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UK care home numbers shrank in 2022 (first time in 3 years)

Updated: May 10, 2023

Number of care homes in the UK shrank in 2022 for the first time in three years.


Social care is hitting the headlines again but for all the wrong reasons. CSI Market Intelligence has revealed that care home capacity in the UK shrank in 2022 for the first time in three years.


Despite the bed-blocking crisis facing the NHS and the pressing need to discharge thousands of hospital patients into social care, the number of beds in the sector fell by 230 over the last 12 months.


It is the first year-on-year decrease in bed numbers since 2019.


Figures compiled by CSI Market Intelligence also showed that 247 care homes closed their doors last year, while 123 new businesses opened. It was the lowest number of new entrants to the market since 2015, and 23% down on openings in 2021.


The openings were the lowest since 2015 and were 23% down on openings in 2021.

The minimal net loss in beds, despite 124 more closures than openings, is down to the increasingly high number of beds offered by new care homes. This shows a trend away from independents and smaller providers, with the biggest companies taking up an increasingly larger proportion of care home capacity.


On a regional basis there were only two that gained beds across the year, in London and West Midlands, whilst the largest number of losses were in the South East, South West and Nort West.


Closures are likely to increase.


The author of the report, Mike Short, who is director at CSI MI, said: “When one reads the reported precarious financial situation that so many care homes find themselves in,” “closures are going to continue, and if anything, increase unless anything changes drastically for the better, but at least investment in new larger locations means that is still a supply of beds for those who need them.”

“What we’re seeing is massive underfunding, and that is leading to closures. There is bound to be more closures because the pressure has become unbearable.”


Some care providers saw fuel bills soar by as much as 1000% this winter, while also having to deal with spiralling food inflation and a shrinking workforce.


Staff shortages in the sector increased by 52% last year to 165,000 vacancies, according to Skills for Care.


Why the largest providers will survive.


I have reported to my readers in the past that the largest care home providers continue to make profits despite the challenges they face. This is down to economies of scale. Larger care businesses can provide more beds on site, are able to make more cost savings and manage energy efficiency and management of staff more efficiently. That is why the larger companies will continue to invest in care homes.


Impact of care home closures


The raft of closures has seen thousands of vulnerable care home residents and their families forced to find new accommodation, often with little to no notice.

The closure of care homes will increase the stress on families. There will be less choice, and probably a change in location that will increase families travelling time and limit the number of visits they are able to make.


Summary


The report by CSI Market Intelligence that the number of care homes in the UK shrank in 2022 does not come as a shock to anyone in social care. Faced by the challenges to the sector around staff recruitment, people leaving for higher wages in the retail sector, and the energy crises have all contributed to their demise.


A worrying trend is the movement away from independents and smaller providers, with the biggest companies taking up an increasingly larger proportion of care home capacity.

Unfortunately, the decline in the number of care homes is likely to continue, but we will see continued investment in new larger profitable locations ensuring that is still a supply of beds for those who need them.


As a result, larger care home providers will expand their hold on the market by cost savings achieved through economies of scale at the expense of smaller independent providers.


The impact of care home closures on families and residents is immeasurable. Moving to a new location can be traumatic for residents and may increase traveling time of families and limit the number of visits.


Albert Cook BA, MA & Fellow Charted Quality Institute Managing Director Bettal Quality Consultancy

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