The Sums Behind Care - Funding, fair pay and the charging question in Scottish social care

MAC RESEARCH & CONSULTANCY

Briefing – June 2026

Plans to rebuild the system have been put on hold. So the plain questions matter more than ever: who pays, how much, and does the money reach the people who give care? This piece sets out where things stand – with the latest figures – and what care providers can do while the rules are still up in the air.

Why this matters now

For three years, most of the talk about social care in Scotland has been about how it should be run – whether to set up a National Care Service, how to organise it, and who should be in charge. Those plans have now been shelved, and the law has been rewritten as the Care Reform (Scotland) Bill. With the big questions about structure parked, attention has turned to something simpler but more pressing: the money. How much goes in, how staff are paid, and whether people are asked to pay towards their own care.

These three things – funding, fair pay and charging – are really one problem seen from three sides, and each one pulls on the others. You can only pay staff fairly if the funding is there to cover it. You can only stop charging people if councils can afford the loss. And the reason councils struggle is that their budgets are already stretched. Anyone who plans, buys or delivers care in Scotland needs to see how the three fit together.

Part one: the money going in

Most health and social care in Scotland is planned by 30 local bodies called Integration Joint Boards – partnerships between each council and its NHS board that decide how care is delivered in their area. They are where national funding meets local need, and right now they are the clearest place to see the strain.

The national picture is stark. When these boards set their budgets for 2025–26, they were short of what they needed by around £449 million between them. To put that in plain terms: that is the gap between the care they are expected to deliver and the money they have been given to deliver it.^[1]

They have been covering that gap in two ways, and both are running out. Some draw on savings they had put by for a rainy day; others lean on their council or NHS partner for extra cash. But the rainy-day money is nearly gone. At the end of 2024–25 the boards held about £404 million in reserves – but £316 million of that was already promised to specific things, leaving only a thin cushion against a gap more than five times its size. Nine boards now have no rainy-day money left at all.

The country’s spending watchdog, Audit Scotland, has been blunt about where this leads. It describes a repeating pattern of overspending, running down savings, and patching the gap with one-off cuts that only push the problem into next year. The warning, in plain words, is that the present approach cannot go on, and that services need to be redesigned rather than simply trimmed.

How this looks close to home

These are not just national totals. Each board publishes its own figures, and the same story repeats across the country. A few examples give the scale:

Area	The gap they face	What it means locally
Glasgow City	£118m over three years (to 2027/28)	£40m of savings sought in a single year; around 145 jobs were put at risk in one budget round, with no forced redundancies planned.
Aberdeen City	£10.9m needed to balance 2025/26	£14.4m of savings agreed; councillors said the board was “living beyond its means” and had no reserves left.
Renfrewshire	£10.7m (2024/25), rising to about £22.9m a year	Most of the board’s reserves expected to be used up by 2025/26.
Aberdeenshire	About £57m over five years	The only board to reach the end of 2023/24 with no reserves at all.

Figures from each board’s published audit and budget reports.^[2]

Ask the boards why they cannot balance the books, and they give strikingly similar answers. The cost of providing care, and the number of people needing it, are rising faster than the money coming in. People are living longer – the number of Scots aged 75 and over is expected to keep climbing for decades – which steadily increases demand. And the savings made are too often one-offs that do not solve next year’s problem. The boards also point out that they lean on councils and NHS partners to bail them out, but those partners are under the same pressure and cannot keep finding extra money.

The gap between what the system is asked to do and what it is paid to do is now bigger than the savings set aside to cover it. That is the heart of the problem.

Part two: fair pay, and what we don’t know

The real living wage for care staff has risen to £13.45 an hour. That is a real step up from a few years ago, and it sits above the legal minimum. As a statement of values, it is the right one: care work is skilled and hard, it has long been underpaid, and better pay is the most direct way to show staff they are valued and to keep them in the job.

But the promise is not fully paid for. For 2026–27, the local government body COSLA worked out that the funding for this wage was short by about £15 million – roughly £160 million provided against the £175 million needed. A gap that size does not stay on paper. It lands on care providers, who must either swallow the cost, pass it on, or cut back on what they offer.

There is also a quieter problem that gets too little attention. The Scottish Government does not actually know what care staff across the sector are paid. Promising a set rate, without checking whether that rate reaches workers, means making a promise partly blind. It is hard to defend a policy when you cannot show it is working – and harder still to make it better.

What care providers can do

•    Be open about pay. Providers who can show clearly where the money goes – and where it falls short – are in a stronger position when they talk to the boards that buy their services.

•    Plan for the gap. Where a national promise is underfunded, build that shortfall into the budget from the start, rather than being caught out partway through the year.

•    Make keeping staff the main goal. Pay is the tool, but what matters to people getting care is seeing the same familiar faces. Talk about pay in those terms.

Part three: should people be charged?

The third question is the one that touches people most directly. Scotland promised to stop charging for care given in people’s own homes (as opposed to care homes) by 2026, building on the long-standing rule that personal and nursing care is free. The thinking behind it is simple and fair: charging someone for the help that lets them live with dignity at home is, in effect, a charge on their need.

In reality, that promise now looks unlikely to be met on time – and the reason is the funding gap described above. Boards facing rising need and empty reserves find it hard to give up any income. So the system is pulling in two directions at once. While the national aim is to scrap charges, some councils are doing the opposite – East Renfrewshire, for example, agreed to bring in wider charges from April 2026, after its board pointed to severe pressure on its budget.

That split is the real story. It means the cost of care at home now depends on where you happen to live – the very unfairness a national approach was meant to fix. For the people who rely on care and their families, it also causes worry. And it hides a deeper problem: when a charge puts people off asking for help, that need never shows up anywhere, so no one plans for it.

An uneven charging system does more than cost people money. It hides need – and need that no one can see is need that no one plans for.

Where the three meet

Put together, these three issues show a system stuck between what it believes in and what it can afford. The beliefs are clear and, for the most part, good ones: fair pay for skilled staff, free care when people need it, and the same deal wherever you live. The means – boards short by nearly half a billion pounds, with the savings to cover it almost gone – are not yet enough to deliver them. Shelving the plans to rebuild the system has not made this tension go away. It has simply removed the cover that let people put it off.

For the sector, that is uncomfortable but useful. It brings the debate back to basics. The question is no longer mainly about who should run social care, but about what we are willing to pay for, and how honestly we are willing to account for it. That is a harder conversation – and a more useful one.

A view from Mac Research

Our view, as ever, is that keeping a service financially sound and putting people first are not opposites. In a year with empty reserves they can certainly feel that way – every pound spent on quality is a pound the budget does not have – and that is exactly why boards reach for the quickest cuts: fewer hours, posts left empty, packages trimmed. But the quickest cut is rarely the cheapest one. The saving is easy to count; the cost is not.

Take staff pay. Underpaying care workers looks like a saving, but it drives the thing that costs most: people leaving. When experienced staff go, a service loses the familiar faces that hold good dementia and social care together, spends heavily on recruitment and agency cover, and sees quality slip. The wage bill falls on paper while the real cost rises out of sight. The same logic runs through the whole system – a missed visit, a delayed support package, a person left to cope alone often ends in a fall, a crisis, or a hospital bed that costs far more than the care that would have prevented it. Cutting the visible cost of care frequently just moves a larger, hidden cost somewhere else.

Charging follows the same pattern. A charge that puts someone off asking for help removes that cost from one budget, but the need does not disappear – it resurfaces later, often larger and more urgent, in a different part of the system. The income is banked today; the consequence lands tomorrow. So charging may shift a cost rather than save it, and a system that cannot clearly account for where its money goes – as the missing data on care-worker pay shows – cannot even tell which is happening.

This is why we argue that financial sustainability and person-led, rights-based care are, in the end, the same goal seen over a longer horizon. A service that invests in fair pay, steady relationships and timely support is not being generous at the expense of its budget; it is making the choice that costs least once the full bill is counted. The mistake is to judge care by this year’s savings alone.

It is only fair to note the Scottish Government’s response: it points to record investment of £21.7 billion in health and social care in 2025–26, including almost £2.2 billion for social care and integration, up £1.2 billion since 2021–22. The boards’ reply is that even this is not keeping pace with rising costs and demand – which is why the gap persists.^[3]

When the rules are still unsettled, the most useful thing a provider can do is gather evidence: of what care costs, of where the money lands, and of what charging decisions mean for real people. Evidence is what turns a good intention into a plan you can stand behind – and it is what lets the sector hold the next round of reform to its word. The plans may be on hold, but the sums are not. That is the work in front of us now.

Arlene Bunton

Director, Mac Research and Consultancy Limited

www.macresearchandconsultancy.co.uk

This briefing is for discussion and is not legal or financial advice. Figures quoted are drawn from publicly available Audit Scotland reports and individual board papers, current to early 2026, and are revised as budgets are agreed.

^[1]Accounts Commission / Audit Scotland, Integration Joint Boards Finance Bulletin 2024/25 (published February 2026). Figures relate to the budgets set for 2025–26 and reserves at the close of 2024/25.

^[2]Figures are drawn from each board’s published annual audit reports and budget papers (2024/25 and 2025/26). They are point-in-time projections and are revised as budgets are agreed.

^[3]Scottish Government statement, reported February–March 2025. Covers the wider health and social care budget, not IJBs alone.