New Report: County Care Markets: Market Sustainability & the Care Act

County Care Markets

County Care Markets

CCN presents the culmination of an extensive research project into the sustainability of local care markets in county areas.

The report County Care Markets: Market Sustainability and the Care Act, reveals the reality facing county care markets prior to part 2 of the Care Act ‘going live’. Not only does the report provide evidence that the social care system is already unsustainably reliant on cross-subsidisation by those people that fund their own care, but also that the Care Act could lead to a significant alteration in the funding model currently keeping many local care markets afloat.

This work was commissioned by a consortium of CCN member councils, facilitated by CCN, with the research and detailed modelling undertaken by LaingBuisson.

  • Download the CCN Report here.

Through comprehensive analysis of care home fees and the use of dynamic modelling our research has found that the ‘care home fee gap’ in counties already stood at £630m during 2014.

An unforeseen consequence of the implementation of the Care Act will see this figure rise to £756m by 2016/17, with the Act indirectly creating further sustainability risks through a process called ‘market equalisation’.

This currently unfunded new burden will continue to grow over time and strangle the supply of care home places by making many homes unprofitable, forcing them to scale back their operations or even close entirely. LaingBuisson estimate the cost of fixing the problem in county care markets alone could reach £3.1bn by the end of the Parliament.

Key Findings

  • Counties have a unique set of financial and demand-led pressures in adult social care.
  • Council spending cuts means self–funding residents in the care homes are pivotal for the financial stability of care homes but this is not sustainable over the long-term.
  • The Care Act’s focus on moving self-funders into the system for local authority supported residents will weaken the long-term stability of the UK care market.
  • Care Act Reforms are accelerating a polarisation of the national care market – meaning the development of a ‘two-tier’ care home system for public and private care users.
  • There are huge potential knock on costs for the NHS, with bed blocking set to spiral due to a lack of supported living places for elderly patients.

Key Recommendations

  • Government engages extensively with sector stakeholders to analyse the social care provider market, devising national and local policy responses and strategies to stabilise the residential and nursing care market in the short, medium and long-term.
  • Government provides additional in-year, targeted, funding to CCN member councils, to reduce the reliance on cross-subsidy in local care markets to achieve market sustainability and maintain local capacity.
  • Government use the 2015 Spending Review to deliver a fair and sustainable funding settlement for adult social care to ensure the medium to longer-term sustainability of local care markets.
  • Government continues to delay the implementation of Section 18(3) Duty to Meet Needs (in care home settings), and ensures that all Care Act statutory guidance and regulations do not lead to further unsustainable pressures in local care markets.
  • The Care Act Impact Assessment is revised, acknowledging that there is now sufficient evidence to suggest the Care Act will lead to a significant new financial burden for CCN member councils from market equalisation. As part of its commitment to fully fund the Care Act, the Government provides an indicative cost and allocates resources according to need as part of the 2016/17 local government funding settlement.


Last updated: 07 July 2015