England's care regulator has warned that rapid consolidation of the care home market by large firms, including US property investors, threatens the government's plan for a universal National Care Service.
The Care Quality Commission's annual report found that the five largest care home operators increased their market share by 26 percent over two years and now own one in seven homes. The CQC cited concerns that this concentration could lead to higher prices and reduced quality of care.
The regulator identified several structural problems. Nearly a third of at-home care services now support four or fewer people, creating inefficiencies. Over 14 years, the number of smaller care homes has fallen significantly, particularly those offering nursing support, which dropped by a quarter. In contrast, fewer smaller homes exist to provide specialist and personalized care.
Chris Badger, the CQC's chief inspector of adult social care, said the market was being reshaped "largely by accident rather than design" through economic pressure and councils' difficulties purchasing state-funded care. He called for the market to be "shaped around what's best for people."
The funding system remains fragile. People either self-fund care or rely on state assistance in lower-income cases. Providers increasingly prioritize self-funders in some areas, making it harder for councils to purchase services for those dependent on public funding.
Prime Minister Andy Burnham has made social care reform a priority. The Health Foundation think-tank said the CQC report "lays bare the massive challenges" facing the government and called for councils to receive adequate funding, skills and leadership to shape services around people's needs.
Care England, representing providers, said the government and regulators must take action to support smaller homes. Its professor Martin Green cited employer national insurance contributions, inflation and rising energy costs as making smaller operations unviable. Without stronger funding settlements, he said, closures of smaller homes would continue.
The Department of Health and Social Care acknowledged the report demonstrated "the scale of the challenge this government inherited" but reaffirmed its commitment to overhauling social care.