Private Owners of England's Care Homes Need Monitoring, Regulator Says
The CQC says large private owners now hold around one in seven care homes, while home care fragments and councils struggle to buy places for people on state help.
By AXY Health Desk ·
Key points
- The CQC says the five biggest care home owners have increased their share of the market by 26% in two years, and now own around one in seven homes in England.
- The regulator says US property investors are driving the trend, and that it could undermine a universal care service and lead to higher prices and lower quality of care.
- Home care is fragmenting into many small providers, nearly a third of which care for four or fewer people, while small care homes have declined by a quarter in some categories over 14 years.
- Councils face difficulty buying care for people on state help, as some providers increasingly turn to self-funders.
The regulator for health and social care in England has warned that private companies buying up care homes for older people could undermine the government's ambition to create a universal care service. In its annual report, the Care Quality Commission, known as the CQC, says a growing share of the care home market is now owned by large firms. It links that shift to interest from US property investors.
Chris Badger, the CQC's chief inspector of adult social care, said the reshaping of the market was happening “largely by accident rather than design.” He said it was important the market was “shaped around what’s best for people.” The CQC is not arguing that private money has no place in care. Its message is narrower. The way ownership is changing needs watching, because good outcomes for residents are not guaranteed.
For families, the question is practical. When a parent needs a care home, they usually want a place nearby, with reliable staff, at a price they can manage. Who owns a home helps shape how fees are set, how staffing is decided and what happens if a business decides to sell or change the services it offers.
How Five Owners Came to Hold One Home in Seven
The CQC says the five biggest care home owners have increased their share of the market by 26% in the last two years. Between them, they now own around one in seven homes in England. The regulator says this growth has been driven by interest from US property investors.
A care home is both a building and a business. An investor may own the property, while a separate company runs the care inside it. When a large group takes over, that arrangement can change who makes decisions, who pays for repairs and staffing, and who is accountable if standards slip. The CQC's concern is about the overall scale of ownership and what it means for price and quality, rather than any single deal.
Large owners can bring benefits, and the CQC accepts that there could be some. A bigger group may be able to spread back-office costs, buy supplies in bulk and move staff between sites when one home is short. Those advantages are not the same as better care, however. The regulator's concern is that the trend can lead to higher prices and a reduction in the quality of care. Both outcomes would fall most heavily on residents and their families.
That is why the CQC says the trend needs to be monitored. Regulators say they are “watching carefully” in case it threatens the government's plans for a National Care Service. The phrase is cautious, but it signals that the regulator sees the change as significant enough to track over time.
Why Concentration Could Hit Residents' Choices
Care homes are where many older people end up when they can no longer live safely alone. If a handful of owners control a growing share of beds, the options in a local area can shrink. A council or family may have fewer alternatives if one home closes, raises its fees or falls short on standards. For someone already frail, moving home is a serious upheaval, so a lack of nearby choice matters a great deal.
The CQC's worry is not ownership alone. It is what happens to price and quality once the market becomes more concentrated. That distinction matters for how the government might respond. A rule aimed at who owns a home would look very different from one aimed at fees, staffing or standards of care.
Home Care Breaks Into Many Small Providers
Home care is different from life in a care home. It is support delivered in a person's own house, helping them wash, dress and manage daily tasks. The CQC says this part of the market has become more fragmented, with a greater number of smaller providers. In other words, while care homes are being bought by larger groups, home care is spreading across many small firms.
The regulator says this could create inefficiencies. Nearly a third of these services provide care to four or fewer people. A business with only a few clients has less room to absorb a sudden staff absence, pay for training or carry the cost of compliance. For the person receiving help, that can mean longer waits for a visit, uneven quality or extra strain on the staff who remain.
The two trends pull the market in opposite directions. One concentrates care homes in fewer large hands. The other splits home care into very small units. Both change how a person gets help, and both affect who is responsible when something goes wrong.
The Small Care Homes That Are Disappearing
Small care homes have always made up a tiny share of the care home market, the CQC says. Over the last 14 years, though, their numbers have fallen significantly. The steepest drop has been among homes that combine care with nursing support. Those have fallen by a quarter.
The regulator judges smaller homes to be important for providing specialist and personalised care. A small home can get to know each resident well and adapt to needs in ways a large operation may find harder. When such a home closes, residents who need closer support can have fewer places to go, and they may have to move further from family and friends.
Badger linked the reshaping of the market to economic pressure, and to the problems some councils have in buying services for people who rely on state-funded care. Taken together, the picture is of a sector being reshaped over time by forces that were not planned as a whole.
Councils Squeezed by Self-Funders
Care is paid for in two main ways, as the CQC describes the system. People either pay for their own care, which is known as self-funding, or, if they are among the poorest, the state helps pay their costs. The CQC says the funding system remains fragile.
Trouble starts when providers begin to prefer self-funders. In some areas, the CQC says, providers are increasingly turning to people who pay for themselves. That makes it harder for councils to buy the care they need for people who rely on state help. In England, councils have a legal duty under the Care Act 2014 to meet people's care needs, so a shortage of affordable places puts real pressure on them. If a council cannot buy a place at a price it can afford, the person it is trying to help may wait longer or be placed further from home.
This is where the private market and public spending meet. If providers can earn more from private payers, the incentive to accept residents who depend on state funding may weaken. Badger's comments point to this tension. The market is being shaped partly by how much councils can afford to pay, and the people most affected by that did not choose the market at all.
Can a National Care Service Work With Private Owners?
Badger said the government's renewed focus on social care was welcome. The report notes that Andy Burnham made social care one of his key priorities when he became prime minister. The CQC's warning therefore lands in the middle of a live debate about how care should be organised in England.
The regulator's language centres on monitoring, shaping the market and watching for harm. Whether the government turns those warnings into rules or funding decisions will determine whether the concerns remain a warning or lead to change. The next test is whether the renewed focus on social care gives councils more ability to buy care at sustainable prices, and whether it addresses the risks to price and quality that the CQC has raised.
For families, the next few years may be judged in fairly concrete terms. They will look at fees, staffing levels and whether a local bed is still available when a parent needs one. For the people living in those homes, the question is not who owns the building. It is whether the care they receive is good, and whether the place they live stays open.
Questions and answers
Why is the CQC concerned about private companies buying care homes?
The CQC says the trend could undermine the government's plans for a universal care service and could lead to higher prices and a reduction in the quality of care. It says the trend needs to be monitored.
How many care homes do large firms own in England?
According to the CQC's annual report, the five biggest care home owners between them own around one in seven homes. Their share of the market has risen by 26% in the last two years.
Why does the CQC say councils are struggling to buy care?
The CQC says the funding system remains fragile. In some areas, providers are increasingly turning to self-funders, which makes it harder for councils to buy care for people who rely on state help.
What happens next with the CQC's warning?
The CQC says it is watching the trend carefully. Whether the government turns these warnings into rules or funding decisions, and whether it gives councils more power to buy care at sustainable prices, will decide if the concerns lead to change.
Topics: Care Quality Commission, care homes, England social care, US property investors, National Care Service, home care, Chris Badger
Sources: BBC Health