Table of Contents
Executive Summary
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- Market size
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- 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
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- 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
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- 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
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- 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
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- Figure 6: Forecast UK sheltered housing units, 2017-21
- What we think
Key Insights
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- 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
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- Definitions
- Methodology
- Abbreviations
- Market positioning
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- Figure 7: Elderly (65+) population in the UK, by country, 1995, 2005 and 2015
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- Figure 8: Elderly population in the UK, 1995, 2005 and 2015
UK Economy
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- Key points
- Overview
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- Figure 9: UK GDP, 2006-16
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- Figure 10: UK Output, by industry, 2008-16
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- Figure 11: Quarters after GDP peak, 1979, 1990 and 2008
- Inflation
- Interest rates
- House prices
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- Figure 12: UK house price changes, 2006-16
- Consumer spending
- Manufacturing
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- Figure 13: UK manufacturing, 2014-16
- Business investment
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- Figure 14: UK GFCF 2005-16
- Imports
- Exports
Market Factors
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- 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
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- Key points
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- Figure 15: The UK residential care market, by value, 2012-16
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- Figure 16: UK residential care market, by value, 2012-16
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- Figure 17: The UK residential care market, by number of registered care homes, 2012-16
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- 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
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- Figure 20: Average number of places, revenue per care home and revenue per place, UK, 2012-16
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- Figure 21: Revenue per care home and per place, UK, 2012-16
- Market segmentation
- Accommodation type
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- Figure 22: Segmentation of the UK residential care market, by type of accommodation, 2012-16
- Care purchaser
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- Figure 23: Segmentation of the UK residential care market, by type of purchaser, 2012-16
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- Figure 24: Segmentation of the UK residential care market, by type of purchaser, 2012 and 2016
- Provider type
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- Figure 25: Segmentation of the UK residential care market, by type of provider, 2012-16
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- Figure 26: Segmentation of the UK residential care market, by type of provider, 2012-16
Local Authority Commissioned Care
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- Key points
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- Figure 27: Number of local authority funded adults in care homes, by type of provider, 2011-15
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- 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
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- Figure 29: Segmentation of local authority-commissioned residential and nursing care expenditure, by provider and client type, 2012-16
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- Figure 30: Segmentation of local authority commissioned residential and nursing care expenditure, by provider and client type, 2012-16
- Older people (65+) expenditure
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- Figure 31: Segmentation of local authority expenditure on residential care services for older people (65+), by service type, 2012-16
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- 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
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- Figure 33: Segmentation of local authority expenditure on residential care services for adults aged 18-64, by service type, 2012-16
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- Figure 34: Segmentation of local authority expenditure on residential care services for adults aged 18-64, by care need type, 2012-16
- Regional analysis
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- Figure 35: Local authority-supported adults in residential and nursing care, by region, 2011/12-2015/16
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- 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
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- 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
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- 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
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- Figure 42: Local authority-supported adults in nursing care, by region, 2011/12 and 2015/16
NHS Care
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- Key points
- Personal budgets
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- Figure 43: Segmentation of NHS expenditure on residential and nursing care, by provider type, 2012-16
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- Figure 44: Segmentation of NHS expenditure on residential and nursing care, by provider type, 2012-16
Private Care Purchasers
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- Key points
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- Figure 45: Private expenditure on residential and nursing care, 2012-16
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- Figure 46: Private expenditure on residential and nursing care, 2012-16
Sheltered Housing
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- Key points
- Government funding
- Market size
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- Figure 47: The development of sheltered housing in the UK, 2012-16
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- 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
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- Figure 50: Segmentation of extra care housing in England, by purchasing type and region, 2016
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- Figure 51: Segmentation of extra care housing in England, by purchasing type and region, 2016
Market Trends
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- Key points
- Old age support ratio projected to fall
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- Figure 52: UK population projections, by age group, 2016-40
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- Figure 53: Estimated and projected age structure of the United Kingdom population, by sex, mid-2016 and mid-2040
- Staffing pressures continuing to emerge
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- Figure 54: Annual workforce turnover rates in the adult residential care sector, England, 2016, by employee position
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- 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
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- 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
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- 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
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- 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
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- Key points
- Close to three-quarters of people have not thought about how they would pay for care
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- Figure 59: Residential care payment plans, June 2016
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- Figure 60: Residential care payment plans, June 2016
- Young most likely to have not considered financial consequences of care
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- Figure 61: Residential care payment plans, by age and gender, June 2016
- People expect to use personal savings and pension income to fund care
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- Figure 62: Residential care payment method, June 2016
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- Figure 63: Residential care payment method, June 2016
The Consumer - Choosing a Home
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- Key points
- Performance ratings and proximity of care homes influence choice
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- Figure 64: Residential care home choice factors, by rank of importance, June 2016
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- Figure 65: Residential care home choice factors, by most important factor, June 2016
The Consumer - Care Home Preference
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- Key points
- Smaller homes still in demand despite operators’ drive for larger homes
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- Figure 66: Residential care home preference, June 2016
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- Figure 67: Residential care home preference, June 2016
- Care village demand grows with age
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- Figure 68: Residential care home preference, by age and gender, June 2016
The Consumer - Care Information
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- Key points
- Reviews form most useful guide in selecting a home
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- Figure 69: Residential care home information sources, by rank of importance, June 2016
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- Figure 70: Residential care home information sources, by most important source, June 2016
Industry Structure
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- 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
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- Figure 71: Analysis of the changes in the structure of the residential nursing care activities industry, 2011-2015
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- Figure 72: Analysis of the changes in the structure of the residential care activities for the elderly and disabled industry, 2011-2015
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- Figure 73: Analysis of the changes in the structure of the hospital activities - Medical nursing home activities industry, 2011-2015
- Structure by employment
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- Figure 74: Analysis of the employment structure of the residential nursing care activities industry, 2014-15
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- Figure 75: Analysis of the employment structure of the residential care activities for the elderly and disabled industry, 2014-15
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- Figure 76: Analysis of the employment structure of the hospital activities - Medical nursing home activities industry, 2014-15
- Structure by turnover
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- Figure 77: Analysis of the financial structure of the residential nursing care activities industry, 2014-15
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- Figure 78: Analysis of the financial structure of the residential care activities for the elderly and disabled industry, 2014-15
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- Figure 79: Analysis of the financial structure of the hospital activities - Medical nursing home activities industry, 2014-15
Company Profiles
Abbeyfield Society
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- Figure 80: Financial analysis of Abbeyfield Society, 2012-16
- Company strategy
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Anchor Trust
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- Figure 81: Financial analysis of Anchor Trust, 2011-15
- Company strategy
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Avante Care and Support (formerly Avante Partnership)
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- Figure 82: Financial analysis of Avante Care & Support, 2011-15
- Company strategy
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Barchester Healthcare
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- Figure 83: Financial analysis of Barchester Healthcare, 2010-14
- Company strategy
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Bupa
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- Figure 84: Financial analysis of Bupa, 2011-15
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- Figure 85: Divisional analysis of Bupa, 2011-15
- Company strategy
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Bupa Care Homes (ANS)
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- Figure 86: Financial analysis of Bupa Care Homes (ANS), 2010-14
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Bupa Care Homes (CFG)
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- Company strategy
Care UK
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- Figure 87: Financial analysis of Care UK, 2011-15
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- Figure 88: Revenue breakdown of Care UK, by division, 2013-15
- Company strategy
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Embrace
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- Figure 89: Financial analysis of Embrace, 2014-15
- Company strategy
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Four Seasons Health Care
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- Figure 90: Financial analysis of Four Seasons Health Care, 2011-15
- Company strategy
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HC-One
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- Figure 91: Financial analysis of HC-One, 2012-15
- Company strategy
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Housing & Care 21
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- Figure 92: Financial analysis of Housing & Care 21 (formerly Housing 21), 2011-15
- Company strategy
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Methodist Homes
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- Figure 93: Financial analysis of Methodist Homes, 2011-15
- Company strategy
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Minster Care Group
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- Figure 94: Financial analysis of Minster Care Group, 2011-15
- Company strategy
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Priory Group
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- Figure 95: Financial analysis of the Priory Group, 2011-15
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- Figure 96: Financial analysis of the Priory Education Services, 2011-15
- Group strategy
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Sanctuary Care
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- Figure 97: Financial analysis of Sanctuary Care, 2011-15
- Company strategy
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- Figure 98: Profiled companies’ turnover, 2011-15
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Forecast
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- 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
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- Figure 99: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2017-21
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- Figure 100: Forecast segmentation of the UK residential and nursing care market, by type of purchaser, 2017-21
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- Figure 101: Forecast UK residential and nursing care, by number of registered places, 2017-21
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- 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
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- Figure 104: Forecast UK residential and nursing care by number of homes, 2017-21
- Sheltered housing
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- Figure 105: Forecast UK sheltered housing units, 2017-21
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- 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
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- 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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