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Residential Care for the Elderly - UK - September 2016

Published By :

Mintel

Published Date : Sep 2016

Category :

Industry Profile

No. of Pages : N/A

The challenges of providing high-quality elderly residential care in a country with an ageing population and stagnating spending levels means that an innovative and long-term response is needed. Despite substantial investment in new and refurbished capacity in the independent sector over the last two decades, a considerable amount of existing care home stock is still classed as ‘sub-standard’. Further substantial investment in capacity will be required going forward as demand for care homes continues to rise in line with estimated rises in the elderly population and the number of those requiring specialist care for conditions such as dementia. Nursing and dementia care homes for residents with high dependency needs are expected to be a particular growth area for the sector.

Table of contents

EXECUTIVE SUMMARY
Market size
Figure 1: UK residential care market, by value, 2012-16
Figure 2: UK residential care market, by number of registered care homes and number of care home places, 2012-16
Market trends
Old age support ratio projected to fall
Staffing pressures continue to emerge
Figure 3: Annual workforce turnover rates in the adult residential care sector, England, 2016, by employee position
CQC inspections find vast range in quality of service provision
Occupancy rates in residential care homes remain above nursing homes
Regional analysis
Figure 4: Local authority-supported adults in residential and nursing care, by region, 2011/12 and 2015/16
Market factors
Ageing population and pension changes will increase strain on service provision and care affordability
Care fee and cost funding gap has widened due to implementation of higher minimum and living wages
Brexit could lead to further staff turnover pressures
The consumer
Close to three-quarters of people have not thought about how they would pay for care
Performance ratings and proximity of care homes influence choice
Care village demand grows with age
Companies
Forecast
The value of the UK residential care for the elderly market is forecast to increase by 7% by 2021
Figure 5: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2017-21
Sheltered housing, including extra care housing, is expected to experience stable growth as it becomes preferred to traditional care homes
Figure 6: Forecast UK sheltered housing units, 2017-21
What we think

KEY INSIGHTS
Does the sector still require a ‘cost cap’?
Will the 2% council tax precept be enough to fill the care funding gap?
With the number of traditional care homes on the decline, can extra care housing facilities support the growing number of people in need?
Can care home operators adapt their service provision to accommodate the growing number of people suffering from dementia?
What does the future hold for the residential care market?

INTRODUCTION

Definitions
Methodology
Abbreviations
Market positioning
Figure 7: Elderly (65+) population in the UK, by country, 1995, 2005 and 2015
Figure 8: Elderly population in the UK, 1995, 2005 and 2015

UK ECONOMY
Key points
Overview
Figure 9: UK GDP, 2006-16
Figure 10: UK Output, by industry, 2008-16
Figure 11: Quarters after GDP peak, 1979, 1990 and 2008
Inflation
Interest rates
House prices
Figure 12: UK house price changes, 2006-16
Consumer spending
Manufacturing
Figure 13: UK manufacturing, 2014-16
Business investment
Figure 14: UK GFCF 2005-16
Imports
Exports

MARKET FACTORS
Key points
Ageing population and pension changes will increase strain on service provision and care affordability
Care fee and cost funding gap has widened due to implementation of higher minimum and living wages
Brexit could lead to further staff turnover pressures
CQC regulatory fees
Housing market supply issues affecting care home and other retirement home development
Legislation
Care Standards Act
Regulation and Inspection Bill (Wales)
The Care Act 2014 and Better Care Fund
CQC and Market Oversight
Care Certificate
Pensions Act
The Carers’ Strategy
Other legislation

MARKET SIZE
Key points
Figure 15: The UK residential care market, by value, 2012-16
Figure 16: UK residential care market, by value, 2012-16
Figure 17: The UK residential care market, by number of registered care homes, 2012-16
Figure 18: UK residential care market, by number of registered care homes, 2012-16
Figure 19: The UK residential care market, by number of registered places, 2012-16
Figure 20: Average number of places, revenue per care home and revenue per place, UK, 2012-16
Figure 21: Revenue per care home and per place, UK, 2012-16
Market segmentation
Accommodation type
Figure 22: Segmentation of the UK residential care market, by type of accommodation, 2012-16
Care purchaser
Figure 23: Segmentation of the UK residential care market, by type of purchaser, 2012-16
Figure 24: Segmentation of the UK residential care market, by type of purchaser, 2012 and 2016
Provider type
Figure 25: Segmentation of the UK residential care market, by type of provider, 2012-16
Figure 26: Segmentation of the UK residential care market, by type of provider, 2012-16

LOCAL AUTHORITY COMMISSIONED CARE
Key points
Figure 27: Number of local authority funded adults in care homes, by type of provider, 2011-15
Figure 28: Number of local authority-funded adults in care homes, by independent provider, 2011-15
Government spending pledge may not be sufficient to plug funding gap
Local authority expenditure
Figure 29: Segmentation of local authority-commissioned residential and nursing care expenditure, by provider and client type, 2012-16
Figure 30: Segmentation of local authority commissioned residential and nursing care expenditure, by provider and client type, 2012-16
Older people (65+) expenditure
Figure 31: Segmentation of local authority expenditure on residential care services for older people (65+), by service type, 2012-16
Figure 32: Segmentation of local authority expenditure on residential care services for older people (65+), by service type, 2012-16
Adults aged 18-64 expenditure
Figure 33: Segmentation of local authority expenditure on residential care services for adults aged 18-64, by service type, 2012-16
Figure 34: Segmentation of local authority expenditure on residential care services for adults aged 18-64, by care need type, 2012-16
Regional analysis
Figure 35: Local authority-supported adults in residential and nursing care, by region, 2011/12-2015/16
Figure 36: Local authority-supported adults in residential and nursing care, by region, 2011/12 and 2015/16
Figure 37: Local authority-supported adults in independent sector residential care, by region, 2011/12-2015/16
Figure 38: Local authority-supported adults in independent sector residential care, by region, 2011/12 and 2015/16
Figure 39: Local authority-supported adults in LA-staffed residential care, by region, 2011/12-2015/16
Figure 40: Local authority-supported adults in LA-staffed residential care, by region, 2011/12 and 2015/16
Figure 41: Local authority-supported adults in nursing care, by region, 2011/12-2015/16
Figure 42: Local authority-supported adults in nursing care, by region, 2011/12 and 2015/16
NHS CARE
Key points
Personal budgets
Figure 43: Segmentation of NHS expenditure on residential and nursing care, by provider type, 2012-16
Figure 44: Segmentation of NHS expenditure on residential and nursing care, by provider type, 2012-16

PRIVATE CARE PURCHASERS
Key points
Figure 45: Private expenditure on residential and nursing care, 2012-16
Figure 46: Private expenditure on residential and nursing care, 2012-16

SHELTERED HOUSING
Key points
Government funding
Market size
Figure 47: The development of sheltered housing in the UK, 2012-16
Figure 48: Development of sheltered housing in the UK, 2012-16
Figure 49: Segmentation of sheltered housing in the UK, by sector and region, 2016
Extra care housing
Market development
Market size
Figure 50: Segmentation of extra care housing in England, by purchasing type and region, 2016
Figure 51: Segmentation of extra care housing in England, by purchasing type and region, 2016

MARKET TRENDS
Key points
Old age support ratio projected to fall
Figure 52: UK population projections, by age group, 2016-40
Figure 53: Estimated and projected age structure of the United Kingdom population, by sex, mid-2016 and mid-2040
Staffing pressures continuing to emerge
Figure 54: Annual workforce turnover rates in the adult residential care sector, England, 2016, by employee position
Figure 55: Annual workforce turnover rates in the adult residential care sector, England, 2016, by employee position
Figure 56: Average annual pay in the adult residential care sector, England, 2016, by employee position
Figure 57: Average annual pay in the adult residential care sector, England, 2016, by employee position
CQC inspections find vast range in quality of service provision
Figure 58: CQC inspection outcomes, England, 2016
Recent declines in the number of residential care home places has raised the importance of domiciliary care
Squeeze on care home fees continues while care costs rise
Occupancy rates in residential care homes remain above nursing homes
Demand for specialist care homes increases due to rise in illnesses that require greater and specific care requirements

SUPPLIER OPPORTUNITIES
Key points
Care home property market
Purpose-built care homes
Supply of goods
Efficiency
Demography and health trends
Self-funder market
Contract/purchasing negotiation

THE CONSUMER — CARE PAYMENT
Key points
Close to three-quarters of people have not thought about how they would pay for care
Figure 59: Residential care payment plans, June 2016
Figure 60: Residential care payment plans, June 2016
Young most likely to have not considered financial consequences of care
Figure 61: Residential care payment plans, by age and gender, June 2016
People expect to use personal savings and pension income to fund care
Figure 62: Residential care payment method, June 2016
Figure 63: Residential care payment method, June 2016

THE CONSUMER - CHOOSING A HOME
Key points
Performance ratings and proximity of care homes influence choice
Figure 64: Residential care home choice factors, by rank of importance, June 2016
Figure 65: Residential care home choice factors, by most important factor, June 2016

THE CONSUMER - CARE HOME PREFERENCE
Key points
Smaller homes still in demand despite operators’ drive for larger homes
Figure 66: Residential care home preference, June 2016
Figure 67: Residential care home preference, June 2016
Care village demand grows with age
Figure 68: Residential care home preference, by age and gender, June 2016

THE CONSUMER - CARE INFORMATION
Key points
Reviews form most useful guide in selecting a home
Figure 69: Residential care home information sources, by rank of importance, June 2016
Figure 70: Residential care home information sources, by most important source, June 2016

INDUSTRY STRUCTURE
Key points
Industry development
Implementation of the NLW alongside the Care Act has piled financial pressure on the market
Development of a ‘three-tier’ system
M&A activity
Repeat of Southern Cross collapse on the horizon
Industry structure
Figure 71: Analysis of the changes in the structure of the residential nursing care activities industry, 2011-2015
Figure 72: Analysis of the changes in the structure of the residential care activities for the elderly and disabled industry, 2011-2015
Figure 73: Analysis of the changes in the structure of the hospital activities - Medical nursing home activities industry, 2011-2015
Structure by employment
Figure 74: Analysis of the employment structure of the residential nursing care activities industry, 2014-15
Figure 75: Analysis of the employment structure of the residential care activities for the elderly and disabled industry, 2014-15
Figure 76: Analysis of the employment structure of the hospital activities - Medical nursing home activities industry, 2014-15
Structure by turnover
Figure 77: Analysis of the financial structure of the residential nursing care activities industry, 2014-15
Figure 78: Analysis of the financial structure of the residential care activities for the elderly and disabled industry, 2014-15
Figure 79: Analysis of the financial structure of the hospital activities - Medical nursing home activities industry, 2014-15

COMPANY PROFILES

ABBEYFIELD SOCIETY
Figure 80: Financial analysis of Abbeyfield Society, 2012-16
Company strategy

ANCHOR TRUST
Figure 81: Financial analysis of Anchor Trust, 2011-15
Company strategy

AVANTE CARE AND SUPPORT (FORMERLY AVANTE PARTNERSHIP)
Figure 82: Financial analysis of Avante Care & Support, 2011-15
Company strategy

BARCHESTER HEALTHCARE
Figure 83: Financial analysis of Barchester Healthcare, 2010-14
Company strategy
BUPA
Figure 84: Financial analysis of Bupa, 2011-15
Figure 85: Divisional analysis of Bupa, 2011-15
Company strategy

BUPA CARE HOMES (ANS)
Figure 86: Financial analysis of Bupa Care Homes (ANS), 2010-14

BUPA CARE HOMES (CFG)
Company strategy
CARE UK
Figure 87: Financial analysis of Care UK, 2011-15
Figure 88: Revenue breakdown of Care UK, by division, 2013-15
Company strategy

EMBRACE
Figure 89: Financial analysis of Embrace, 2014-15
Company strategy

FOUR SEASONS HEALTH CARE
Figure 90: Financial analysis of Four Seasons Health Care, 2011-15
Company strategy

HC-ONE
Figure 91: Financial analysis of HC-One, 2012-15
Company strategy

HOUSING & CARE 21
Figure 92: Financial analysis of Housing & Care 21 (formerly Housing 21), 2011-15
Company strategy

METHODIST HOMES
Figure 93: Financial analysis of Methodist Homes, 2011-15
Company strategy

MINSTER CARE GROUP
Figure 94: Financial analysis of Minster Care Group, 2011-15
Company strategy

PRIORY GROUP
Figure 95: Financial analysis of the Priory Group, 2011-15
Figure 96: Financial analysis of the Priory Education Services, 2011-15
Group strategy

SANCTUARY CARE
Figure 97: Financial analysis of Sanctuary Care, 2011-15
Company strategy
Figure 98: Profiled companies’ turnover, 2011-15

FORECAST
Key points
The market
Demographic trends suggest strong demand and higher number of fully dependent care users
Attempts to use council tax to help boost social care funding are likely to fall short
Service fee pressures force providers to consider market position...
while care costs continue to rise and ‘price out’ more of those in need
Domiciliary care market trends also affect the development of the residential care market
Lack of suitable housing is putting a squeeze on market development
Care providers under pressure to adapt to market conditions
Market forecast
Figure 99: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2017-21
Figure 100: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2017-21
Figure 101: Forecast UK residential and nursing care, by number of registered places, 2017-21
Figure 102: Forecast UK residential and nursing care, by number of places, 2017-21
Figure 103: Forecast UK residential and nursing care, by number of homes, 2017-21
Figure 104: Forecast UK residential and nursing care by number of homes, 2017-21
Sheltered housing
Figure 105: Forecast UK sheltered housing units, 2017-21
Figure 106: Forecast UK sheltered housing units, 2017-21
Industry is in need of a larger and younger workforce
More widespread use of technology in care homes could help improve cost efficiency and boost operators’ profit margins
Social care requires a new approach

FURTHER SOURCES AND CONTACTS
Trade associations and organisations
Age UK
Carers UK
Care England (formerly English Community Care Association)
National Care Association
National Care Forum
Trade magazines
Care Home Professional
Care Management Matters
Care Talk
Caring Times
Caring UK
Community Care
Tomorrow’s Care
Trade exhibitions
Care England 2016
Care and Dementia Show 2016
Health + Care 2017

NAIDEX
Nursing in Practice 2016
Primary Care and Public Health 2017

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