Key points
- There are approximately 17,000 residential and nursing care homes across the UK (12,000 and 5,000 respectively) 1 , and approximately 10,113 organisations providing domiciliary care. 2
- The distribution between public, private and voluntary providers, as well as their size, varies considerably across the four countries. England has the most privately owned providers.
- The four countries have shared issues around the stability of the market for care. Across the UK there is a high turnover of care providers, with many being forced to hand back contracts for services.
- Many providers across the UK have a mix of self-funded and state-funded service users. All report issues with 'cross-subsidisation', where self-funders are required to pay more for services than those receiving state funding. 3 A 2017 UK-wide study found that this could be as much as £200 more being paid by self-funders, though more up-to-date evidence is needed.
- In Wales and Scotland, inspection and regulation are undertaken by a dedicated regulator for social care and other social services. In contrast, the regulator in England and Northern Ireland also has responsibility for health.
England
Organisations providing social care services that fall within the Care Quality Commission’s (CQC) definition of regulated activities are required to register with the CQC, which acts as a non-departmental public body for both the health and social care sector. 4 As of January 2023, there are 11,544 registered domiciliary care services and 14,970 residential and nursing care services registered with the CQC. 5
There had previously been no regulation of local authority in England like there is in Wales and Scotland. However, the Health and Social Care Act (2021) introduced a new duty for CQC to assess local authority performance from 2023/24. 6
The Care Act 2014 set out a legal framework which mandates local authorities and their delivery partners to protect people who draw on social care from harm. 7 Through the development of safeguarding adult boards, local authorities must (among other things) work with the CQC to investigate and address concerns of poor quality among organisations delivering care. The Care Act and the associated Market Oversight Regulations 2015 further set a legal duty on CQC to monitor the financial performance of large social care providers, and to warn and support local authorities where significant concerns are raised. Both duties on local authorities and the care regulator are intended to prevent large failures of care, financially and in terms of clinical quality. 8
There are many issues facing providers in England. Providers cite the fact that the fees paid by local authorities are frequently lower than the actual costs of providing the care as a key reason for their financial struggles. With local authority finance budgets tightening, this is becoming an increasing concern. 9
It is common practice for providers of care to charge self-funders more in order to subsidise local authority-funded people for the same care. In 2022 across Great Britain, nursing care fees paid by self-funders were on average £1,329 per week, versus £658 per week paid by local authorities; and £983 per week for personal care for self-funders, versus £609 per week paid by local authorities. 10 More recent empirical evidence of this cross-subsidy is limited. However, the government plans to eradicate the cross-subsidy by requiring councils to pay providers higher fees for care – the fair cost of care policy – and are in the process of being implemented.
Moreover, the provider market in England is unstable, with a large turnover of providers exiting the market and fewer providers entering, and many providers are being forced to hand back contracts to local authorities. 11 The CQC’s State of care report 2021/22 echoed similar trends, but also noted that occupancy has been increasing (albeit below levels seen during the pandemic). 12 Coupled with issues around workforce retention, the social care system is struggling to provide sufficient capacity to meet demand, with increasing levels of unmet need and a higher burden on informal carers as a result. 13
In 2021, the Department for Health and Social Care announced the introduction of a Market Sustainability and Fair Cost of Care Fund. The fund was intended to redress issues with cross-subsidisation by supporting local authorities to move towards paying a fair fee for care, and to prepare the sector for the implementation of charging reform (now delayed). In February 2023, local authorities were required to publish cost of care exercises for their residential and nursing care markets (65+) and domiciliary care markets (18+), alongside Market Sustainability Plans in March 2023. 14 2022/23 funding has been maintained for subsequent years and combined with the new Market Sustainability and Improvement Fund, through which local authorities are able to further move towards paying sustainable fee rates. 15
Wales
Care Inspectorate Wales undertakes the registration and regulation of social (care) services in Wales, for both adults and children. In practice this means the agency also regulates services such as adoption or children’s day care 16 , but does not regulate health services, unlike the CQC in England and the RQIA in Northern Ireland. It also has the responsibility to inspect local authorities against their provision of care services in line with the principles of the Social Services and Wellbeing Act. 17
Similarly to England, the Social Services and Wellbeing Act creates a legal framework for local authorities to safeguard adults (and children) under the safeguarding boards. These are supplemented by the 2019 Wales Safeguarding Procedures. 18 The duties conferred to local authorities by these bills are intended to minimise the potential for social care service users to encounter harm in the receipt of their care.
Unlike in England, where the CQC provides a rating system of the care services it regulates, there is no such mechanism in the Welsh system for assessing variation in quality between providers. While the introduction of quality ratings had been planned for April 2022, this has now been delayed. Silent delays will be introduced from April 2023, and full published ratings available from April 2024. 19 Most local authorities have reported shortages in care home placements, provision, and in nursing services.
As with the regulation of workers, the regulation of providers is legislated and local authorities in the Regulation and Inspection of Social Care Act 2016. In January 2023, there were 1,017 adult care homes 20 and and 689 supported living domiciliary care services registered with the CIW. 21 Evidence from Wales Fiscal Analysis in 2020 suggested that locally authority-run care homes accounted for fewer than 9% of the total number of care home places available in Wales. 22 More recent evidence on the number of local-authority owned providers is limited.
While self-funders in Wales also cross-subsidise care for local authority-funded individuals as they do in England, there is limited recent evidence around the size of this cross-subsidy. In 2018, the average weekly cost of care in a residential care setting was comparatively lower than England, with a cost of around £490 per week for local authority-funded individuals, against £710 for self-funders. 23
A national commissioning board has been set up to support the sector to commission care services, with representation from the health and social care sectors, and provide a strategic vision and leadership at a national level. 24 The rebalancing care and support white paper also committed to implementing a national framework for care and support with the establishment of a national office to drive its progress. 25
As across all four countries, providers in Wales are under significant financial pressure, but the care market is distinct to England in that small and single businesses make up to 75% of providers 26 (compared to 80% in England, as of 2018). 27 These often reported upcoming retirement as another reason for closure. 28 8% of residential care home providers are owned by large groups. 29 As such, most local authorities have reported shortages in care home placements, provision and in nursing services. 30
With the growth of increasingly complex health needs, local health boards are increasingly procuring services from social care providers. 31 The Welsh government has recognised challenges with local authority commissioning of social care, due to downward pressures on council budgets and capacity as a result of austerity and a complex market. 32
Scotland
The Care Inspectorate is responsible for the registration and regulation of care providers in Scotland. It does not regulate health care services, unlike the CQC in England or the RQIA in Northern Ireland. 33 The Care Inspectorate also inspects local authorities, and their associated partnerships deliver care across local areas. 34 The register holds approximately 1,190 domiciliary care providers (reported as adult day care or care at home services) and 1,044 adult care home services, as at September 2022. 35 Most providers in Scotland are in the independent sector (including voluntary and private), and this is particularly the case for residential care among older people. 36 The voluntary sector provides the greatest number of services and employs the majority of the workforce in domiciliary care.
Social care users are protected against harm in the receipt of their care under the Adult Support and Protection Act 2007. As in England, this means in practice that local authorities are legally obliged, with appropriate powers, to investigate reports of harm to service users in collaboration with the Care Inspectorate. This was being improved under the Adult Support and Protection Improvement Plan 2019-22. These bills are intended, among other things, to reduce occurrences of failings of care.
The regulation and inspection of social care in Scotland is being reviewed under the Independent Review of Inspection, Scrutiny and Regulation due to report in summer 2023. 37 The review will also consider what regulatory changes will be required under the new National Care Service. 38
Stakeholders reported similar challenges to England around the instability of the provider market and the cost of cross-subsidisation to self-funders. Skills for Care and Development report that, in 2018, weekly cost of residential care for older people averaged around £530 a week for local authority-funded individuals, against £760 a week for self-funders. 39
To address some of these issues, the Convention of Scottish Local Authorities, Scottish Excel, the Coalition of Care and Support Providers and Scottish Care have attempted to model the costs of care to help local authorities more accurate prices for care home places under the National Care Home Contract. This is a distinct feature of the Scottish system – the implementation of which has been recommended to the other UK countries by the Competition and Markets Authority. 40 The Competition and Markets Authority also reports integration joint boards are developing models to meet needs of the short to medium term. 41
From 2022/23, standard rates in the National Care Home Contract for publicly funded users are £832.10 a week for nursing care, and £719.50 for residential care. 42 43 This includes a requirement for contracted providers to pay front-line care staff a minimum of £10.50 an hour and a minimum pay increase of 3% for registered nurses in line with Agenda for Change commitments. 44 45
The sustainability of the market was noted by stakeholders as a pressing concern, for example with a reduction in the number of care home places available (in part due to the drive to support people to stay at home longer) 46 despite a growth in demand. 47 One of the reasons noted for this was the brevity of the commissioning cycle of only one year, making long-term planning of service delivery increasingly difficult.
Northern Ireland
The Regulation and Quality Improvement Authority (RQIA) regulates both health and social care organisations in Northern Ireland, and requires all social care providers to be on a register. 48 As all responsibility for social care is held by health and social care trusts, local authorities do not fall under the remit of the RQIA like they do in Wales and Scotland. The register currently holds approximately 500 residential and nursing care providers, and 300 domiciliary care agencies, as at October 2022. 49
Northern Ireland is the only UK country where there is no adult safeguarding legislation 50 – it appears only in policy. 51 Recent reports from the Commissioner of Older People in Northern Ireland highlight the concern that it is lagging behind the other countries in its protection of adult social care users. It is argued that health and social care trusts should, like local authorities in England, Scotland and Wales, have some legal powers and duties to investigate reports of harm to social care users. This comes in the wake of large scandals of care failings, for example at Dunmurry Manor, which has increased the salience of the issue among stakeholders and the public. 52
Charging higher rates to self-funders to subsidise state-funded individuals appears to be common practice in Northern Ireland as well as the other countries. The cost of a week in residential care is approximately £450 for HSCT-funded individuals, against £660 for self-funders (2018 figures). 53
Only 14% of domiciliary care visits lasted over 30 minutes, with 55% of visits between 15-30 minutes and 31% of visits under 15 minutes. 54 A pilot for a new model of domiciliary care is currently underway in South Eastern HSCT. This model aims to encourage greater integration between health and social care by giving providers responsibility for specific regions enabling them to respond and adapt to local needs. 55 If the pilot’s evaluation delivers promising results, the Department hopes to expand this geographic model to a national level. 56 In 2021, 85% of residential, nursing and supported living services were provided by the independent sector. 15% were provided by the statutory sector, which was highest in supported living settings. 57
The regional Health and Social Care Board (HSCB) sets the fees for state-funded residents of care homes – if health and social care trusts are unable to offer a place in a care home that operates at the regional rate, they are obliged to pay a higher fee. In 2021/22, fees were as follows:
| Residential care homes | £ per week, rounded, 2021/22 |
| Elderly | 610 |
| People with learning disability | 610 |
| Nursing care homes | |
| People with physical disability | 822 |
| People with learning disability | 765 |
| All other people | 765 |
In 2021, the Department approved an uplift to the regional fee for domiciliary care to £18 per hour. 58
It is felt the market is unsustainable, and continues to be unstable as private providers face closures for financial or quality reasons – further complicated by an increase in complex cases requiring care home beds. 59
Suggested citation
Dodsworth E and Oung C (2023) 'What does the provider market look like across the four countries?, in Adult social care in the four countries of the UK. Explainer series, Nuffield Trust.
Adult social care in the four countries of the UK
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