issues months or years later when funding disputes emerge.
Understanding leverage
One of the most useful concepts discussed during the webinar was leverage. In simple terms, leverage exists when it is more difficult or more expensive for a commissioner not to work with a provider than it is to continue working with them.
Many providers underestimate the leverage they already possess. Specialist services, complex care provision, geographical shortages, workforce constraints and market fragility all influence commissioning decisions. Local authorities and ICBs have statutory responsibilities to ensure care needs are met and that local care markets remain sustainable.
This does not mean providers should adopt confrontational approaches. Quite the opposite. The most effective providers understand their value within the local system and are able to articulate it clearly and evidence it properly and commissioners are far more likely to respond positively to detailed evidence than to broad statements about financial pressures.
Contracts matter more than many providers realise
A recurring theme throughout the session was the importance of understanding contracts. Many providers find themselves delivering services where contracts arrive late, where placement agreements are incomplete, or where documentation does not fully reflect the care being provided.
While such arrangements may be common, they create significant risks. Where contracts are unclear, disputes about fees, responsibilities, termination rights and care requirements become much harder to resolve. Providers should therefore routinely review:
- Overarching framework agreements
- Individual placement agreements
- Fee schedules
- Review provisions
- Dispute resolution clauses
- Termination provisions
Particular attention should be paid to whether the contract actually reflects the care being delivered. If care needs have increased significantly over time but the contractual arrangements have not been updated, providers may be carrying additional obligations that were never properly assessed or funded. The longer this situation continues, the harder it can become to demonstrate that additional funding is required.
Why evidence is everything
Perhaps the strongest practical message from the webinar was that successful funding discussions are built on evidence. Commissioners make decisions based on information. If providers do not supply that information, decisions will inevitably be based on whatever information is available. This means providers should not wait until annual fee reviews to begin building their case. Cost pressures should be monitored throughout the year and evidence should include:
- Workforce costs
- National Insurance increases
- National Living / Real Living / London Living Wage impacts
- Agency expenditure
- Energy costs
- Regulatory requirements
- Occupancy pressures
- Local market changes
- Service complexity
Importantly, providers should also be able to explain how those factors affect their own organisation rather than relying solely on national averages. A common frustration within the sector is the use of broad inflation measures such as CPI when care providers experience cost pressures that are significantly different from the wider economy.
The strongest response is not simply to challenge CPI itself but to demonstrate why care-specific costs have increased at a different rate and why those increases materially affect service sustainability.
Start earlier than you think
One practical recommendation reinforced during the discussion was timing. Too often providers begin funding discussions shortly before local authority budgets are finalised and by which stage, opportunities to influence decisions may already have been missed.
Instead, providers should engage much earlier. Many experienced operators begin preparing evidence six months before annual uplift decisions are expected. Early engagement provides commissioners with time to understand the issues, consider the evidence and potentially incorporate additional funding into budget planning processes.
It also demonstrates that the provider is approaching discussions constructively and proactively rather than reactively.
The importance of a Plan B
One of the more uncomfortable but important themes discussed was the need for providers to understand their own red lines. Every organisation should know:
- Which placements are financially sustainable
- Which placements are not
- What level of funding is required to maintain viability
- What action would be taken if funding remains inadequate
This is not about making threats; it is about strategic planning. Providers who understand their position are better able to engage confidently in discussions because they know the consequences of different outcomes.
Without a clear Plan B, negotiations can become reactive and inconsistent. With a clear Plan B, providers are better positioned to make informed decisions and communicate them credibly.
Relationships still matter
Despite the legal and contractual focus of the webinar, another important message was that relationships remain critical. Commissioners experience staff turnover, restructuring and competing priorities. The person sitting across the table today may have little understanding of previous conversations or agreements.
Providers should therefore assume that they need to explain their circumstances clearly, repeatedly and consistently. Constructive engagement remains significantly more effective than confrontation.
Most disputes are not resolved through courts, most are resolved through discussion, evidence, negotiation and persistence.
Even where formal dispute resolution processes exist, they are often most effective because they create structured opportunities for dialogue rather than because they lead directly to legal outcomes.
Looking ahead
The financial pressures facing adult social care are unlikely to ease in the near future. Providers will continue to face difficult conversations around funding, workforce costs and sustainability. However, the webinar highlighted that providers are not powerless participants within the system.
Understanding contracts, gathering evidence early, engaging proactively, recognising leverage and maintaining constructive relationships can significantly improve outcomes.
The most successful providers are not necessarily those who shout the loudest. They are often those who prepare the best, understand their position clearly and present commissioners with evidence-based arguments that are difficult to ignore.
In an increasingly challenging funding environment, that approach may prove to be one of the most valuable tools available to the sector.
If you would like to review the webinar and slides, please click here.
Care England will be running further workshops/sessions where care providers can connect with Sam and other legal professionals to pose further questions with a view to considering their current approach and changes they may wish to consider.