Market analysis


61-to-80 bed sector, and closures in the 10- to-40 bed sector. However, due to the relatively low levels of openings (adding less than 1.5 per cent to the market every year), if this continues, there is not going to be a massive swing in the shape of the marketplace towards larger homes even over the next ten years. Chart 3 shows that, based on average openings and closures over the past five years, homes with 40 beds or less will still account for 47 per cent of the market in 2033, compared with 57 per cent currently, and the only real growth will be in the 61-to-80 bed sector growing from one in eight homes to one in five by 2033.


Dementia is the driving force for openings Dementia is basically the driving force of care home openings, although the sectors do also suffer the greatest losses, as the sector has a 74 per cent market share. Normally nursing dementia is the only one of the four sectors to show a net growth in both homes and beds every year, and so is the only sector to show any real growth over the next 10 years, with nominal growth in residential dementia. Chart 4 shows that on recent trends nursing dementia will grow from a 31 per cent share of homes to 37 per cent in 2033, and a nominal 1 per cent growth for residential dementia will mean that the total dementia sector will grow from 74 per cent to 81 per cent over the next 10 years.


Measuring beds rather than homes So that is a look into the future for care homes in England, but of course beds rather than homes are key to providing care, and from our heritage of reporting on the sector,


245 138 127 119 192 -73 -192


-445 -583


10-25 beds


-286 -413


Open Net


Closed 26-40 beds 41-60 beds 61-80 beds Chart 2: Care home openings and closures by size 2018 to 2022


The latest trend shows an increase in the number of closures and a decrease in openings


there are some worrying facts. Care homes with a total registration of nearly 70,000 beds have closed between the beginning of 2015 and the middle of 2023, with the resulting displacement of many vulnerable older people. While average occupancy has teetered


between 75 and 90 per cent, even if one assumes that the homes had lower levels of residency as an indicator of a reason for closure, this still means that probably around 40,000 people have had to give up their homes, their care home friends, and be moved to another location with the


26% 57% 31% 26% 25%


13% 6%


2023


19% 7%


2033 Forecast based on average net change in care homes (openings minus closures) over previous five years Chart 3: Market share by size of care home 2023 and 2033 April 2024 www.thecarehomeenvironment.com


19% 28%


47%


10-25 beds 26-40 beds 41-60 beds 61-80 beds Over 80 beds


obviously negative impact it will have had on their life, especially those living with dementia.


This, if nothing else, is a key reason to support the care home sector and stem the flow of closures. But I hear you say: “we need new stock – many homes are not fit for purpose!” This may be true, but I have already shown that new stock is not arriving quick enough, and even if it were, it would not prevent the displacement issue. Overall availability of beds on a local basis is also a key issue. While I have provided national statistics, the provision of care is a local service. Supply levels across the country vary greatly and it is not always the case that care homes close in an area of high supply. Nor is it always the case that new homes are built in areas of low supply. For example, there are nine local authorities that have supply levels between 20 and 66 per cent above the national average supply levels (based on number of beds for every thousand local people aged 75 and over) and of these nine, seven have shown an increase in beds over the last five years, the other two showing no change. And of seven local authorities with


between 20 and 30 per cent below average supply levels, six have lost further beds over the last five years. The situation is even worse in London where supply levels are even lower and decreasing by the year. CSI provides a MIDAS report for its clients, mapping out the local supply and demand levels around any location in England, and I can safely say that no two reports are the same. The reports are


37 Over 80 beds -53 62 29 -33


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