Private care home investors a risk to public sector, regulator says

England's social care watchdog has warned that the care-home market is being reshaped by private investment in ways that could undermine the government's ambition of a universal care service.

The Care Quality Commission's annual report finds the five biggest care-home owners have increased their share of the market by 26% in the past two years, driven by interest from US property investors. Between them they now own around one in seven homes.

While there could be benefits, the regulator says the trend could lead to higher prices and a reduction in the quality of care, and that it needs to be monitored.

At the same time, home care - support with washing and dressing in people's own homes - has become more fragmented, with a greater number of smaller providers. The CQC says nearly a third of these services look after four or fewer people, which could create inefficiencies.

In contrast, there are fewer small care homes judged important for providing specialist and personalised care. Over the last 14 years their numbers have fallen significantly, with homes combining care with nursing support down by a quarter.

The CQC says the funding system remains fragile - people using care services either self-fund or, for the poorest, the state helps pay. In some areas providers are increasingly turning to self-funders, making it harder for councils to secure affordable places.

Chris Badger, the CQC's chief inspector of adult social care, welcomed the government's renewed focus - Andy Burnham has made social care one of his key priorities - but said the market had to be "shaped around what's best for people" and that "a clearer vision is needed".

Hugh Alderwick of the Health Foundation think-tank said the report lays bare the scale of the crisis and that councils need enough funding, skills and strong leadership to reshape services. Prof Martin Green of Care England, which represents providers, blamed rising employer national insurance contributions, inflation and energy costs, warning the trend of smaller homes closing will continue without real progress on a funding settlement. The Department of Health and Social Care said the report demonstrated the scale of the challenge.