Market shaping in adult social care

September 6, 2017

A new report into market shaping in adult social care has been published by IPC and Oxford Brookes University.

Market Shaping in Adult Social Care analyses changes in the care home market in England before and after the Care Act (2014) and summarises experience from IPC’s work on market shaping.

It says that the last five years have seen a reduction in the number of residential and nursing homes operating in England, with 1,400 fewer homes. The long-term trend of increasing numbers of nursing home beds and decreasing numbers of residential home beds has come to a halt. It highlights the fragility of the care home market and notes that the homecare market is equally under pressure. The IPC says that councils must be prepared to be bolder and do things differently in order to shape the market.

In 2016, IPC undertook a market shaping review to help commissioners and providers work together. It highlighted good practice in market shaping and where progress was being made. However, since then there have been repeated reports of the sector being in crisis. This led the IPC to review the care home market from 2012 to 2017.

Key headlines are:

  • The total number of beds in care homes has fallen by 0.8%, or 3,769 beds between April 2012 and April 2017.
  • There are large regional variations, with a 3.4% increase in the West Midlands to a 6.9% decrease in London.
  • The increase in nursing home beds stopped in April 2015, leading to there being 3,644 fewer nursing beds in April 2017 than April 2015.
  • The total number of care homes has fallen by 7.9%, or 1,409 homes between April 2012 and April 2017.
  • The average size of a care home is increasing with new homes having, on average, 37 beds in 2016-17. This is compared to an average of 29 beds in care homes that closed over the same period.
  • Nursing homes are bigger than care homes, with 52 beds for average nursing homes in April 2017, compared to 28 beds for residential care.
  • The total number of beds in care homes for older people has risen by 4.3%, or 16,678 beds, between April 2012 and April 2017.
  • The number of people aged 85 and over has also risen, by 16.2%, or 197,994 people, between April 2012 and April 2017.

The report into market shaping in adult social care concludes that there are fewer, but on average larger, care homes and it is the smaller homes that are closing; whilst entrants to the market are often large new builds targeted at self-funders. The IPC says that this is linked to achieving viability through economies of scale, which has had an impact on the financial stability of the market for state-funded residents.

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