Care homes market study: summary of final report

Published 30 November 2017

This is a summary of the final report of the Competition and Markets Authority’s (CMA’s) market study into residential and nursing care homes for older people.

We have looked at how well the care homes market is working, for self-funders who purchase care services themselves, as well as for those individuals whose care is funded by the state. The market needs to work well for current and prospective care home residents; they must be able to make well-informed choices, and must be protected if things do not work out as expected. But also, the market must support the state’s intention to ensure that all those who have care needs have them met. This requires that the industry is sustainable, so that efficient care home providers can continue to operate, and that the sector is positioned to invest to meet growing future needs.

We have identified 2 broad areas where we have found problems in the market:

  1. Those requiring care need greater support in choosing a care home and greater protections when they are residents.

  2. The current model of service provision cannot be sustained without additional public funding; the parts of the industry that supply primarily local authority[footnote 1] (LA)-funded residents are unlikely to be sustainable at the current rates LAs pay. Significant reforms are needed to enable the sector to grow to meet the expected substantial increase in care needs.

As set out below, we have made a set of recommendations to governments, sector regulators,[footnote 2] LAs, and the industry. In addition, we intend to take action to protect residents’ rights and compliance with consumer law.

Care homes report

Overview of the sector

This is a hugely important sector. Choices on care are an incredibly important decision taken by or on behalf of individuals who are often extremely vulnerable. The nature and quality of care has a massive impact on the person’s happiness, health, and longevity.

The care homes sector is worth around £15.9 billion a year in the UK, with around 410,000 residents.[footnote 3] We calculate that there are around 5,500 different providers in the UK operating 11,300 care homes for the elderly.[footnote 4] Around 95% of their beds are provided by the independent sector (both for-profit and charitable providers). LAs generally commission care services from independent care providers. We estimate that the average cost for a self-funder in 2016 was £846 per week (nearly £44,000 per year), while LAs on average paid £621 per week.

LAs are directly responsible for care provision in their areas. LAs have a legal duty to meet people’s ‘eligible needs’ subject to their financial circumstances. People with assets of more than £23,250 in England and Northern Ireland, £26,500 in Scotland, and £30,000 in Wales pay the full cost of their care, be it care homes, domiciliary care, or other types of care.[footnote 5] 41% of residents in care homes fund themselves (self-funders) and 49% receive LA-funding (around a quarter of these pay top-ups). Even for those receiving LA-funding, nearly all income, such as pensions, is offset against state contributions. The NHS also commissions nursing care services for people who have a primary health problem, around 10% of residents.[footnote 6]

As the population continues to age, demand for care will increase and the types of care needed will change. The Office for National Statistics predicts a 36% growth in persons aged 85+ between 2015 and 2025, from 1.5 million to 2 million. This is expected to lead to a substantial increase in demand for care home services.

Adult social care in the UK is a devolved matter (although there are considerable similarities in the state systems in the 4 nations). Consequently, some of our recommendations only apply in certain nations.

Support and protections for those requiring care

In the main, the CMA’s consumer research found that residents had received good care. The sector performs a vital public service that benefits many people, and is staffed by many dedicated and caring individuals.

Ideally, for the care home market to meet people’s needs as well as it should, those entering care must be able to make an informed choice, and those within care must be sufficiently empowered to identify and address shortcomings in the service they receive.

However, the challenges faced by those entering and receiving care should not be underestimated; there are many inherent barriers to people making well-informed choices in this sector.

Choosing a care home is often an extremely difficult decision for people to make at a point in their lives when they are particularly vulnerable. Our consumer research found that there is often very little prior consideration of care needs and options by prospective residents, their representatives and their families. People don’t want to contemplate growing old in poor health and this can be a very difficult and emotive subject to discuss within families. Frequently, decisions on care are faced for the first time following a sudden illness, injury or loss of a carer, meaning they are often made with urgency under extremely distressing circumstances.

It is only at that point that many people begin to try to understand a very complex system.[footnote 7] They need to assess their eligibility for funding, and to try to find suitable, affordable care homes that have vacancies. Understandably, many people are overwhelmed by this process. The information and guidance they receive can be confusing and providers often do not clearly provide all the important information people need to make an informed choice.

Once in care, it is very difficult for residents to correct a poor choice, as once settled in a care home they find moving to a different home extremely stressful. The process of moving can severely impact on the residents’ health.

Because of this, it is particularly important that people in care, their representatives and their families feel empowered to raise any concerns that they might have. However, we have found that many residents and their representatives find it difficult to make complaints and seek redress, partly due to complaints systems being perceived as confusing and poorly signposted. People were also worried that if they complain, there could be reprisals against the resident receiving care, or their friends and relatives could be stopped from visiting them.

As residents face barriers, both to moving care home and to complaining and obtaining redress, the consequence is that residents are more vulnerable to unfair practices. Therefore, the consumer protections they receive need to reflect this.

We are making a set of recommendations in relation to these issues as well as taking direct action where we have the powers to do so. These include measures to improve decision making for those requiring care, but also measures to strengthen protections for consumers and to enhance complaints and redress processes.

The protections of consumer law against potential exploitation and adverse outcomes are especially important in this market given the vulnerability of people, the harm that may arise from residents being treated unfairly, and the importance of social care as a service. Our study has found some significant shortcomings in this regard, with some care homes not treating residents fairly. Compliance with the law is essential, especially in this market, where such vulnerable people are involved.

The processes for making complaints must be designed to recognise the barriers that can stop people from being forthcoming with their views. Measures are required both to widen and systematise the best practice witnessed in many care homes, and to provide better access to external independent redress mechanisms when these are required.

In determining our recommendations, we have been very conscious of the challenges faced by those choosing and within a care home. We are grateful for the considerable constructive input that we have had from stakeholder organisations and those with first-hand experience of being in these situations. We also commissioned the Behavioural Insights Team and Research Works to undertake consumer research, assess what is currently working and can be built upon, and explore potential new ways of addressing these challenges.

Our recommendations to improve consumer choice and protection can be grouped into 3 broad areas:

  1. helping people to make good decisions about their care options;
  2. protecting residents and their consumer rights; and
  3. making the complaints system work well for care home residents, their representatives and families.

Recommendations on supported decision-making and helping people consider their care needs earlier

We are calling on governments to work with the NHS, LAs, care home providers and the third sector to deliver a sustained and coordinated programme of actions to help people make good decisions about their care needs. This work should focus on the following 3 areas:

  1. Providing people with good quality, relevant and timely support when they are making life-changing decisions about care.

  2. Helping people quickly and easily identify the relevant, local care options that are available to them.

  3. Encouraging and helping people to prepare and plan for future care needs.

Such actions would help people make better choices, potentially live independently for longer, and reduce the stress associated with going into a care home. They would also mean providers would have to work harder to ensure they attract people to choose their care home. The research that we have carried out and commissioned has identified several specific actions that we recommend be taken forward, including:

  1. requiring LAs to provide information on how the care system works and how people can engage with their LA, as well as information on care homes that are in the prospective residents’ local area. Some LAs already do this well, but they should all effectively match best practice to meet their obligations (to both state and self-funded residents) to provide clear information and support, including guides on how to choose a home;

  2. increasing the use of supported decision-making to help people understand their local care options and enable them to make better-informed choices. Such support could be provided through a variety of means ranging from online tools, telephone advice and leaflets, and more tailored support provided by trusted care professionals; and

  3. asking national governments to undertake a programme of work to promote awareness and encourage and support people to prepare and plan ahead for care they may need in later life. This would encourage individuals to consider their care preferences, improve their understanding of the care system, and enable measures such as financial planning for care, making appropriate home adaptations or choosing suitable properties that will allow them to stay in their own home for longer.

Protecting residents and their consumer rights

We have looked closely at specific concerns that have been raised about some care homes not treating residents fairly and potentially breaking consumer law. Problems include: the lack of indicative pricing information on websites; the non-provision of contracts in a timely way or at all; the charging of large upfront fees and deposits; care homes having wide discretion to increase fees after a person has moved in; requirements to pay fees for an extended period after a resident’s death; and care homes having a wide discretion to ask residents to leave at short notice.

Care home residents must receive the full protections of consumer law, and the sector must ensure it complies with it. We are already taking forward enforcement action using our consumer powers against a number of providers that we think have been unfairly charging large upfront fees, and charging fees for extended periods after a resident has died. As part of this work, we will be making a statement in early 2018 on the steps care homes need to take to ensure that any charges they make after the death of a resident are fair.

We will be following this up in spring 2018 with further guidance on the standards of behaviour we think care homes should be meeting to comply with consumer law across the full range of concerns we have identified.

We will continue to monitor practices in the sector and will take enforcement action where appropriate on other issues of concern where we identify providers engaging in serious and harmful practices. We will be asking our enforcement partners in Trading Standards, as well as the sector regulators, to help us to hold care homes to account.

As part of our guidance work, we will also provide short accessible advice for residents and their representatives to help them understand their rights under consumer law. We are recommending to the industry that it takes steps to develop model contracts that could be used by care home providers, to help encourage best practice across the sector, and ease the workload of care homes in designing, preparing and updating their individual contracts so that they do not contain unfair terms. We would be willing to offer appropriate support to the industry in it taking forward the recommendation.

We are also recommending that national governments introduce stronger sector rules so that compliance with consumer law is embedded into the existing regulatory regime for care homes and is monitored by the sector regulators as part of the inspection or evaluation regime. Further, we are making recommendations for specific rules requiring care homes to display indicative fees and their terms and conditions on their websites, to safeguard deposits against the risk of insolvency, and to notify the sector regulator when they ask residents to leave or impose any ban on a visitor.

Complaints and redress

To address the shortcomings in the current complaints and redress systems we are making various recommendations including:

  1. sector regulators to embed an assessment of complaints systems within their inspections, in particular to include an assessment of what each care home does in practice to direct people to third parties such as advocacy services that may be able to help; and how effectively the care home’s complaints and feedback systems work in practice. Where there are deficiencies, inspectors could recommend appropriate steps such as appointing feedback champions;

  2. in England, a statutory requirement for care homes to signpost to the Local Government and Social Care Ombudsman, and the extension of the remit of the Northern Ireland Public Services Ombudsman to hear complaints from private funders;[footnote 8] and

  3. national governments to review the coverage of advocacy services for residents of care homes and consider increasing availability where there are deficiencies.

State-funded care now and in the future

Public expenditure on adult social care of all types (including non-elderly care and care outside care homes) has been under pressure. For example, aggregate expenditure has declined in real terms by 8% between 2009/10 and 2015/16 in England.

The sector has reported facing challenges to its sustainability, due primarily to the low fee rates being paid for state-funded residents – those challenges being exacerbated by increased cost pressures due largely to wage costs. In its annual assessment of the quality of health and adult social care in England (October 2016), the Care Quality Commission (CQC) said that the sustainability of the adult social care market is approaching a tipping point.

We have undertaken an extensive profitability analysis of the sector using information provided directly by care homes and taken from company accounts. We understand that this is the most complete study of profitability in the sector in recent years.

Our assessment is that the average fees paid by LAs are below the full costs involved in serving these residents. Our financial analysis of the sector shows that, looked at as a whole, the sector is just able to cover its operating costs and cover its cost of capital. However, this is not the case for those providers that are primarily serving state-funded residents.

Many care homes, particularly those that are most reliant on LA-funded residents, are not currently in a sustainable position. Our analysis shows that while many can cover their day-to-day operating costs, they are not able to cover any additional investment costs. This means that while they might be able to stay in business in the near term, they will not be able to maintain and modernise facilities, and eventually will find themselves having to close, or move away from the LA-funded segment of the market.

This shows that the fees currently being paid by LAs are not sufficient to sustain the current levels of care under the current funding model. The implication is that public funding needs to increase if the current model of funding is to continue, or alternatively, if current levels of funding do not increase, the funding model for care will need to be changed.

Our analysis suggests that about a quarter of care homes have more than 75% of their residents LA-funded, and that these are the ones most at risk of failure or exit because of a funding shortfall. We estimate that LA-fees are currently, on average, as much as 10% below total cost for these homes, equivalent to around a £200 to £300 million shortfall in funding across the UK. This finding is based on an average result – there will already be a proportion of operators that are struggling and at risk of closure.

The large majority of care homes offer places to self-funded as well as LA-funded residents. Many care homes are relying on higher prices charged to self-funders to remain viable, even when providing the same services. Self-funded residents in mixed homes are meeting a much greater proportion of homes’ fixed costs. Without this, the public funding shortfall would have a substantially larger impact than it currently has.

Our assessment based on larger providers is that self-pay fees are now, on average, 41% higher than those paid by LAs in the same homes. This represents an average differential of £236 a week (over £12,000 a year).[footnote 9] We understand that fee differentials for smaller providers are slightly lower but still significant.

This difference between self-funded and LA prices for the same service is understandably perceived by many as unfair. The large majority of self-funders are not wealthy; the current thresholds for support are currently drawn so that practically anyone who owns their property will be ineligible for state funding, regardless of income.[footnote 10] Moreover, there is very poor visibility of the size of these fee differences so the public is generally unaware and LAs do not have to justify their approach to the fees they pay to care homes.

In addition to this, however, the situation may not be sustainable. Where LA rates are below total cost, those care homes that can attract self-funders are likely to move away from serving a mix of residents. We already observe that nearly all new care homes being built are in areas where they can focus on self-funders. While we would expect that many mixed homes with differential pricing could continue to operate for some time, there will be a need for additional funding to support further care homes that would not be sustainable without the benefits of this price differential.

Our assessment is that if LAs were to pay the full cost of care for all residents they fund, the additional cost to them of these higher fees would be £0.9 to £1.1 billion a year (UK wide, and assuming this money is directed specifically to those homes where LAs pay fee rates below total costs).[footnote 11]

Meeting future care needs

The need for care will increase with an ageing population, and the acuity of care, particularly in care homes, will also tend to increase over time. Public expenditure on supporting adult social care will have to increase in line with the increasing demand unless there are significant changes to the way social care operates. A simple, illustrative extrapolation of the current costs to LAs of meeting needs for care home places is that an extra £1 to £2 billion a year will be needed by 2025.[footnote 12]

It is essential that there is sufficient capacity of different types of care available in the areas where it is needed. Our assessment, however, is that the sector is not able to attract the investment required to meet the future increase in demand to serve LA-funded residents.

For additional capacity to be in place to meet future demand, LAs need to be taking the appropriate action in good time to encourage appropriate investment. This requires 3 things:

  1. First, LAs need to carry out accurate and informed planning about future needs for care and the approach that will be taken to future care provision (for example, whether care of different types will be provided through residential and nursing homes, domiciliary care or other means in the light of changing needs, technology, etc).

  2. Second, LAs need to take the necessary commissioning steps on the basis of those plans. For the capacity to be in place to meet the future increase in demand, these decisions need to be made in good time.

  3. Third, LAs must be able to attract the investors to build required capacity. That is, investors must have confidence to make the investment.

LAs in England and Wales already have a ‘market shaping’ or equivalent duty. We have reviewed a sample of the approaches LAs have taken to this task and have found these to be very variable, with some LAs displaying detailed engagement and innovative approaches, but many not. For example, we reviewed 20 market position statements (the published market shaping reports) and similar documents representative of LAs across the UK. None presented estimates of additional future capacity needed, and only 2 indicated whether any estimates had been produced by the LA. There are also few tools for LAs to use to actively shape the market by providing credible incentives to operators to invest appropriately. Our assessment is therefore that the current market shaping duty is not proving sufficient to meet this important task.

This understandably reflects the current pressures on LAs and their lack of long-term certainty on future funding patterns and levels. Consequently, there is the risk that short-term funding pressures are leading to decisions about investment being deferred. Therefore, LAs need to be supported and funded to develop the necessary future capacity.

Lastly, the current funding situation combined with uncertainty about future funding means that investors are reluctant to come forward to build the additional capacity needed. For investment to be drawn to the sector, there must be sufficient certainty about future revenues. In particular, there needs to be a reasonable expectation that future fee rates will cover the associated costs. The current funding situation combined with uncertainty about future funding and policy direction means that investors are reluctant to invest in additional capacity focused on LA-funded residents.


Given these concerns, we believe that significant reforms are needed to enable the sector to survive at current capacity levels and also to grow to meet the expected substantial increase in care needs.

Measures have already been taken in Scotland and in Wales. We welcome these as they seek to address the need for planning of care provision and provide improved confidence to potential investors in respect of future returns. In Scotland, the Convention of Scottish Local Authorities (COSLA), Scotland Excel, the Coalition of Care and Support Providers (CCPS) and Scottish Care are developing a cost of care model to guide the rates paid by LAs, and there are integrated health and social care boards, with central oversight of their long-term capacity planning. A similar system is being developed in Wales. Therefore, it is not appropriate to make recommendations for these countries until these initiatives have had a chance to deliver change. However, the same concerns around the need for planning, funding and delivery of state-funded social care apply in Scotland and Wales. It is important that the delivery of an effective and sustainable social care system is maintained. The impact of the existing initiatives will need to be assessed and further actions may well be required. We urge both governments to keep this under review and in particular to consider whether improved planning and forecasting to facilitate the long-term development of capacity and provision of care is required.

We are making recommendations to the Departments of Health in England and Northern Ireland that they develop policies and practices to deliver adult social care for the elderly in a way that addresses these concerns. There are 3 elements to our remedy, reflecting the causes of the problem:

  1. enhanced planning at local level, so LAs can make accurate and meaningful forecasts of future needs, and plan how best to meet them;

  2. oversight of LAs’ commissioning practices to ensure LAs are supported in drawing up their plans, and that these plans are drawn up and carried out; and

  3. there is greater assurance at national level about future funding levels, by establishing evidence-based funding principles, in order to provide confidence to investors.

Enhanced planning

There needs to be effective and credible planning of future capacity needs of all types of care. As explained above, we do not think that this is fully effective at present. LAs are well placed to construct plans to address local circumstances and needs. To support LAs in this task, there is a need for measures to assist and guide them, providing them with evidence on care needs and capacity requirements now and projections for the future. Our view is that this guidance, information and coordination is best provided through a single independent body which is of a scale that can support the necessary technical and policy expertise.

Oversight of LAs’ commissioning practices and transparency

LAs need to be sufficiently incentivised to treat future care needs alongside other immediate priorities. This can be achieved through greater accountability for LAs in delivering on their care obligations, and their planning and commissioning.

Our view is that this is best carried out through oversight by an independent body. This body would monitor and assess: whether the LAs’ current delivery of care is meeting its obligations and, if not, whether commissioning and procurement is consistent with a sustainable sector; the quality of their plans for future provision; and whether the need for investment under those plans is being met.

An independent body would also be able to provide increased transparency on the extent to which higher prices paid by self-funded residents are being used to offset lower LA fees. Although eliminating the differential has very substantial funding implications, greater transparency would help improve local political accountability on how care is delivered in practice.

Public funding and investor confidence

Even with the above reforms in place, unless there is greater confidence in future revenues, investors will not be attracted to build the capacity needed. Clear and sufficiently robust funding principles need to be in place so as to provide the confidence that LAs will have the resources to deliver enhanced plans. These should be evidence-based and sufficiently credible to reassure investors.

While it will be for the government to make decisions on public funding, we recommend that there is a formalised process to provide advisory evidence to government on the costs of care. There should also be advice to government on future needs for care services and capacity requirements, based on consideration of all relevant drivers, including changes in the acuity of care needs, the impact of demographic developments, and consideration of the appropriate balance of different care approaches (residential, domiciliary and other models of care) to best provide that care. While this does not guarantee certainty, it means reasonable expectations can be formed by investors on the basis of credible commitments to take account of the costs of providing care.

In order to ensure that existing care home capacity is maintained, it is important that those care homes most focused on LA-funded clients (ie greater than 75% LA-funded residents) receive fees that reflect the full cost of providing that care. As a minimum, an additional £200 to £300 million a year would be required for this purpose, and then only if that money were specifically directed at increasing fee rates for these particular care homes.

The government has stated it will publish a green paper on care and support for older people by summer 2018. Decisions on the future of policy on social care for the elderly are essential. The uncertainty on future funding policies and frameworks means that the sector will further struggle to attract the investment needed to build the capacity required.

Role of an independent body

In relation to the above recommendations, we recommend that an independent body takes on a series of functions:

  • To provide oversight of LAs, for example to assess whether the LA’s current delivery of care is properly meeting its obligations; ensure that future plans are well informed and made and consistent with duties, that steps are being taken to ensure the need for investment in the plans is being met, and that in practice the investment required is being delivered and the rest of provision maintained as in the plans.

  • To support LAs in planning by acting as a centre of excellence in developing planning and forecasting tools and facilitating sharing of best practice. It could also provide supporting analysis and data as inputs for the local analysis of future needs and how these can be met.

  • To advise central government on the costs of providing different types of care to feed into funding decisions. It could also advise on future needs for care services and capacity requirements.

  • To facilitate transparency on the delivery of social care, for example in relation to fee differentials.

It is important that these roles are determined independently of the process for determining public sector funding for adult social care. It would still ultimately be for central government to determine its funding of LAs and for LAs to determine how to deliver their duties.

Such a body would also need to have suitable skills and knowledge, and ideally would be able to accommodate these duties alongside existing functions. Our view is that in England, the CQC is best positioned to operate this function. While this would be a substantial extension to its role, it is highly complementary to other areas of its existing activities.

Review of effectiveness of the recommendations

Our expectation is that these measures will be sufficient to ensure that capacity is there in the future for the increased numbers of people who will need it. If, however, oversight by an independent body turns out not to be sufficient to increase LA incentives to take the necessary timely decisions; or if uncertainty about future public funding remained a substantial deterrence to investment, it might be necessary to consider going further. In such circumstances, it would be worth considering the approach taken in Scotland and Wales, where LA fees are determined centrally to provide greater clarity to providers, or to consider mandatory rules on LAs paying care rates that cover the full cost of care (with the requisite funding provided).

Fee differentials

We have considered whether recommendations should be made to require that fees charged to self-funders are set at the same level than those charged to LAs in any specific home. We have not made such a recommendation, for 2 major reasons. First, to do so would impose an immediate and very substantial public funding cost. Second, such a measure would be likely to cause the market to split in 2 as those care homes that could concentrate on self-funders (particularly those that are well placed and with attractive facilities to meet areas of high local demand) might want to stop serving LA-funded residents altogether.

However, our recommendations if implemented would increase the fees paid by LAs to care homes to a more sustainable level. Higher LA fees will not necessarily result in downwards pressure on self-funder rates, but they would reduce the need for care homes to charge higher fees to self-funders. We have recommended that the independent body’s role should include disclosure of local fee differentials in order to increase local political accountability on how care is being delivered. In addition, our measures to improve decision making will increase competitive pressures in relation to self-funders. These measures will reduce existing fee differentials over time.

Next steps

We look forward to working with governments, sector regulators, LAs, the industry and others to progress our proposals.

The government has announced that it will publish a green paper on care and support for older people by summer 2018, and begun a process of engagement in advance of the green paper. It has invited a panel of independent experts to provide advice. We strongly commend our analysis of these issues and our recommendations in helping shape the consultation, and look forward to opportunities to engage with government and the panel of experts on these issues. We have made recommendations in order to address the challenges we see in the context of the current system for the provision of social care for the elderly. If these are not accepted, there may need to be a fundamental reform of the operation and funding of the adult social care system.

  1. Throughout this report, references to local authorities (LAs) should be taken to include their equivalents in the devolved nations as relevant in the context, including Health and Social Care Trusts (HSC Trusts) in Northern Ireland and Integrated Joint Boards in Scotland. 

  2. The sector regulators that inspect care homes are: the Care Quality Commission (CQC) in England; the Regulation and Quality Improvement Authority (RQIA) in Northern Ireland; the Care Inspectorate in Scotland; and the Care and Social Services Inspectorate Wales (CSSIW). 

  3. This figure is based on applying occupancy rates from LaingBuisson to an estimate of total occupancy from CMA analysis. 

  4. 80% of care home providers only operate one home. 

  5. Where individuals need nursing care, various rules apply in the different nations which will make a partial or full contribution to the nursing costs. Some personal care is available for everyone aged 65 and over in Scotland who has been assessed by the LA as needing it irrespective of any financial assessment. Currently the value of the person’s home is not counted as an asset if a spouse or dependent also lives in the home, nor is the value of the home counted for funding of domiciliary care. 

  6. For the purpose of this summary, NHS refers to the four national health services of the UK: England – NHS; Northern Ireland – Health and Social Care NI (HSCNI); Scotland – NHS Scotland; Wales – NHS Wales. 

  7. Individuals have a very poor understanding of how the social care system works, what services and information is provided by the state, and what is required of the individual. 

  8. The Local Government and Social Care Ombudsman and the Northern Ireland Public Services Ombudsman are the statutory bodies that hear individual complaints unresolved through the care home’s or LA’s processes. 

  9. This is the difference within mixed homes. The average fees quoted above differ in that they include a small number of pure LA-funded or self-funded resident homes. 41% is an unweighted average across our sample of mixed homes. 

  10. But see footnote 5. 

  11. This £0.9 to £1.1 billion includes the £200 to £300 million referred to above. The smaller sum is the increase in LA fees targeted at the providers that are most exposed to LA-residents (greater than 75% LA-funded), as these are the most likely to be at immediate risk of financial failure. The larger sum is the amount needed to ensure LAs pay fees covering full costs for all LA-funded residents in all homes. The 2 numbers are not cumulative requirements. 

  12. This result is based on projections of increased demand for care homes of between 14% and 34% between 2015 and 2025, applied to current expenditure by English, Scottish and Welsh LAs on care homes for the elderly with a pro rata adjustment for Northern Ireland. It does not take account of care user contributions, and does not attempt to model any future changes in costs, revenues, LA-fee rates or other aspects of policy.