Kent Proposes £1.78 Billion Elderly Care Contract Over 8 Years Amid Rising Nursing Demand

Kent County Council is preparing to rewrite the rules on how it provides care home placements for older people in a move that could cost up to £1.78 billion over eight years — one of the largest procurement exercises in its history. The overhaul signals a major shift in how the council intends to manage growing financial pressures, shifting demographics, and an increasingly fragile care provider market.

Faced with a projected 56% surge in demand for nursing care and a rapidly ageing population, the council will replace its current contracting system with a new “Open Framework” model from 1 April 2026, aimed at bringing cost control, quality assurance, and market stability back into a system officials warn is unsustainable in its current form.

From Open Market to Open Framework

Since 2016, Kent has used a Dynamic Purchasing System (DPS) to commission care home placements. The DPS allowed providers to join the market at any time and to revise their prices twice a year. While this model offered a high degree of flexibility, especially in times of urgent need, it has created major challenges in financial forecasting, market regulation, and care quality.

Prices varied widely between providers. There were no restrictions on joining the system, which led to inconsistent oversight and made it difficult for the council to enforce performance standards. In practice, this resulted in what council officers describe as a ‘race to the top’ in provider pricing, with services not always aligning with value for money or improved outcomes for care home residents.

Under the new Open Framework, provider entry will be permitted only at set intervals, and price adjustments will be limited to once per year. Care services will be structured into five clearly defined categories:

• Residential
• Residential High
• Nursing
• Nursing High
• Highly Specialised and Complex Care

This categorisation reflects the increasing complexity of people’s needs and is intended to ensure that placements are better matched to individual care requirements. It also offers the council more leverage to negotiate on price, monitor standards, and direct placements strategically across the county.

£50 Million Overspend Avoided — But Not by Cutting Budgets

Without reform, the council estimates that costs under the current DPS system could rise to an unsustainable level. By Year 4 of the forecast period, it expects a cumulative overspend of £50.3 million compared to the available budget.

By switching to the new model, the forecast overspend drops to £8.5 million, representing a cost avoidance of £41.8 million. Importantly, this is not a budget cut. The new framework will still cost around £222 million a year, but it aims to bring predictability and sustainability to what is currently a volatile and expanding area of council spending.

What is “Cost Avoidance”?

To understand the council’s strategy, it’s essential to clarify what it means by “cost avoidance.” In simple terms, this means taking steps today to prevent bigger costs in the future. Think of it like servicing a boiler: the routine maintenance costs something now, but it stops you from paying for a full replacement later. The new care framework is designed to do just that — provide a controlled, planned commissioning process that avoids the risk of uncontrolled cost escalation.

Nursing Care Demand Set to Soar by 56%

A key driver for reform is the dramatic increase in demand. According to Kent County Council’s own business case, nursing care placements are projected to increase by 56% due to rising life expectancy and increasingly complex medical and social care needs.

Older people are living longer, but often with multiple long-term conditions such as dementia, frailty, and chronic illnesses that require continuous and specialised care. The council must prepare not only for more placements but for more complex and costly placements.

The Grey Wave: Kent’s Older Population to Surge by 41%

Kent’s long-term population forecast paints a stark picture. According to the council’s Housing-Led Population Forecast Summary, the number of people aged 65 and over is expected to grow by 41% between 2023 and 2040.

This equates to:

• 361,000 older people in 2023
• Rising to over 510,000 by 2040

This demographic shift will put immense pressure on adult social care services, as older residents are statistically far more likely to require social support, care home placements, and complex nursing care. The most dramatic increase is among the 85+ population, who are most likely to experience frailty, mobility issues, and end-of-life care needs.

As the council notes:

“People are living longer, but with more complex needs.”

Adult Social Care: Kent’s Highest Cost

Adult social care is not just a priority for Kent County Council — it is by far its most expensive service.

According to Kent’s Draft Statement of Accounts for 2024/25, the gross expenditure for the portfolio titled Adult Social Care, Public Health & Integration was £932.5 million. After accounting for £246.2 million in government grants and £199.7 million in other income, the net cost to local taxpayers was £486.6 million.

That makes adult social care the single largest area of net expenditure in the entire council budget.

To put this in perspective:

• Adult Social Care and Public Health

  • Gross expenditure: £932.5 million

  • Government grants: £246.2 million

  • Other income: £199.7 million

  • Net expenditure:
    £932.5m – £246.2m – £199.7m = £486.6 million

The gross expenditure on Adult Social Care (£932.5 million) represents approximately 33.4% of Kent County Council’s total gross expenditure (£2.79 billion) in 2024/25.

So one-third – 33p of every pound Kent spends goes on adult social care alone.

• Children, Families and Education (CFE)

  • Gross expenditure: £258.4 million

  • Government grants: £101.7 million

  • Other income: £13.2 million

  • Net expenditure:
    £258.4m – £101.7m – £13.2m = £143.5 million

• Highways, Transport and the Environment (HTE)

  • Gross expenditure: £262.1 million

  • Government grants: £11.5 million

  • Other income: £48.9 million

  • Net expenditure:
    £262.1m – £11.5m – £48.9m = £201.7 million

Even when combined, the net spending on children’s services and transport remains significantly lower than the cost of adult care. This fiscal dominance explains why adult social care reform has become such an urgent priority — and such a political challenge — for both the county and the wider local government sector.

The figures also reflect a deeper demographic and economic truth: Kent’s ageing population and rising care needs are placing a structural, long-term pressure on local government finances that cannot be resolved by short-term fixes or council tax increases alone.

In-House Expansion Ruled Out

The council considered whether it could reduce costs and improve oversight by expanding its own direct care services. But the business case concluded that running care homes in-house would involve significant up-front investment in property, staffing, and pensions. It would also reduce flexibility and responsiveness.

Instead, Kent will retain a small in-house capacity for emergency and complex placements, while relying on the Open Framework to provide the bulk of care home services. This approach aims to combine strategic control with market access.

Legal Safeguards and Transition Plan

To avoid service disruption, the council plans to extend the existing DPS contract by up to nine months beyond its March 2026 expiry. A Voluntary Ex-Ante Transparency (VEAT) notice will be issued to avoid procurement challenges under public contract law.

The new contract will include break clauses, allowing it to be terminated early if Kent’s local government structure changes — for example, if unitary government is introduced.

The council has also completed key compliance checks:

• A full Equality Impact Assessment to ensure fair access to services
• A Data Protection Impact Assessment to ensure GDPR compliance

These legal and procedural safeguards aim to protect both service users and the council from future legal and financial risk.

What Happens Next?

The final decision on the new framework will be taken by the Cabinet Member for Adult Social Care and Public Health later this summer. If approved, the tender process will begin in autumn 2025, with contracts awarded in early 2026. The new system will go live on 1 April 2026.

This is not just a change in how Kent buys care. It is a wholesale reset of how it plans, controls, and funds vital services for older people — and one that could shape the next decade of care delivery across the county.

We would be interested in hearing about your views or experiences with KCC Adult Social Care. Email: TheShepwayVoxTeam@proton.me in confidence.

The Shepway Vox Team

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