Last reviewed 24 September 2019

Research by the Institute for Public Policy Research (IPPR) thinktank in partnership with Future Care Capital has found more than eight out of 10 care home beds are provided by profit-driven companies, including more than 50,000 by large operators owned by private equity firms.

The IPPR research, based on analysis of data from the Care Quality Commission (CQC) and Companies House, found that local councils, who were the main providers of residential care in the past, now own 3% of care home beds in England whereas private companies own and run 84% of beds in care homes for older people; an increase on the 82% in 2015. Meanwhile, 13% of beds are provided by the voluntary sector.

This means that for-profit companies own 381,524 of England’s 456,545 care home beds.

According to the research, local councils have almost totally withdrawn from this key area of social care that they used to dominate. It said research has found that larger private providers, particularly those funded by private equity firms, are becoming more dominant in the market. But, it argued, they can be unstable, with the loss of Southern Cross in 2011 and Four Seasons earlier this year.

The report calls on the Government to create the extra 75,000 beds needed by 2030 either through state-run or not-for-profit care homes.

The IPPR is also recommending the creation of a national financial care regulator, OfCare, to oversee the financial regulation of major care providers. Furthermore, the thinktank would like to see all state-funded providers of care to maintain a “safe” level of cash reserves and demonstrate they are paying their fair share of tax in the UK.

IPPR Senior Research Fellow, and lead author of the report, Harry Quilter-Pinner said: “The social care crisis is about more than just money. We need radical reform in who provides care and how they do this.”

However, Care England Chief Executive Professor Martin Green said nationalising the care sector was simply not financially viable. He added: "Moreover there is no evidence to suggest that state-run provision would be better quality. Care England’s research demonstrates that state-run provision is often more expensive. Nationalising the care sector would be hugely expensive and for a fraction of the cost the Government would be much better off investing in the long-term sustainability of adult social care and maintaining choice amongst citizens."

A Department of Health and Social Care (DHSC) spokesperson said: “We expect everyone to be able to access high-quality, safe and compassionate care. Already 84% of providers are rated good or outstanding by the CQC. People who receive care and their families should be able to have confidence that their care provider has a sustainable future.

“We have given local authorities an additional £1.5 billion for social care next year, on top of their existing grants, to continue to stabilise the sector. The prime minister has said that the government will set out plans to fix the social care system in due course.”

The IPPR report, "Who Cares? Financialisation in Social Care", is available at: www.ippr.org