The elderly care market is going through a period of profound change, with significant reform likely under the new coalition government. As the population ages and demand for care rises, the funding environment for elderly social care in England is becoming increasingly challenging.
A two-tier care system is appearing with those who are provided for by local authorities and those who are self funded or supported by family, as public spending is cut and the personalisation takes shape. There is also ambiguity and confusion about the future of the elderly social care market.
PwC’s survey of over 100 domiciliary and care home provider executives shows that there is a strong desire from providers to have more central and coordinated support from central government, in order to establish a framework within which care providers can plan for their business. The survey also uncovers that the key challenges for providers are to maintain the quality of services against a backdrop of rising costs and downward pressure on fees and consequently providers feel that user expectations of care may be unrealistic.
Additionally, providers are optimistic that the market will grow with an ageing population and that they will continue to be successful, but expect greater pressure on fees and further consolidation of the market in the medium term.
Overall, both domiciliary and care home providers spoke with one voice about the market, but it was clear that care home providers are more concerned about the future than domiciliary providers and that small providers are not as confident about their ability to cope with future market changes.
These findings highlight the need for government to set clear policy and direction now to address the acute funding crisis facing the sector that could result in reduced choice and potentially lower quality of services for those who depend on social care.
The challenge for providers will be to look beyond their current plans and be more flexible in their business strategy to remain competitive. There will be clear opportunities for providers who grasp changes to their market and adapt to them
As demand grows with the ageing population, a clear pressure for providers will be to continue to deliver quality care with ever increasing costs and lower fees. Providers recognise that they will need to move away from their traditional way of working and tailor their services to meet need, but service users may also need to re-set their expectations on what care will be provided.
The future of the elderly social care market depends on the right decisions being made now. Providers need to be engaged in discussions on the market’s future alongside policy makers, commissioners and service users.
Amanda Kelly is lead social care partner at PricewaterhouseCoopers LLP
