National Care Service Vision Leaves the Care Home Market with “More Questions than Answers”
The founder and executive chairman of LaingBuisson, William Laing, has outlined a number of potential implications for care home operators, residents and investors following Prime Minister Andy Burnham’s announcement of plans to establish a National Care Service (NCS).
Mr Burnham announced at the Labour Party conference that a National Care Service would be established in the next Parliament, providing free personal care for older people based on need rather than ability to pay. The Government says the service would be introduced in phases as funding, workforce capacity and provider capacity are developed.
The plans would be partly funded by changes to the State Pension Triple Lock from April 2030. The Government has said pensions would continue to rise annually by at least inflation or 2.5%, while a new mechanism would ensure they retain their value relative to average earnings. It estimates the changes could reduce state pension spending by £15 billion a year by the end of the 2030s.
Baroness Casey’s independent Commission on adult social care is expected to make recommendations on how and when the National Care Service should be developed, with its report due in summer 2027.
Against this backdrop, Mr Laing said the Government had established the broad vision for the NCS, but that significant details remained unresolved.
He said the Government had yet to set out the precise structure of the service, including how care would be commissioned, funded and delivered, and suggested that its eventual design could depend on further public consultation and deliberation.
Local authorities could have greater commissioning role
Focusing specifically on care homes, Mr Laing said one possible outcome would be for local authorities to become the principal agencies responsible for administering the National Care Service.
He suggested that, under such a model, a substantially higher proportion of care home placements could be commissioned through local authorities than at present.
Mr Laing also questioned how the existing arrangements for NHS Continuing Healthcare and NHS-funded nursing care would fit within a new national system, suggesting that these could potentially be incorporated into the wider National Care Service framework.
These are among the issues that will require clarification as the Government develops its proposals.
Under the current system, people receiving local authority-funded care may be required to contribute towards their care costs following a financial assessment. The Government’s announcement, however, states that the proposed NCS would provide free personal care and that the service would not erode people’s savings.
Mr Laing argued that residents could nevertheless continue to face charges associated with accommodation and living costs, although the precise treatment of such costs remains to be determined.
He also highlighted the question of whether people receiving care could continue to use their assets, including property, to meet such costs. The Government has not yet published detailed rules setting out how accommodation and other non-care costs would operate under the proposed NCS.
Potential changes to care home funding and choice
Another area highlighted by Mr Laing was the future of care home fees and resident choice.
He suggested that changes could eventually be made to the rules governing third-party top-up payments, potentially allowing people receiving publicly funded care to contribute additional amounts if they wanted to access homes offering higher levels of accommodation or amenities.
Such arrangements, he said, could become particularly relevant if the NCS resulted in a greater proportion of care home placements being publicly commissioned.
Mr Laing said the potential changes could have significant implications for the existing self-funded care home market, which has been an important source of income and investment within the sector.
He suggested that, depending on how the final system was designed, some of the existing self-pay market could move towards local authority commissioning, supplemented by greater flexibility for individuals to make additional payments.
However, he stressed that the eventual impact on care home operators and investors would depend on the detailed structure of the service and remained some way off.
Homecare presents different challenges
Mr Laing also highlighted the potential implications of the proposed National Care Service for homecare.
The Prime Minister has placed an emphasis on prevention and earlier intervention as part of his wider vision for social care. Burnham has argued that a reformed system should focus on preventing people from reaching crisis point and reduce pressure on the NHS.
Mr Laing said achieving such a shift would represent a significant challenge, given the way local authority homecare has traditionally been commissioned.
He pointed to the widespread use of short, scheduled care visits and argued that there had been relatively limited development of outcome-based commissioning models capable of supporting a greater emphasis on prevention.
He also questioned whether financially constrained local authorities would have the resources and capacity required to implement such a transformation.
Future role of independent care providers
The future role of independent-sector providers is another significant question raised by the proposed reforms.
Mr Laing noted that the overwhelming majority of social care is currently delivered by independent providers, with the sector comprising both for-profit and not-for-profit organisations.
He said there had been discussion about increasing the role of public provision within social care, but argued that a wholesale transfer of provision into public ownership would face substantial financial and practical obstacles.
The Government has yet to set out whether the proposed National Care Service would involve significant changes to the ownership structure of social care provision.
Instead, the Government’s initial announcement has focused on creating a national framework for free personal care, with the service to be developed in phases alongside investment in workforce and provider capacity.
clear.
