BCF funding is composed of mandatory contributions from integrated care boards (ICBs) and local authorities. Local areas can also voluntarily pool additional funding through the BCF where they are assured that this represents value for money.

Details for the minimum contributions to the BCF for 2025 to 2026 are set out below.

To give local areas greater flexibility in how they meet the objectives of the BCF, the previously ring-fenced Discharge Fund has been consolidated within the BCF. While discharge funding is now consolidated, reducing discharge delays remains a critical shared priority across the NHS and local authorities, and plans should reflect a continued focus on this area.

The ICB discharge funding has been consolidated into the NHS minimum contribution to the BCF, forming 1 allocation with a value of £5,614 million in 2025 to 2026.

Local authority discharge funding has been consolidated into the Local Authority Better Care Grant, formerly known as the improved Better Care Fund (valued at £2.14 billion in 2024 to 2025) to form the minimum local government revenue contribution to the BCF with a value of £2,640 million in 2025 to 2026.

NHS minimum contribution

The NHS minimum contribution to the BCF in 2025 to 2026 will be £5,614 million. The minimum contribution to adult social care from the NHS minimum contribution to the BCF in each health and wellbeing board (HWB) will increase by 3.9% over the 2024 to 2025 baseline.

Allocations from the NHS minimum contribution for each ICB and HWB are published on the NHS England website, alongside the NHS operational planning guidance.

The Secretary of State for Health and Social Care will issue “The National Health Service (Expenditure on Service Integration)” directions to NHS England under section 223B(6) and 223B(7A) of the NHS Act 2006 to ringfence £5,614 million to form the minimum contribution to the BCF in 2025 to 2026. The direction will be issued before 31 March 2025.

The planning requirements document, published jointly by NHS England, the Department of Health and Social Care and the Ministry of Housing, Communities and Local Government contains directions from NHS England to ICBs under section 223GA of the 2006 Act relating to the funding allocated to them, including the conditions that must be met by ICBs relating to the receipt and use of such funding. These conditions ensure that this funding is being spent in accordance with the policy framework.

Local Authority Better Care Grant

As announced in the provisional Local Government Finance Settlement, the allocation for the Local Authority Better Care Grant for 2025 to 2026 is £2,640 million. This ring-fenced grant will be made under section 31 of the Local Government Act 2003. The grant determination will require funding to be spent in accordance with the national conditions set out in the policy framework and will be issued before 31 March 2025. A core condition will be that the grant is pooled into a section 75 arrangement under the NHS Act 2006 and used for local areas’ BCF plans. This funding does not replace, and must not be offset against, the NHS minimum contribution to adult social care.

Disabled Facilities Grant

Housing adaptations, including those delivered through the Disabled Facilities Grant, support the BCF objectives by helping towards the costs of making changes to people’s homes to enable them to stay well and remain independent for longer. Funding for the Disabled Facilities Grant in 2025 to 2026 will be £711 million, which will enable more people to benefit from housing adaptations and will help support both the shift from sickness to prevention, and from hospital to home. This figure matches the total amount for 2024 to 2025 following the £86 million in-year uplift which was announced on 3 January 2025.

Disabled Facilities Grant funding is paid to local government via a section 31 grant. The Disabled Facilities Grant capital grant must be spent in accordance with an approved joint BCF plan, developed in keeping with this policy framework and the planning requirements.

As in previous years, in 2-tier areas, decisions around the use of Disabled Facilities Grant funding will need to be made with the direct involvement of both tiers of local government (county and district councils) working jointly to support integration ambitions. Local authority allocations for the Disabled Facilities Grant in 2025 to 2026 will be pre-populated in the BCF planning template, with full details of the funding set out in the grant determination letter which will be issued before 31 March 2025.

The current allocations are based on a methodology adopted in 2011 by the Building Research Establishment. A 2018 independent review of the Disabled Facilities Grant recommended that this should be reviewed and brought up to date. Local authorities should be aware that the government intends to review the allocations formula for the Disabled Facilities Grant and consult during 2025 with a view to implementing it as soon as possible after consultation. Implementation of the new formula will be subject to ministerial approval processes.

The government is also reviewing the grant maximum per Disabled Facilities Grant application, currently set at £30,000 nationally.