Market worth £27.3bn as fees soar
The social care crisis in Britain is set to deepen after analysis showed the care home sector is worth £27.3bn and that more than £1tn of housing equity is held by people who may need care home admission. The LaingBuisson Care Homes for Older People UK Market Report found that average weekly fees for self-funded nursing home residents have reached £1,572, while residential care costs £1,271 a week.
The report, the 36th edition, warns that the top 10 independent care home operators—each generating between £250m and £913m in annual revenue—are expected to see profits grow as demand from an ageing population rises. It also found that while the market's value has increased by 25% over the past three years, only 3% of that rise was due to increased demand. The remaining 22% came from fee inflation, driven by labour cost inflation, the National Living Wage, and the rise in Employer National Insurance introduced by former Chancellor Rachel Reeves.
Independent sector dominates care provision
Nine in 10 residents live in homes run by the mainly for-profit independent sector, according to the report. Self-funders account for 45% of beds but 55% of total market value. Demand for care home places is projected to grow by 37,000 beds—a 9% increase—over the next decade, with all additional capacity expected to come from independent providers.
The report states: “Market fundamentals remain strong. Demographic ageing is expected to drive continued growth in demand for the remainder of the century - bar the emergence of truly game-changing technologies, such as a cure for Alzheimer’s. While the willingness and ability of many public sector commissioners to pay sustainable fee rates remains a major concern, future demand from private payers looks very solid, buoyed up by £1tn plus of housing equity in the hands of the generation of people at risk of care home admission, and no expectation of any significant decline in the rate of owner-occupation for at least the next three decades.”
Nursing and residential care costs
Nursing care, which provides 24/7 support from live-in registered nurses for people with ongoing medical needs or complex conditions, now costs an average of £6,288 a month. Residential care, which helps with daily tasks such as washing and dressing but does not include round-the-clock medical support, has average monthly fees of more than £5,000.
Prime Minister Andy Burnham has promised to overhaul the sector with plans for a new national care service, warning that without reform the NHS will collapse.
Decades of failed reform
The social care emergency has been building for decades. The explosion in demand and capacity in the 1980s and early 1990s was fuelled by unrestricted access to public funding under the Income Support regime. Publicly funded demand was brought back under control after the 1993 community care reforms, which introduced needs assessment and stringent tests, squeezing excess demand out of the system.
Independent sector capacity stood at 448,200 beds in March, with 389,000 (87%) occupied. Total demand is expected to increase by a further 7%—an additional 37,000 occupied beds—over the coming decade, with all additional demand expected to be fulfilled by the independent sector.
Over more than 30 years, there have been two Government commissions, one government-commissioned review, three independent commissions, five white papers and 14 parliamentary committee inquiries into social care reform. The latest review, by Baroness Casey, is set to be published next year.
Reaction to the report
Health and Social Care Committee Chair Layla Moran MP said: “This starkly shows how families’ assets are increasingly being drained by a system that is becoming ever more expensive, with little sign of improvement in quality.”
Sarah Woolnough, chief executive of The King’s Fund, added: “Anyone who has followed social care reform will recognise a Groundhog Day pattern. A decades-long failure to act, with attempts to fix the system now resting in Westminster’s graveyard of good intentions. The result is countless people suffering every day without the level of support they need as they move through the system - all while seeing their savings whittled away, with one in seven people aged 65 now expected to pay over £100,000 in lifetime care costs.”
CQC ratings reveal widespread substandard care
Figures obtained by the Express show almost one in five care homes is still failing. Of the 13,654 facilities currently rated by the Care Quality Commission, 121 are inadequate, 2,251 require improvement, 10,659 are good and 617 are outstanding. Sixty-eight are not rated, six have insufficient evidence to rate, and ratings were not applicable in two cases. This means 17% of homes are providing substandard care, according to data correct as of July 1.
The average time between inspections is currently 2.3 years. Chris Badger, CQC’s chief inspector of adult social care and integrated care, said: “The Care Quality Commission has made significant progress in improving our inspection rates. I am pleased to say that we have now completed more than 5,200 assessments across adult social care since April 2025, reaching an important milestone ahead of our end-of-September target. We are now doing 75% more assessments per month than we did in March 2025 when the target was set. This reflects the hard work of our teams and our ongoing commitment to ensuring people receive safe, high-quality care. While we are pleased with this progress, we know there is more to do, and we remain focused on continuing to strengthen our inspection regime so that people and families can have confidence in the care being provided across the country. We recognise that public trust in our work depends on transparency about our progress, which is why we regularly publish updates on the steps we are taking to improve. We will hold ourselves accountable by regularly sharing how we are performing.”
Ms Moran also said: “I hope the Casey Commission will take heed and find a way to address unjustified profits. While there is likely to be a continued role for the private sector in social care, if the Government is serious about creating a national care service with high-quality care available to all, it needs to get a grip on the variability in the sector. My committee looks forward to questioning the CQC’s incoming chair in due course and scrutinising its plans to drive up standards.”
Shadow minister calls for funding clarity
In a separate comment, Shadow Secretary of State for Health and Social Care Stuart Andrew said the Government must set out how it will pay for reform. He noted that estimates suggest a National Care Service could cost £18bn, and warned that Labour might resort to tax rises or borrowing. He added that the Conservatives are ready to work with Labour on measures that improve social care, provided they are not reliant on yet more tax rises and borrowing. He also said Labour's National Insurance hike, employer red tape and increases in the minimum wage without support for businesses have driven up care costs. Andrew said he had emphasised to Prime Minister Andy Burnham this week the need to make the best possible use of public funds, adding that Labour should start by reducing the welfare bill if it is serious about fixing social care.
