LaingBuisson: County Care Markets - 2017 Update

This report was produced by LaingBuisson and commissioned by the County Councils Network (CCN). It examines the financial resilience of care home markets across county areas in England, with a particular focus on the challenges posed by prolonged austerity and proposed reforms to long‑term care funding. The report updates earlier analysis and finds that structural weaknesses in the care market have deepened, especially in less affluent county areas.

The report highlights widening fee polarisation between publicly funded and privately funded care home placements, finding that private payers are increasingly subsidising council-funded care. This model is judged to be unsustainable in the long term. Proposed reforms, including a higher asset threshold and a lifetime care cost cap, risk triggering large “payor shifts” from private to public funding, undermining provider viability unless public fees rise significantly. Counties face substantial unfunded financial exposure, while the benefits of reform would be distributed unevenly, favouring non‑affluent areas under threshold reforms and more affluent areas under the care cap.

The analysis concludes that county-scale commissioning remains critical for managing these risks. The report cautions that fragmenting counties into smaller unitary authorities would weaken market management, complicate health and social care integration and increase instability. CCN is therefore positioned as representing authorities operating at the most effective scale to sustain care markets.

Key findings in the report, for county care markets, reveals that:

Private care home fees are over 40% higher than council-paid fees on average.

Around £670m is required to close existing care home fee gaps.

Proposed asset threshold reforms could add around £330m per year in costs

Payor shift effects are highest in northern counties

Care home capacity is declining despite rising demand from population ageing

Recommendations to government include:

Address care home fee gaps to stabilise provider markets.

Fully fund any long‑term care reforms to avoid market destabilisation.

Avoid reforms that intensify payor shift without compensating fee uplifts.

Consider alternative funding models that protect assets more equitably.

Retain county-scale commissioning as the core model for adult social care.

Avoid creating smaller unitary authorities that fragment care markets.

Align social care reform with health integration at county level

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