Care home numbers fall ‘rapidly’ but new homes offering more places

The number of care homes operating in England has fallen “rapidly” since 2012, but new homes opening are offering more places than those closing, research has found.

The Institute for Public Care found new homes registering with the Care Quality Commission tended to be large new builds targeted at self-funders.

It warned that this trend was having an impact on the stability of the market for council-funded residents and said that councils needed to do more to address the situation.

The research found that there are 1,400 fewer care homes than there were five years ago, and homes have closed in all regions in England. In April 2012 there were 17,801 care homes, but this has reduced to 16,392, a decline of 8%.

Using data from the CQC, it found that the average size of a home opening was 37 beds, while the average size of one closing was 29 beds.

‘Spiral of decline’

The report, which analysed the care home market before and after the introduction of the Care Act 2014, said that self-funders tend to pay higher care fees than council-funded residents even when living in the same home.

This price difference has been referred to as a “cross-subsidy”, with the assumption that the rates paid by councils impact on those for self-funders.

If fewer self-funders live in homes that support both types of client, then this affects the balance of “cross-subsidy”, therefore placing providers at greater risk of financial difficulty.

The report added that “some care homes will see fewer self-funders and higher staff costs due to increases in the National Living Wage, and there is a danger that if providers cut back on other costs, such as maintenance, then the home looks shabbier, self-funder numbers decline even more, leading to a spiral of decline.”

It echoes the findings of a recent study by the Competition and Markets Authority, which found that little expansion of the market is focused on council-funded clients.

Homes for older people

The IPC, based at Oxford Brookes University, also found that the total number of care home beds specifically for older people had increased by 4.3%, from 387,485 in April 2012 to 404,163 in April 2017.

Over the same period, the report claimed, the potential demand for beds for older people increased by much more – the number of people aged 85 and over rose by 16%.

The number of care homes supporting this client group has, however, “all but stayed the same”, the report found, and the long-term trend of increasing numbers of nursing home beds and decreasing numbers of residential beds has come to a halt.

“Many councils have often stated that they want, and have been actively working towards more nursing home provision,” the report said.

“However, the increase in nursing home beds slowed in April 2015 and the provision of nursing home beds declined by 1,262 beds in 2016-17.”

‘Market shaping’

The report made recommendations on how councils could better fulfil their Care Act duty to ensure local care markets are sustainable. These included developing more trusting relationships with providers, having a better understanding of the local and regional care market, and better managing demand on social care services.

The IPC said that councils often lacked a clear strategy for managing demand, particularly for older people’s services, and had insufficient data and understanding about the impact of their approach. It added that the best organisations were using preventative interventions that assisted people to “need less care”.

The report concluded that “councils must be prepared to be bolder and do things differently” in order to tackle the difficult market conditions.

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