Residential and nursing care home market

Our vision

Our vision for the next five years is to:

• Develop an innovative and sustainable care market that is responsive to the needs of local people, delivers high quality care, and provides value for money
• Improve outcomes for local people by supporting care providers to enable choice, deliver person-centred care, manage risk, and promote independence and well-being

Over the next 12 months, we will be working with NHS partners, care providers, and other stakeholders to develop a full strategic programme to deliver our vision.

Challenges

The challenges we face in providing accommodation-based support for older people include:

• The complexity of the local health and care system makes it difficult for providers to get a clear picture of what we need and the confidence that this will be properly resourced
• The fees that local health and social care commissioners can afford are regarded by many care homes as insufficient to meet costs, particularly in the current economic environment
• Covid-19 has resulted in high vacancy rates across older adult care homes, and providers are reporting that they are not getting the level of private or council referrals to address. Some providers have limited capacity due to their inability to recruit and retain the staff needed to deliver safe care. Read more about workforce challenges.
• The fair cost of care review highlighted a particular issue with nursing homes, with the majority of providers who participated in this review not securing sufficient referrals to attract the level of funded nursing care required to meet the costs of the nurse staff establishment. Some providers are therefore de-registering as nursing homes or are reducing the proportion of nursing beds and increasing the number of beds available for residential care. Read the fair cost of care review on the market sustainability and fair cost of care webpage.
• Although the department of health and social care has given an indication of the funds that will be available to support market sustainability, the lack of certainty about the level of inflationary pressures makes it difficult to confirm how far Norfolk will be able to move towards the median rates calculated as part of the fair cost of care review over the next few years
• Recruitment and retention of care staff across all sectors continues to be a significant challenge, particularly for registered nurses. Although recruitment and retention are challenges across the whole of Norfolk, there are areas within Norfolk where the problems are more acute. This means that it is easier for providers to set up services in the more urban areas, thereby limiting choice for people living in the more rural areas.
• The level of acuity of need continues to rise, which will require an agreed-upon approach to health
• The quality of provision for care homes and care at home remains low. Norfolk ranks lowest among comparators and other East of England local authorities for older adult care home provision. Read more about quality challenges.

Key data

The 2022-23 spending by service type includes the number of people accessing services for people with mental ill-health needs, the number of accredited locations, the number of accredited places, and the percentage of services with a 'good' or 'outstanding' rating. This includes people accessing both long- and short-term services:

Residential care home services for older people (aged 65 years old and over)

• Our spend on residential care home services for older people (aged 65 years old and over) in 2022-2023: £128m
• The number of people accessing residential care home services for older people (aged 65 years old and over) funded by us in 2022-2023: 2,508
• The number of Norfolk County Council (NCC) accredited locations (buildings) registered for older people (aged 65 years old and over) by March 2023: 184 (an accredited service is a service that we can make placements to, so it does not cover the entirety of the market, especially in home care)
• The number of NCC-accredited places (beds) registered for older people (aged 65 years old and over) by March 2023: 5,997 (an accredited service is a service that we can make placements to, so it does not cover the entirety of the market, especially in home care)
• The percentage of locations for older people (aged 65 years old and over) registered and inspected by the care quality commission (CQC) with a 'good' or 'outstanding' rating from the CQC or provider assessment and market management solution (PAMMS) as of 1 March 2023: 70.6% (excluding services that have not yet been inspected)

Nursing home services for older people (aged 65 years old and over)

• Our spend on nursing home services for older people (aged 65 years old and over) in 2022-2023: £19.2m
• The number of people accessing residential nursing home services for older people (aged 65 years old and over) funded by us in 2022-2023: 331
• The number of NCC-accredited locations (buildings) registered for older people (aged 65 years old and over) by March 2023: 54 (an accredited service is a service that we can make placements to, so it does not cover the entirety of the market, especially in home care)
• The number of NCC-accredited places (beds) registered for older people (aged 65 years old and over) by March 2023: 2,587 (an accredited service is a service that we can make placements to, so it does not cover the entirety of the market, especially in home care)
• The percentage of locations for older people (aged 65 years old and over) registered and inspected by the CQC with a 'good' or 'outstanding' rating from the CQC or PAMMS as of 1 March 2023: 61.1% (excluding services that have not yet been inspected)

Supply and demand

As of July 2023, there are 238 care homes delivering care and support to older adults.

Investment in new independent living continues, which will further increase the average acuity of need within residential care.

The older people's dashboard, developed before Covid-19, identified an oversupply of standard residential accommodation but an undersupply of enhanced residential and nursing provision. Since Covid-19, there have been high vacancy rates across all care home provisions. However, we are still struggling to source affordable, enhanced residential care for complex needs and good quality nursing provision.

During 2022-2023, work was undertaken to refresh the original pre-Covid-19 demand modelling for older adult residential and nursing care. The output from this work is:

Future needs in the older people's care home market

Two five-year scenarios for Norfolk older people's care home needs have been modelled:

1. Scenario one gives a higher prediction of future need as it has a strong link to the projected increase in the over 75 Norfolk population and anticipates higher demand for enhanced and complex residential alongside reduced demand for standard residential care
2. Scenario two gives a flatter prediction of future need that is more in line with the patterns of the last four years, with a more moderate increase in enhanced and complex residential alongside reduced demand for standard residential care

Both scenarios contain an increase in beds required by 2024 to rectify current shortage areas, plus allowances for various factors applying downward pressure on demand, including increasing independent living availability from 2025-2026.

Scenario one anticipates an increase in overall bed usage in the next five years (283), while scenario two anticipates a small reduction (154) in overall bed usage. This creates an upper and lower 'line' with the reality expected to be somewhere in between.

The anticipated increase and decrease in the number of care places required for each type of care for each of the two scenarios:

Market analysis older people accommodation based support

Scenario one

The number of occupied beds required in older people's care homes in Norfolk for the years 2023 to 2028 according to scenario one:

Residential care - Norfolk County Council (NCC) older people's enhanced/complex long-term care:

• 2023: 1,433
• 2024: 1,537
• 2025: 1,571
• 2026: 1,611
• 2027: 1,645
• 2028: 1,675
• Five year change: increase of 242 occupied beds required  

Residential care - NCC older people's standard care and non NCC rate long-term care:

• 2023: 1,057
• 2024: 982
• 2025: 919
• 2026: 846
• 2027: 783
• 2028: 727
• Five year change: decrease of 330 occupied beds required 

Nursing care - NCC older people's long-term care:

• 2023: 328
• 2024: 407
• 2025: 417
• 2026: 425
• 2027: 432
• 2028: 439
• Five year change: increase of 111 occupied beds required 

Residential, nursing and self/other funded care - All long-term and short-term care:

• 2023: 3,308
• 2024: 3,332
• 2025: 3,410
• 2026: 3,454
• 2027: 3,513
• 2028: 3,568
• Five year change: increase of 260 occupied beds required

Scenario one total older people's care home occupancy:

• 2023: 6,126
• 2024: 6,258
• 2025: 6,317
• 2026: 6,335
• 2027: 6,372
• 2028: 6,409
• Five year change: increase of 283 occupied beds required 

Scenario two

The number of occupied beds required in older people's care homes in Norfolk for the years 2023 to 2028 according to scenario two:

Residential care - Norfolk County Council (NCC) older people's enhanced/complex long-term care:

• 2023: 1,433
• 2024: 1,524
• 2025: 1,547
• 2026: 1,573
• 2027: 1,596
• 2028: 1,616
• Five year change: increase of 183 occupied beds required

Residential care - NCC older people's standard care and non NCC rate long-term care:

• 2023: 1,057
• 2024: 980
• 2025: 910
• 2026: 832
• 2027: 763
• 2028: 703
• Five year change: decrease of 354 occupied beds required

Nursing care - NCC older people's long-term care:

• 2023: 328
• 2024: 404
• 2025: 404
• 2026: 404
• 2027: 404
• 2028: 404
• Five year change: increase of 76 occupied beds required

Residential, nursing and self/other funded care - All long-term and short-term care:

• 2023: 3,308
• 2024: 3,308
• 2025: 3,308
• 2026: 3,288
• 2027: 3,268
• 2028: 3,249
• Five year change: decrease of 59 occupied beds required

Scenario two total older people's care home occupancy:

• 2023: 6,126
• 2024: 6,215
• 2025: 6,169
• 2026: 6,097
• 2027: 6,032
• 2028: 5,972
• Five year change: decrease of 154 occupied beds required

Shortages of older people's care home beds

Geographical areas in Norfolk each have a sufficiency rating for the provision of older people's enhanced or complex needs in residential care and nursing care. The ratings are:

• Low sufficiency
• Medium sufficiency
• Sufficient provision

The sufficiency ratings show the difficulty in making placements and the shortages in the number of available beds in the care homes for older people in each area. For example, a low sufficiency rating shows that there are bed shortages and that it is difficult for us to make older people's care home placements in that area.

The geographical areas with identified shortages of beds for each type of care home are:

Older peoples care sufficiency ratings

Older people's enhanced/complex needs residential care

Sufficiency ratings for the provision of older people's enhanced/complex needs residential care in areas of Norfolk:

• Gorleston: Medium sufficiency
• Great Yarmouth and Northern villages: Sufficient provision
• Fakenham, Holt and Sheringham: Medium sufficiency
• Cromer and North Walsham: Medium sufficiency
• Aylsham: Low sufficiency
• Acle and Wroxham: Medium sufficiency
• Norwich: Sufficient provision
• Breckland (Thetford and Watton): Sufficient provision
• Kett's Oak and Wymondham: Low sufficiency
• Mid Norfolk (Dereham): Sufficient provision
• Attleborough, Diss and Loddon: Sufficient provision
• West Norfolk coastal and Northwest Norfolk rural area: Medium sufficiency
• Fens and Brecks (villages around Downham): Medium sufficiency
• King's Lynn, Dersingham and Hunstanton: Sufficient provision
• Swaffham and Downham: Sufficient provision

Older people's nursing care

Sufficiency ratings for the provision of older people's nursing care in areas of Norfolk:

• Gorleston: Low sufficiency
• Great Yarmouth and Northern villages: Low sufficiency
• Fakenham, Holt and Sheringham: Low sufficiency
• Cromer and North Walsham: Low sufficiency
• Aylsham: Low sufficiency
• Acle and Wroxham: Low sufficiency
• Norwich: Sufficient provision
• Breckland (Thetford and Watton): Medium sufficiency
• Kett's Oak and Wymondham: Low sufficiency
• Mid Norfolk (Dereham): Medium sufficiency
• Attleborough, Diss and Loddon: Low sufficiency
• West Norfolk coastal and Northwest Norfolk rural area: Medium sufficiency
• Fens and Brecks (villages around Downham): Low sufficiency
• King's Lynn, Dersingham and Hunstanton: Sufficient provision
• Swaffham and Downham: Medium sufficiency

Residential care homes

The supply and demand for residential care homes, especially those in geographical areas with shortages:

• Demand plus council placement practices mean that there will continue to be a reduction in the number of new placements for people with standard needs and an increase in those with enhanced or more complex needs. These people will require larger rooms, more equipment (or space to accommodate), and a higher level of skilled staffing to support them.
• For care homes in the shortage areas, if they have vacancies that they cannot fill or that arise, and where they are able, changing these beds to support an older person with more complex needs would result in a much better chance of the council making a placement there. This may require adaptations and staffing changes to enable it.
• Care homes are encouraged to register with CQC for dementia and make the necessary staffing decisions to facilitate accepting more residents with dementia, especially those with enhanced level needs

Nursing homes

The supply and demand in nursing homes, especially those in geographical areas with shortages:

• Generally, larger rooms, more equipment (or space to accommodate), and a higher level of skilled staffing to support people with more complex needs would result in a much better chance of the council making a placement
• The complex situation for nursing homes around decreasing occupancies and difficulties finding appropriate placements has not yet been fully explained. Based on demographic data, we anticipate that we will require additional older people's nursing placements in the future. However, at the same time, we have experienced low numbers of nursing placements over the past few years. This is a complex situation that needs to be understood and addressed as part of our joint work with the integrated care board (ICB).

Our commissioning intentions

Residential and nursing

Our commissioning intentions for residential and nursing care are:

• More enhanced, dementia and complex physical needs beds increasing in line with projected demand
• Reduction in the low care need offer ('true' standard residential). There is a need for alternative or prevention provision, especially independent living or home care.
• Accessible provision accepting NCC fees or charging a 'reasonable fee' in all areas of Norfolk, within a 'reasonable' distance of where people live
• A high (and increasing) percentage of temporary care arrangements result in people returning to their usual place of residence
• Good value and high quality, not cheaper and lower quality
• Modern buildings or improved older buildings offering sufficient room size and home layout. This could ultimately mean fewer but more modern and larger homes.
• Care homes rated at least 'good' by the most recent CQC or PAMMS inspection or on a 'provider quality journey' with our integrated quality service (IQS)
• Care homes can cater to increased levels and complexity of need, both physical and mental
• Skilled workforce paid a competitive wage, on a secure contract, supported to live in area where they work with less reliance on agency staff
• Residents will be supported (on average) for a relatively short period of time

Nursing

Our commissioning intentions for nursing care are:

• Continuing to work with the ICB to understand current and future nursing demand and to explore opportunities to align the commissioning and contracting of funded nursing care and continuing health care. This includes reviewing our current care definitions for residential and nursing care as well as consideration of a joint block contract for nursing care.
• Fewer 'specialist' homes with nurses and skilled staff concentrated in fewer homes could be an option
• Greater percentage of beds used or available for nursing rather than residential, ensuring that funded nursing care covers costs associated with operating a nursing home (for example, a greater percentage of the residents will receive this payment)

What was achieved during 2022-2023

• We have drafted a five-year strategy for accommodation commissioning for people aged 65 years and above. We will be engaging with NHS partners, care providers, and other stakeholders to finalise this programme over the next 12 months.
• We worked with providers to deliver the fair cost of care element of the social care reform. We also worked with providers to inform the development of the market sustainability plan, another key element of the social care reform. You can read the reports on the approach and outputs in the market sustainability and fair cost of care webpage.
• We supported the ICB to introduce a new health-led intermediate care bed offer (pathway 2) from 1 July 2022. This replaced the short-term beds we previously commissioned during the Covid-19 pandemic.
• We are working with the ICB to undertake a joint review of the commissioning and contracting of continuing health care and funded nursing care to identify opportunities for improvements. Working with care providers to implement the recommendations from this review is a key priority moving forward.
• We have continued to develop our approach to identifying and supporting care providers who are at risk of failure

Key messages to providers

Our key messages to providers are that:

• We want to work with registered social landlords and care providers to develop 1,135 units of independent living by 2028, increasing provision for people with lower care needs and helping them to remain independent for longer. The expected impact of this has been included within the residential demand modelling in the 'supply and demand' section.
• We want to develop and enhance specialist provision for people with dementia, including working age dementia
• Although we have an adequate supply of residential capacity, we have significant gaps in affordable provision for people with complex needs. We want to work with providers to develop the model and the affordable fee rates that would encourage providers into this sector.
• We are working to identify ways to deliver a lower carbon sector