What does the provider market look like across the four countries?

This explainer looks at the organisations of various kinds that run residential and nursing care homes and services for adults across the four countries of the UK - many of which are struggling to continue in adverse circumstances.

Blog post

Published: 11/05/2020

Key points

  • There are approximately 24,000 registered residential and nursing care homes UK-wide (18,000 and 6,000 respectively)[1], while there are approximately 13,670 domiciliary registered care organisations[2],[3].  
  • The distribution of 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 share 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 and as such all report issues of cross-subsidisation, whereby self-funding individuals are required to pay more for their services than state-funded individuals. Across the four countries, on average an individual funding their care themselves would pay over £200 more per week for the same service in a care home. However, it’s estimated that England has a much more significant proportion of self-funders.
  • In Wales and Scotland, inspection and regulation is 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

Providers of social care in England are registered and regulated by the Care Quality Commission (CQC), which acts as a non-departmental public body for both the health and social care sector. In July 2019, there were around 9,000 registered domiciliary care providers and over 15,500 residential and nursing care providers registered with CQC[4]. Approximately 78% of all adult care services are privately owned and run[5].

The Care Act 2014 set out a legal framework which mandates local authorities and their delivery partners to protect vulnerable adults in receipt of social care from harm[6].  Through the development of Safeguarding Adults 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. These requirements of local authorities and the care regulator are intended to prevent large failures of care, both financially and in terms of clinical quality[7].

The provider market in England is unstable, with a large turnover of providers exiting the market and fewer providers entering. Many providers are being forced to hand back contracts to local authorities[8], and many small-to-medium and high-profile businesses, such as Four Seasons[9], are going into administration. ADASS estimates that, from 2016 to 2018, 1,211 residential care homes stopped delivering services, while only 580 new ones opened[10]. There is a similar turnover in domiciliary care, with approximately 500 organisations entering and 400 exiting the CQC register each quarter[11].

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, and with local authority finance decreasing, this is becoming an increasing concern[12]. 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 – on average, in care homes self-funders pay £760 per week while the local authority pays £520 per week[13]. England has the highest proportion of self-funders of the four countries (see How much care does each country fund?), especially in residential and nursing care.

Wales

The Care Inspectorate Wales (CIW) 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[14], 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[15].

As with the regulation of workers, the regulation of providers and local authorities is legislated in the Regulation and Inspection of Social Care Act 2016. The register currently holds approximately 550 domiciliary care providers and around 1,300 residential and nursing homes[16]. It is estimated that around 72% of all adult care services are run privately[17], while approximately 12% of care homes are run by a local authority[18].

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, to be fully implemented this year[19]. 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.

While self-funders in Wales also cross-subsidise care for local authority-funded individuals as they do in England, estimates of the proportions of self-funders in Wales suggest these are much lower than in England, both in residential/nursing (32%) and domiciliary care (21%)[20]. The average weekly cost of care in a residential care setting is comparatively lower than England, with a cost of around £490 per week for local authority-funded individuals and £710 for self-funders[21].

As in all four countries, providers in Wales are under significant financial pressure, but the care market is distinct from England in that small and single businesses make up to 75% of providers (compared to 62% in England); these have often reported upcoming retirement as another reason for closure[22]. As such, most local authorities have reported shortages in care home placements, provision, and in nursing services[23]

Unlike in England, where the CQC regulates providers and administers a rating system of providers, there is no such mechanism in the Welsh system for assessing variation in quality between providers, although enforcement action is taken by Care Inspectorate Wales if a service does not comply with regulatory requirements or the conditions of their registration[24]. Most local authorities have reported shortages in care home placements, provision, and in nursing services[25]

Scotland

The Care Inspectorate (CI) 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[26]. The Care Inspectorate also inspects local authorities and their associated partnerships deliver care across local areas[27]. The register currently holds approximately 1,400 domiciliary care providers (reported as housing or care at home services) and 1,100 adult residential and nursing home services[28]. 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[29].  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 is 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.

Stakeholders reported similar challenges to England around the instability of the provider market and the cost of cross-subsidisation to self-funders. Estimates of the proportions of self-funders in Scotland suggest these are considerably lower than in England, both in residential/nursing (40%) and domiciliary care (25%). Skills for Care and Development report the weekly cost of residential care for older people to average around £530 a week for local authority-funded individuals and £760 a week for self-funders[30].

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[31]. The Competition and Markets Authority also reports that Integration Joint Boards are developing models to meet needs of the short-to-medium term[32].

The sustainability of the market was noted by stakeholders as a pressing concern – for example, there has been a reduction in the number of care home places available (in part due to the drive to support people to stay at home longer)[33] despite a growth in demand[34]. One of the reasons noted for this was the brevity of the commissioning cycle – being 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[35]. 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 as they do in Wales and Scotland. The register currently holds approximately 500 residential and nursing care providers, and 300 domiciliary care agencies. Just over half (51%) of providers are private[36], compared to 78% in England.

Northern Ireland is the only country of the UK in which there is no adult safeguarding legislation[37] – it appears only in policy[38]. Recent reports from the Commissioner of Older People in Northern Ireland highlight the concern that Northern Ireland 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[39].

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, although estimates of self-funders are the lowest of the four countries. Given that domiciliary care is free, it is unsurprising that Northern Ireland has the lowest proportion of domiciliary care users – only 7%. Residential and nursing care users who self-fund are also few, with estimates at around 11%.  The cost of a week in residential care is approximately £450 for HSCT-funded individuals and £660 for self-funders[40].

A number of provider failures have been widely reported in the media in the past year[41]. The market is felt to be unsustainable and continues to be unstable as private providers face closures for financial or quality reasons. The issues are further complicated by an increase in complex cases requiring care home beds.

References

Suggested citation

Oung C, Schlepper L and Curry N (2020) '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.

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