+353-1-416-8900REST OF WORLD
+44-20-3973-8888REST OF WORLD
1-917-300-0470EAST COAST U.S
1-800-526-8630U.S. (TOLL FREE)

Homecare and Supported Living UK Market Report (5th Edition)

  • Report

  • 415 Pages
  • October 2022
  • Region: United Kingdom
  • LaingBuisson
  • ID: 5463677

Resilient in the face of Covid-19 but what next for homecare and supported living?

The fourth edition of the Homecare and Supported Living UK Market Report is indispensable reading for anyone involved in this fragmented and complex market. This includes advisors, investors, commissioners and policymakers as well as service providers. Read together with Adult Specialist Care and Care Homes for Older People UK Market Reports, Homecare and Supported Living completes a series which illustrates the state of non-residential and residential care for adults over the age of 18 and gives a comprehensive market picture not found anywhere else.

Written during the winter of 2022/23, the report includes fully updated data and market insights that accurately portray how the market has developed in the past 18 months following the Covid-19 pandemic.

The new report shows the value of the UK market for homecare and supported living to be £11.5 billion (2021/22) and estimates that around 670,000 people are in receipt of homecare or support services in the UK. These services, together, represent a strong intermediate step on the ‘ladder of care’, and are becoming more prominent as pressures on councils’ social care budgets see some care receivers shift from care home care to community-based homecare or supported living.

The report also includes the findings of new research into ‘tech’ innovations that support the homecare and supported living sector, and social care generally. With the Covid-19 pandemic accelerating digitalization across the sector, this has provided opportunities for tech-enabled independent sector providers to diversify and expand into a more central, and more profitable, role in integrated care systems.

 

What the report covers

  • Market
  • Politics and Regulation
  • Payors
  • Major Providers
  • Investors
  • Staffing
  • Market Potential
  • Appendices
  • Glossary
  • Key Legislation

  •  

    Regulators

  •  

    Trade bodies

  •  

    Financial Appendix

Who is the report for

  • C-suite professionals working in homecare and supported living providers
  • Local Government and Clinical Commissioning Group commissioners
  • Homecare agencies
  • Directors of Adult Social Services
  • Care advisors
  • Banks and other financial institutions
  • Investors and private equity
  • Long-term care insurance providers
  • Local and national government
  • Care sector trade bodies
  • Lawyers
  • Policy advisors
  • Think tanks
  • Management consultants

Table of Contents


EXECUTIVE SUMMARY
1. MARKET
1.1 Market definition
1.2 Further context on market definitions
1.2.1 Adult social care services
1.2.2 Non-residential adult social care services
1.2.3 Complex care
1.2.4 Clinical homecare
1.2.5 Virtual wards
1.2.6 NHS community health services
1.2.7 Informal care
1.2.7.1 Changes in families’ willingness to provide informal care
1.3 Market size
1.3.1 Market value of homecare and supported living
1.3.2 Market value of ‘other’ non-residential social care services
1.3.3 Market value of clinical homecare
1.3.4 Market value of ‘Technology Enabled Care’ and telehealth
1.3.4.1 Technology Enabled Care (TEC) market value
1.3.4.2 Telehealth market value
1.3.4.3 Virtual wards
1.4 Segmentation
1.4.1 Segmentation of homecare and supported living
1.4.2 Segmentation of other non-residential care services
1.5 Market trends - historical
1.5.1 Austerity 2010/11?
1.5.2 Activity trends
1.5.2.1 Homecare activity trends - service users and contact hours
1.5.2.2 Supported living activity trends ? service users and contact hours
1.5.3 Market value historic trends
1.5.3.1 Homecare market value trends
1.5.3.2 Supported living market value trends
1.5.3.3 Clinical homecare market value trends
1.5.3.4 Telecare market value trends
1.5.3.5 Virtual wards
1.6 Funding
1.6.1 Funding of homecare and supported living
1.6.2 Funding of ‘other’ non-residential social care services
1.6.3 Funding of clinical homecare
1.6.4 Funding of telecare (Technology Enabled Care)
1.7 Supply and demand
1.7.1 Homecare and supported living volume of demand
1.7.1.1 Impact of Covid-19 on volume of demand for homecare
1.7.2 Supported living volume of demand
1.7.2.1 Impact of Covid-19 on volume of demand for supported living
1.7.3 Regional variations in demand and supply
1.7.4 Workforce - will labour shortages continue to constrain supply?
1.7.4.1 Recruitment & retention - workforce statistics from Skills for Care and the ONS Labour Force Survey
1.7.4.2 Will labour availability be a hard constraint on future expansion of supply
1.7.5 Inadequate rewards for enterprise as a constraint on expansion of supply
1.7.6 Constraints on demand
1.8 Drivers of demand - future growth prospects
1.8.1 Homecare drivers of demand
1.8.1.1 Demography
1.8.1.2 Recognition of the need to invest in social care in order to supportthe NHS
1.8.1.3 Technological counter drivers of demand for homecare
1.8.1.4 Ability and willingness to pay
1.8.1.5 Conclusions on drivers of homecare demand
1.8.2 Supported living drivers of demand
1.8.2.1 Learning disabilities demand drivers
1.8.2.2 Projections of supported living services for all younger adults
1.8.3 Clinical homecare drivers of demand
1.8.4 Telecare and telehealth drivers of demand
1.8.4.1 Telecare
1.8.4.2 Telehealth
1.9 Homecare and supported living in Scotland and Wales
1.9.1 Scotland
1.9.2 Wales
1.10 Business models - homecare and supported living
1.10.1 Common features of all homecare and supported living business models
1.10.1.1 Asset-light business model
1.10.1.2 Providers as intermediaries between care workers andcustomers
1.10.1.3 Low pay
1.10.2 Full service (employed carers) or introduction only agencies(self-employed carers)
1.10.3 Mainstream ‘time and task’ dispersed homecare (short duration visits)
1.10.4 Live-in homecare
1.10.5 Supported living and homecare delivered to clustered settings
1.10.5.1 Housing with care developments
1.10.5.2 Supported living in clustered settings
1.10.6 Tech-enabled homecare providers
1.10.7 Complex care
1.10.8 Hospital discharge and reablement
1.10.9 Franchises
1.10.10 Outcome-based commissioning
1.10.11 Clinical homecare
1.10.12 Telecare
1.10.13 Telehealth
1.11 Key operational statistics
1.11.1 Hourly charge-out rates
1.11.2 Cost of providing domiciliary care
1.11.3 Domiciliary care rates actually paid by different local authorities
1.11.4 Operating margins
1.12 Performance measures
1.12.1 EBITDA as a percentage of revenue
1.12.1.1 Profitability - EBITDA as a percentage of revenue
1.12.1.2 Supported living EBITDA as a percentage of revenue
1.12.2 CQC ratings in England
1.12.3 Service user satisfaction in England

2. GOVERNMENT POLICY AND REGULATION
2.1 History: emergence of the independent sector as the dominant supplier of adult social care services from the late-1970s
2.1.1 Emergence of a large scale, publicly financed homecare sector from 1993
2.1.2 Benign financial environment 2003?2009
2.1.3 Austerity 2011/12-
2.1.4 Why did outsourcing of social care become mainstream so rapidly?
2.2 Policy context - much cross-party consensus, though not on funding
2.3 Main policy areas impacting on homecare and supported living
2.3.1 Funding of publicly paid services
2.3.2 Regulation
2.3.3 Strategic planning and commissioning framework for health and social care
2.3.3.1 Health and social care integration in Scotland
2.3.4 Delayed discharges ? inadequate integration at the health and social care interface
2.4 Regulation of social services
2.4.1 Underpinning legislation in England - Health and Social Care Act 2008
2.4.1.1 Fundamental standards
2.4.2 Scotland, Wales and Northern Ireland
2.4.3 Scope of regulation - services covered and not covered in England
2.4.4 Scope of regulation in Wales and Scotland
2.4.5 Registrable entities
2.4.6 History of last two decades ? deregulation accompanied by tougher enforcement
2.4.6.1 Replacement of National Minimum Standards with less prescriptive Essential Standards
2.4.6.2 Fundamental Standards of Quality and Safety 2014?
2.4.6.3 Risks to providers from breaches of regulations and Fundamental Standards
2.4.6.4 Stronger enforcement powers
2.4.6.5 CQC market oversight regime
2.4.6.6 CQC’s next phase of regulation consultation
2.4.6.7 CQC’s new strategy for regulation ? 2021
2.4.6.8 Providers’ views of regulation
2.4.7 Scotland’s rating system
2.5 Regulation of payroll costs
2.5.1 National Minimum Wage and National Living Wage
2.5.2 Pension legislation
2.6 Other government policies relating to adult social care
2.6.1 Personalisation and self-directed care: Direct Payments and personal budgets
2.6.2 Council charges for homecare
2.6.3 National eligibility criteria
2.6.4 Other aspects of The Care Act 2014
2.6.4.1 General responsibilities of local authorities
2.6.4.2 Market shaping - duty to promote diversity and quality and to ensure market sustainability
2.6.4.3 Assessment of need and eligibility criteria
2.6.4.4 Duty of local authorities to meet needs for care and support
2.6.4.5 Contracting out of core local authority functions
2.6.5 National Service Framework for older people and the single assessment process
2.6.6 Consumer information to support choice
2.6.7 Long-term care costs - a fair balance between the state and property owners

3. PAYORS
3.1 Payor profile overview
3.1.1 Supported living payor profile
3.2 Financial environment by payor type
3.2.1 Public funding - austerity not yet over for social care
3.2.1.1 Sources of public funding
3.2.1.2 Adequacy of public funding
3.2.2 Current social care funding situation and outlook for 2023/24
3.2.2.1 Impact of public funding constraints of homecare and supported living providers
3.2.3 Social care charging reforms
3.2.4 Expansion of supported housing - an exception to austerity
3.2.5 Private funding
3.3 Market dynamics by payor type - balance of market power
3.3.1 Publicly funded services - exercise of monopsony purchasing power
3.3.2 Private and quasi-private consumers - market power balanced
3.3.3 Insurance and other intermediaries

4. MARKET STRUCTURE
4.1 Market structure ? homecare and supported living
4.1.1 Provider sector and service type
4.1.2 Spectrum of providers
4.1.3 Absence of diversification among major homecare groups
4.1.4 Market concentration and market leaders by revenue
4.1.5 Scale of individual services
4.1.6 Exits and entries
4.1.6.1 Exits
4.1.6.2 Entries
4.1.7 Business failures and recapitalisations
4.1.8 Sources of capital
4.1.8.1 Private equity
4.1.8.2 Publicly traded companies
4.1.8.3 Other sources of capital
4.1.9 Segmentation by provider sector
4.1.10 Economies of scale and scope
4.1.11 Value of brands
4.1.12 Diversification
4.2 Market structure - clinical homecare
4.2.1 Market concentration and market leaders by revenue
4.2.2 Consolidation
4.2.3 Exits and entries
4.2.4 Business failures and recapitalisations
4.2.5 Sources of capital
4.2.6 Segmentation by provider type
4.2.7 Economies of scale and scope

5. INVESTORS
5.1 Major transactions in the homecare and supported living space
5.2 Current investors in homecare and supported living and their portfolios
5.2.1 Amp Capital
5.2.2 Apposite Capital
5.2.3 Business Growth Fund (BGF)
5.2.4 Bridges Fund Management
5.2.5 Charterhouse Capital Partners
5.2.6 Elysian Capital
5.2.7 G Square
5.2.8 iCON Infrastructure
5.2.9 Limerston Capital
5.2.10 Livingbridge
5.2.11 Montreux Capital Management
5.2.12 OMERS Private Equity
5.2.13 Passion Capital
5.2.14 Sovereign Capital Partners
5.2.15 Spring Ventures
5.2.16 Summit Partners
5.2.17 Vitruvian Partners
5.2.18 Weight Partners Capital
5.2.19 Wellspring Capital Management
5.2.20 Westbridge Capital
5.2.21 Wren House Infrastructure

6. MARKET POTENTIAL
6.1 Opportunities for diversifying and expanding into adjacent segments
6.2 Alternative models of social care
6.2.1 Local Area Coordination model
6.2.2 The Buurtzorg model
6.2.3 Scope for applying alternative models in the UK
APPENDIX 1. GLOSSARY
APPENDIX 2. REGULATORS
APPENDIX 3. TRADE BODIES AND ASSOCIATIONS
APPENDIX 4. MAJOR PROVIDERS OF HOMECARE AND SUPPORTED LIVING SERVICES
APPENDIX 5. FINANCIAL APPENDIX

LIST OF TABLES
Table 1.1 Registered homecare and supported living services (locations) in England and devolved administrations, all sectors (for-profit, not-for-profit and statutory), February 2023
Table 1.2 Value of supply of homecare and supported living by sector and age, England and UK estimate, 2021/22
Table 1.3 Estimated value of independent sector supply of homecare and supported living, by age, source of funding and support need, England, £m, 2021/22
Table 1.4 Estimated value of independent sector supply of homecare by age, source of fundingand whether short duration visits or sessional/live-in/sleeper, £m, England,2021/22
Table 1.5a English local authority funded contact hours (millions) provided in-house andoutsourced to the independent sector, homecare, 1992-2022
Table 1.5b English local authority funded contact hours (millions) provided in-house andoutsourced to the independent sector, homecare and supported living, 2015?2022
Table 1.6 Intensity (hours per resident per week) of local authority funded homecare, allclients, England, 2000?2014
Table 1.7 Estimated number of homecare and supported living services registered with CQC,England by region, number of service users and number per 1,000 population,November 2022
Table 1.8 Staff turnover rates in independent sector domiciliary and residential care, England,2021/22
Table 1.9 Macro-factors likely to relieve staff vacancy rates and other workforce pressuresfaced by social care providers during 2023
Table 1.10 Activities of daily living
Table 1.11 Projected units of supported housing by client group in England, base case, inthousand units, 2015?2030
Table 1.12 Gross expenditure on selected domiciliary personal social services, Wales, £m,2014/15
Table 1.13 Leading providers of homecare services into extra care (a.k.a. housing with care)developments, England, mid-2022
Table 1.14 Pro forma minimum cost structure of the short duration visiting model of homecare,illustrated at National Living Wage for all care workers, 2023/24
Table 1.15 Revenues, costs and operating margins (EBITDA) of major (£30m+ annual revenue)solus homecare and supported living providers with consolidated accounts around2021/22
Table 1.16 EBITDA margins as a percentage of turnover for operators whose primary businessis homecare or supported living and which post full accounts in company format,by year end of accounts
Table 2.1 Costs of local authority in-house and outsourced social care services,England average, 2021/22
Table 2.2 Minimum employers stakeholder pension contributions
Table 2.3 People using community-based services commissioned by English councils, by typeof commissioning arrangement, during 2021/22
Table 2.4 People using community-based services commissioned by English councils, by typeof commissioning arrangement, percentages, during 2019/20
Table 3.1 Sources of funding for English local authorities, core spending power 2015/16 to2023/24
Table 3.2 Median hourly cost of domiciliary care including return on operations (profit) at thebeginning of financial year 2022/23 as determined by the national DHSC mandated‘Fair Cost of Care’ exercise carried out in the summer of 2022, England by localauthority
Table 4.1 Numbers of CQC registered homecare and supported living services and serviceusers by provider sector and CQC service type, England, February 2023
Table 4.2 Top 50 independent sector (for-profit and not-for-profit) providers of homecare andsupported living services, England, February 2023
Table 4.3 League table of major independent sector providers of homecare and supportedliving services (all client groups), by turnover, UK, c.2021/22
Table 4.4a Distribution of registered homecare and supported living services by caseloadband and provider type, England, February 2023
Table 4.4b Distribution of registered homecare and supported living service users by caseloadband and provider type, England, February 2023
Table 4.5 Market leading independent sector providers of clinical homecare, by annualturnover, UK, 2019
Table 5.1 Significant merger and acquisition transactions in the homecare and supportedliving space, UK, 2010-2023
Table 5.2 Private equity (broadly defined) owners of homecare and supported living servicegroups, UK, February 2023

LIST OF FIGURES
Figure ES1 Distribution of average fees (£ per hour) for homecare purchased by councils fromindependent sector providers, England, 2021/22
Figure ES2a Distribution of homecare and supported living services by caseload band, %,England, February 2023
Figure ES2b Distribution of homecare and supported living service users by caseload band, %,England, February 2023
Figure 1.1 Scope of the report
Figure 1.2 Value of supply of homecare (including complex care), supported living, othernon-residential care services, telecare and clinical healthcare, £m, UK, 2021/22
Figure 1.3 Value of supply of homecare and supported living by type of service and sector ofprovision, £m, England and UK estimate, 2021/22
Figure 1.4 Value of other1 non-residential social care services funded by councils, £m, Englandand UK estimate, 2021/22
Figure 1.5 Segmentation of homecare services into short duration visits (hour or less) andsessional/live-in/sleeper arrangements, all ages, £m, England, 2021/22
Figure 1.6 Gross current expenditure on adult social care by local authorities, in cash andreal terms, £bn England, 2005/06 to 2021/22
Figure 1.7 Local authority commissioned homecare contact hours (millions) by sector ofprovision, England, 1992-2022, and number of households/persons receiving localauthority funded homecare at year end, England, 1992?2014
Figure 1.8 Local authority commissioned supported living contact hours1 (all ages) andresidential care (residents aged 18-64), England 2014/15 to 2021/22
Figure 1.9 Value of independent sector supply of homecare by funding source in cash andreal terms,England £m, 2014/15 to 2021/22
Figure 1.10 Estimated number of adults receiving NHS Continuing Health Care (CHC) in theirown homes and in residential settings at financial year end, England, 2003-2022
Figure 1.11 Value of independent sector supply of supported living by funding source in cashand real terms, £m, England, 2014/15 to 2021/22
Figure 1.12 Clinical homecare market growth, independent sector providers only, UK,2004?2022
Figure 1.13 Sources of funding for homecare provided by the independent sector and in-housecouncil teams, £m, England, 2021/22
Figure 1.14 Sources of funding for supported living provided by the independent sector andin-house council teams, England, £m, 2021/22
Figure 1.15 Number of adults (aged 18+) receiving formal or informal care, all funding sources,UK, 2021/22
Figure 1.16 Percentage of adults (18+) receiving formal or informal care by age band, all fundingsources, UK, 2015-2021
Figure 1.17 Impact of Covid on trends in council-funded homecare and care home placementsof older people (65+), England 2000?2022
Figure 1.18 Vacancy rates in social care by role, England, 2012/13 to 2021/22
Figure 1.19 Staff vacancy rates by region for homecare and care homes, England, 2021/22
Figure 1.20 Estimated proportion of the adult social care workforce with a British nationality,by region, 2021/22
Figure 1.21 Indices of demographic driven demand for domiciliary care for older people, andprojections of working age population by age, UK, 2021?2031
Figure 1.22 EBITDA margins as a percentage of turnover for operators whose primary businessis homecare or supported living and which post full accounts in company format,by year end of accounts
Figure 1.23 Net Incoming Resources as a percentage of Total Incoming Resources for operatorswhose primary business is homecare or supported living, and which post profit andloss in a charity format, by year end of accounts
Figure 1.24 Illustrative projection of the value of demand for homecare services at constant(2021/22) prices (all funding sources (council, private and NHS), £m, UK,2021?2031
Figure 1.25 Years spent in poor health from age 65, males and females, England, 2000?2002up to 2017?2019
Figure 1.26 Need for help to perform Activities of Daily Living (ADLs) and Instrumental Activitiesof Daily Living (IADLs)
Figure 1.27 Pensioner households’ median net disposable income after housing costs at2017/18 prices, UK, 1994/95 to 2020/21
Figure 1.28 Distribution of pensioner households’ median net disposable income per weekafter housing costs, UK, 2015/16 to 2020/21
Figure 1.29 Distribution of savings among pensioner households, UK, 2020/21
Figure 1.30 Service users in residential settings (occupied beds), younger adults aged 18?64,England, 1990 - 2021
Figure 1.31 Local authority funded homecare and Direct Payment activity, Scotland,1998?2018
Figure 1.32 Local authority funded homecare intensity (contact hours per client per week), Scotland, 1998?2018
Figure 1.33 Distribution of local authority funded homecare contact hours by provider sector,Scotland, 1998?2018
Figure 1.34 Local authority funded homecare and Direct Payment activity for adults aged 18+, Wales, 2002?2019
Figure 1.35 Local authority funded homecare intensity (contact hours per client per week), Wales, 2002?2016
Figure 1.36 Distribution of local authority funded homecare contact hours by provider sector, Wales, 2008?2016
Figure 1.37 Distribution of average fees for homecare purchased by councils from independent sector providers, Great Britain, £ per hour, 2021/22
Figure 1.38 Comparative Fundamental Standards ratings of nursing homes, residential homes and homecare services, England, October 2022
Figure 1.39 Fundamental standards ratings of homecare services by sector of provision, England, October 2022
Figure 1.40a Satisfaction with long-term care and support, by support setting, England, 2021/22
Figure 1.40b Satisfaction with self-perceived quality of life, by support setting, England, 2021/22
Figure 2.1 Delayed discharges from hospital, England discontinued data series 1997?2020
Figure 2.2 Delayed discharges from hospital, England, new data series from November 2021
Figure 2.3 Delayed discharges by length of delay, acute and community NHS beds, Scotland, 2000?2020
Figure 2.4 Delayed transfers of care, NHS patients, Wales, 2003?2020
Figure 2.5 National Living/Minimum Wage rates, 2001-2024/25
Figure 3.1 Sources of funding for supported living providers, £m, England, 2021/22
Figure 3.2 Sources of funding for homecare providers, £m, England, 2021/22
Figure 3.3 Trends in unit cost (£ per hour) of domiciliary care purchased by English local authorities vs. National Living Wage adult rate (as a proxy for domiciliary care providers’ labour costs
Figure 4.1 Market concentration trends, share of independent sector homecare and supported living revenue held by the top four and top ten providers, UK
Figure 4.2a Distribution of homecare and supported living services by caseload band, %, England, February 2023
Figure 4.2b Distribution of homecare and supported living service users by caseload band, %, England, February 2023
Figure 6.1 Emergency admissions to NHS hospital, England, August 2010-January 2023