Care England, the largest and most diverse representative body for adult social care providers in England, has responded to the Care Quality Commission’s annual State of Care report, published today (23 October), while warning that its findings strengthen the case for a national approach to market sufficiency, commissioning and sustainable funding.
The report finds that 7 in 10 of the 3,783 care homes assessed under CQC’s current framework were rated Good or Outstanding, rising to 8 in 10 homecare services. It also finds that small care homes received the strongest ratings under the current framework, even as more than 1,500 small homes disappeared between April 2012 and April 2026. At the same time, the number of large nursing homes increased by 21% while medium nursing homes fell by 28%, illustrating the pace at which the shape of the market is changing.
Alongside these headline figures, CQC describes a social care market changing ‘by accident rather than design’. It identifies major variation in local authority commissioning, increased consolidation and institutional ownership, and growing reliance on people who self-fund. CQC says council fees remain below the rising costs of delivering care, with providers increasingly looking to self-funders to remain viable. In 2025/26, 37% of people living in care homes were self-funders, while self-funder income among older people’s care homes in CQC’s Market Oversight scheme rose from 48% to 52% over two years. CQC warns that this risks reducing choice and capacity for people who rely on council-funded support.
Professor Martin Green OBE, Chief Executive of Care England, said:
“Responsible external investment in social care is essential. The sector needs capital for buildings, technology, workforce and new capacity. But consolidation cannot be mistaken for sufficiency. CQC tells us that small homes are achieving the strongest ratings while more than 1,500 have disappeared since 2012. We should not allow good smaller-scale provision – a marker of how much choice there is for those who need care – to be lost simply because it cannot absorb costs that commissioners do not meet.
“CQC’s 27% Market Oversight ‘profitability’ figure also needs to be understood properly. It is an EBITDARM measure, before major costs such as rent, depreciation and interest, and it applies to a selected group of large providers. It is not net profit, and it should not be used as shorthand for what the whole sector earns. Our Financial Health of SME Care Homes report shows the financial pressure behind this trend; wage costs have risen sharply, cash cover has reduced and payment delays have increased, while our stress testing shows that even relatively modest cost increases or reductions in fee income can push a significant proportion of smaller providers into financial distress and could explain why so many have left the market.”
The report is stark on local authority commissioning. CQC found significant variation across England and states that inconsistent fee-setting, failure to account for workforce pressures and weak provider engagement directly constrain quality and sustainability. It also found that access criteria were sometimes “shaped by financial or political considerations rather than people’s assessed need”. Performance against the care provision quality statement, which includes commissioning, was one of the two areas most likely to receive the lowest scores. Care England said this demonstrates that commissioning processes are not separate from quality: they shape whether providers can recruit and retain staff, invest, accept placements and maintain continuity of care.
Professor Martin Green continued:
“Commissioning is not an administrative process sitting behind care; it directly influences the quality people receive. When fees lag behind costs, uplifts arrive late, payments are delayed or capacity is fragmented across contracts, risk is transferred from the commissioner to the provider and ultimately to the person in receipt of care.
We need national commissioning standards and a national plan for sufficiency so government, local authorities and the National Care Service can see where capacity is being lost and act before services become unviable. Commissioners must pay agreed fees on time, make uplifts effective from the date costs arise and base fees on the real cost of safe, good-quality care.
The same principle must apply to the Fair Pay Agreement. Better pay is essential, but the FPA will only strengthen care if every additional employment cost is fully funded through commissioning from day one. Providers cannot finance a national workforce settlement through thin cash reserves or by asking self-funders to subsidise public placements.”
The report also highlights reductions in international recruitment, continuing workforce turnover, local authority weaknesses in prevention, safeguarding, transitions and support for family carers, and substantial regional variation. Care England recognises CQC’s progress in increasing inspection activity and the direction towards more collaborative and proportionate regulation, while calling for the underlying data to become more transparent. Care England is asking CQC to publish usable data on ownership, service size, regional variation, assessment coverage and assessment route. As current-framework assessments have been largely risk-based, clear coverage data is essential if comparisons are to be interpreted fairly.
Professor Martin Green concluded:
“CQC is right that none of these issues can be considered in isolation. The report shows that quality is shaped not only by leadership within providers, but by the commissioning, funding, workforce and market conditions around them. We cannot continue with a system where access to care, provider viability and the ability to invest depend so heavily on postcode or someone’s ability to self-fund.
Government now has the opportunity to turn the National Care Service from an ambition into a practical plan for sufficiency; fair and timely commissioning, fully funded workforce reform, transparent market data, responsible investment and strong, consistent regulation. Care England will work with CQC, government, councils and providers to turn this evidence into action.”
