From the beginning of 2015, I have been monitoring and reporting on the openings and closures of care homes for older people in England and have repeatedly brought bad news that there are around twice as many closures as there are openings. Luckily no-one has shot this messenger. Not yet.
Between January 2015 and the end of September 2019, 602 care homes have opened, but during that same period 1,221 have closed. The closures have accounted for nearly 38,000 beds lost – that is around 10% of the total number of beds currently available.
Assuming these homes had an average 75% occupancy level, this would mean that around 28,000 vulnerable older people will have had to find new accommodation over the last five years.
One very slight consolation is that over 600 homes have opened in this time and they are, on average, larger than those that have closed, meaning that 28,750 new beds have been generated. However, this still shows a net loss of around 8,900 beds, while the population of people aged over 75 in England has grown by half a million – or 11% – during that period.
The 1,221 homes that have closed since 2015 are actual closures and not what CQC would refer to as ‘De-Activations’, which total over 3,300 since the beginning of 2015. The 2,000 or so that bring us up to this figure entail change of ownership or legal entity.
It is interesting to see that not all closures were lost forever, and a few subsequently reopened under new ownership at a later date. Seven homes re-opened within a year, 13 reopened within one and two years, and two reopened three and four years after closure respectively. But 20 homes that opened since the start of 2015 have since closed.
The Office for National Statistics recently reported that the number of people aged 85 and over, who account for about half all care home beds, will double in 25 years’ time. This doubling in numbers has been forecast since I started reporting, so it is not exactly breaking news, but we still aren’t seeing much of an increase in the number of beds overall. Something needs to be done to turn this trend around and make sure supply matches demand in the coming years.
The where and why
Way back in 2002, the Personal Social Services Research Unit (PSSRU) published a report, Care Home Closures: The Provider Perspective and their headline reason for the 20 closures they studied was, ‘All but one of the homes (which was closed due to enforcement action) closed either to avoid further losses, or due to the business earning an inadequate return now or in the future.’
This will still undoubtedly be the case, although with the CQC rating system in place it is now more than one in three that has closed with an Inadequate rating, not the one in 20 homes that ‘closed due to enforcement action’.
Out of the 1,221 homes that have closed since 2015, 338 did so without being inspected under the CQC ratings system that was introduced in October 2014. Of these, only 42 were closed after March 2016 when the CQC had planned to have all services inspected (a target that it missed).
Of those who closed having had an inspection, around two thirds were ‘non-compliant’ – 37% were rated Inadequate and 29% Requires Improvement.
It is perhaps easy to understand why the Inadequate homes closed but there are currently nearly 2,000 homes trading with a Requires Improvement rating. Are some of these also likely to close as their occupancy and income suffers because prospective residents opt for their competitor homes with Good ratings?
If two thirds of closures since 2015 were non-compliant, this also means that one third of homes that closed were rated Good (two homes were in fact rated Outstanding), so we must assume commercial pressures as the reason for closure.
At CSI, we base estimated supply levels on the number of beds per thousand people aged 75 and over in the area. This age group, according to 2011 research by Bupa and PSSRU, accounts for 90% of all care home beds. Looking at this data, we can see that half of the Good homes that have closed since 2015 were located in local authorities with higher than average supply levels.
We can assume that those homes in areas with high levels of supply and increased competition would have probably suffered with lower than average occupancy levels. Another problem with too many care homes in one area is likely to be the ability to recruit and retain care management and staff.
Of the closures, half of those that were rated Good had 25 beds or less, and so the economies of scale may have played a part in the closure, where a change of use for the location was a better financial option for the provider.
It is certainly not a case of boom in the ‘affluent south’ and bust everywhere north.
Across the 150 local authorities in England, only 40 have gained beds, and 15 broken even, since 2015. Most regions have lost beds overall. The biggest losers since 2015 have been London, the North East and the South West with net losses of up to 6% of beds. Yorkshire and The Humber fared slightly better with a net loss of around 3% of their beds, and the East Midlands, North West and South East had net losses of between 1% and 2%.
Only two regions, the East of England and the West Midlands, have added to their number of beds, but only nominally at less than half a percent.
When we look at the national average of a third of homes closing with a Good CQC rating, we can see that there have been higher levels of closures in this group in the East Midlands and the North East, both around 42%. However, with a potentially interesting East/West split, this figure stands at around 25% in the West Midlands and the North West.
It goes without saying that local authority contributions are lower than they should be across the board, but there was little difference in fee levels paid by the local authorities that gained beds compared to those that lost them.
According to the Improved Better Care Fund (iBCF): Provider fee reporting Quarter 2 2018-19, the eight local authorities that have grown their number of beds by 10% or more were paying, on average, £696 a week for a care home with nursing bed and £649 a care home bed.
At the other end of the scale, 36 local authorities have had a greater than 10% net loss in beds over the last five years, and the average weekly contributions from these local authorities were £665 and £625 respectively, so around 4% lower than the best performing authorities.
A shift in trends
Something perhaps unexpected is that it seems as though if your care home does not offer dementia care, you have greater chance of closure.
Whilst locations that are not providing dementia care (i.e. those homes that have not ticked Service user band – Dementia on their CQC registration) account for around 30% of all care homes, they accounted for 46% of all closures. Since 2015, there have been 660 closures of care homes not offering dementia care compared to only 200 openings, indicating a declining sector.
On the other side of this, with openings matching closures at around 220, the nursing dementia sector has in fact grown by around 3,750 beds, but the residential dementia sector has seen just 180 openings and as many as 438 closures, losing around 4,660 beds since 2015.
This increase in beds in nursing dementia care means that care homes with nursing overall have lost just a few hundred beds in the last five years, while the residential sector has lost heavily.
Looking at the size of a provider has also uncovered some interesting trends. Larger providers, with 10 or more care homes, make up around 30% of all homes, and 40% of all beds. They also account for 28% of openings and only 20% of closures but have still lost around 1,000 beds overall.
Out of the 950 different large providers that have closed at least one home in the last five years, 759 no longer appear on the CQC register at all.
Survival of the fittest is a factor in all aspects of life and business, and there is no doubt that closures will include converted properties that were, or were becoming, unfit for purpose and are being replaced (but not in the same local area) with shiny new purpose-built units.
And 8,272 beds were lost in care homes that were rated Good, which is almost as much as the 8,900 beds that were lost overall. This should not be happening.
Care home closures can shatter lives; the owners, their employees, residents and their families, and of course those people struggling to find a bed when local homes close down.
Local authorities need to take control of what is going on in their domain, with social services working alongside planners to ensure that planning consent is not given where there is already an oversupply of beds, and that applications are fast-tracked where there is a proven need.
What is happening to care homes where you are? What impacts on your decision to remain open or to close a home? Let us know in the comments section below.