Value of the care home market

The total value of the care home market for elderly and physically disabled people at April 2003 was estimated at £10.2 billion, of which private sector operators accounted for £6.9 billion. At April 2003, there were an estimated 501,900 places in residential settings for long stay care of elderly and physically disabled people across all sectors (private, public and voluntary) in the UK. Overall UK capacity has decreased by some 13,400 places in the 15 months to April 2003, a similar annual rate of closure to the previous year. Total capacity is now some 73,700 (13%) lower than the 1996 peak of 575,600.

The latest Laing & Buisson fee survey in March 2003 found average weekly fees of £455 for private nursing care for elderly people and £329 for private residential care in the UK.

Average fee inflation is estimated at 8% for both private nursing and residential care for older people between 2001/2002 and 2002/03.

Looking forward, similar levels of fee inflation are likely in 2003/04 as supply becomes tighter and as more local authorities have been forced to raise baseline fee rates. Thirty per cent of local authorities supplying figures for Laing & Buisson's most recent (July 2003) baseline fee survey increased some or all rates by at least 10 per cent in the negoitating round for financial year 2003/04. A further 30% of local authorities increased some or all residential fees by 5% and above. However, 18% of local authorities implemented increases at or below 3% for some residential care rates - barely sufficient to cover wage increases.

Occupancy rates

Laing & Buisson's most recent full survey of care homes for elderly and physically disabled people, in March 2003, found occupancy rates of 91.8% for all for-profit homes, compared with the average of 90.4% recorded in 2002 and 92.3% for private residential homes and 87.7% for dual registered homes.

Market size

The following table provides details of the number of homes for all client types. This includes elderly, physically disabled, elderly mentally ill, learning disabled and alcohol and drug dependency clients.

Registered UK Care Homes (May 2003)
All Care Homes	29,890
Total number of places	577,301
Private and voluntary care homes (formerly residential) (4+ beds)	14,487
Private and voluntary small care homes (formerly residential)	5,850
Private and voluntary care homes with nursing (formerly nursing & dual registered homes)	5,982
Local authority owned homes	2,338
NHS trust owned homes	233

The following graph illustrates the development of the care home industry up to 2000 and the transformation of care services from a predominantly public sector activity to in the mid-1970s to a predominantly private sector activity now: Nursing and residential care places for elderly, chronically ill and physically disabled by sector, UK, April 1967-2000

For-profit major providers (defined as an operator of three or more homes or a publicly quoted company) increased their share of for-profit beds care home beds by 1.4 percentage points during calendar year 2001. By the end of 2001 they owned or leased 33.1% of all UK for-profit nursing, residential and dual registered beds in homes for the elderly and physically disabled people.

Major providers in the for-profit sector operate a total of 2,444 homes and 119,383 beds catering for elderly and physically disabled clients.

Major providers in the not-for-profit sector operate a total of 1,465 homes and 47,467 beds.

Number of homes and beds operated by major quoted companies and selected companies with over 1000 beds at May 2003
	No. of homes	No. of beds
ANS	45	3177
Ashbourne	130	7438
Barchester Healthcare	37	2364
Bettercare Ltd (N.I)	28	1956
BUPA Care Services plc	246	17688
Care UK plc	43	2125
Craegmoor	289	5654
Four Seasons Healthcare	297	14930
Helen McArdle Care	19	986
Highfield Group	188	8748
Leonard Cheshire	81	2276
Orders of St John Care Trust	54	2200
Quantum Care	26	1388
Southern Cross	140	7741
Union Healthcare	15	494
Westminster Healthcare	87	5695

The table which appears on this page is updated infrequently. For monthly updates you need to subscribe to Community Care Market News.