Ask a "customer" how they would like their care package delivered and the chances are they bother less about the source of support than the fact that it is adequate and – where charges apply – affordable.

The theory behind the new "self directed packages" approach was that choice would be king; people in need of care and support would be given notional control of their budget and select services best suited to their individual needs.

In an ideal world, a laudable aim. In an age of deepening austerity and crisis an increasingly hopeless fantasy. The brave new world now unfolding no longer consists of optimum care and optimum choice, but a desperate rearguard action to maintain basic levels of provision.

Inevitably, with the irresistible force of squeezed budgets meeting the immovable mountain of relentlessly increasing demand, something has to give. In strategic terms it's too often the goal prioritised by the Christie Commission report of an emphasis on prevention – ironing out social inequalities and reducing future demand.

As the Audit Commission's recent report on social care provision noted: "As budgets come under growing pressure, there are signs councils are concentrating resources on people who need intensive support. There is a risk people who need a small amount of support may not get the help they need to live independently- this may lead to greater cost over the longer term."

But looking at those pressurised budgets, what councils inevitably do is seek a shorter-term fix to plug the gaps. Their spending plans for social care in the next financial year make grim reading, from across-the-board cuts of 5%, to arbitrary caps on hourly rates for all third and independent sector provision.

This presents an already bruised and battered voluntary sector with several dilemmas, as they try and trim already anorexic budgets to hang on to contracts, whilst endeavouring not to diminish the level of care they provide.

Increasingly these sums just can't add up. They argue they've long since removed anything which could be described as fat in their service delivery, and are fighting to keep the bones intact.

The Coalition of Care and Support Providers collected information on pay rates under a Freedom of Information request from all Scottish local authorities. They found that at least 50 external care services were being funded by councils at a rate of less than £10 an hour, a payment they describe as completely inadequate to deliver complex services given that they have to cover salaries and myriad other overheads.

They found the highest rates were normally in in-house services, some of which were costing up to 100% more than similar externally provided ones. To add to their frustration, they look enviously on as councils implement the living wage initiative, obviously to be welcomed, but only a pipe dream for external suppliers.

But it's not just what they see as the inequity between in-house and external rates for the same job, but the way the new contracts are being drawn up. Traditionally councils bought blocks of care and support from their outside providers, and paid for them upfront.

That's changed to what's known as "cost and volume". It means the council pays for what it is likely to use. Sounds sensible. But if they use less it's the provider who still picks up the tab for the overheads.

And there's a double whammy here: if providers try to build up contingency funds to deal with these uncertainties, councils are likely to demand any "surplus" is returned. But there's no reciprocal agreement for councils to shore up third sector deficits caused by their not needing what they thought they would.

It's for similar reasons that some drop-in and day centres are disappearing; after all it costs the same to keep them open regardless of the number of users.

Nobody should underestimate the difficulties councils are facing trying to balance their own books. And with the next round of welfare cuts about to make thousands more vulnerable, nobody should imagine that the tensions between types of providers are likely to be resolved any time soon.

But it's because of the growing nature of the crisis in social care that there needs to be a fair and thorough examination of the true costs of decent care and support, and what the impacts of contracts are on external providers.

This is not a paper exercise; this is about real people with real and alarming levels of need.

The choices made about who provides the care should start from the premise that the rate for the job should fairly reflect the cost of provision regardless of whether that comes from within the council or from elsewhere.

Christie also talked about "maximising scarce resources by utilising all available resources from the public, private and third sectors, individuals, groups and communities".

We can only maximise these resources if all the players not only have the same goals, but the same tools to address them.

For we're not just talking about services becoming poorer, or scarcer here. We're looking at complete closures when external providers just can't keep their show on the road any more.