Newham: social licensing in homecare

(2020 – ongoing)

In Newham, there is a strong commitment to community wealth building, which has been enshrined within the Council’s overarching economic strategy. As part of this they are reforming the social care sector using a form of social licencing.


  • Newham’s community wealth building approach brings a political economy lens to commissioning decisions within adult social care, with a commitment to utilising local generative providers where possible and where there is a service user need for some shift towards community delivery.
  • The homecare sector, particularly in England, is the most fragmented element of adult social care services. Across the UK there are nearly 700,000 people in receipt of domiciliary care from over 10,000 different regulated providers. These range from large national for-profit organisations to small locally based SMEs and not-for profit providers.

Market shaping

Newham have moved to a patch-based service that is broken down into eight community neighbourhood areas. They have then lotted their contracts and specified that providers can deliver only one lot each.

Furthermore, the Council have specified that providers must have a good knowledge of the community’s geography, facilities and services and must operate from an office in Newham. They are required to actively recruit care workers who reflect the Borough’s diverse population, specifically in relation to gender, culture/ethnicity and language. They are also required to pay their workforce the London Living Wage and to adhere to the principles of the UNISON ethical care charter.

In practice, this creates a strong disincentive for larger more extractive providers to enter the market. As a result, Newham now have locally-based small SMEs delivering their homecare service, who are required to operate there with a concern for the wider community and workers, alongside the pursuit of profit.

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