This article was published on Birmingham Against The Cuts on September 8, 2025
“In 2023, there were more than 12,000 people receiving some form of adult social care commissioned by Birmingham City Council.” This figure comes from what seems to be the most recent BCC report – Adult Social Care Market Position Statement 2023 (39 pages) by Professor Graeme Betts CBE, Strategic Director for Adult Social Care. “This report focuses on how Adult Social Care services in Birmingham will work to support adults with disabilities and older people .” There are 2,449 Residential Home Care service users and 1,328 Nursing Home Care service users in Birmingham. (Link 1)
“Birmingham has a large and established market for residential and nursing homes for older adults. […]. Currently there are over 1,674 older adults placed in residential homes by Birmingham City Council, along with around 1,100 older adults in nursing home placements. […] Birmingham City Council also uses homes outside the city boundary, and likewise many beds within Birmingham are used by other local authorities, along with significant numbers of self funders. The compositional structure of the Birmingham Care Home market is dominated by small, single suppliers. 91 suppliers operate in the city; of these suppliers 71 (78.0%) run one home within the region, 18 (19.8%) run 2 to 4 homes and 2 (2.2%) run over 5 homes.” (p23)
“There are 277 care homes registered with the Care Quality Commission (CQC) within the city of Birmingham. These homes range from very large homes with both residential and nursing beds catering for older adults, to small specialist accommodation for adults with learning disabilities. In total, Birmingham commissions placements with more than 500 homes inside and outside the city.” (p18)
“There are 112 Residential Care Homes for people with Learning Disabilities in Birmingham. Many of these homes also offer services for adults with other and complex conditions, including mental and physical health needs. There are over 800 beds in homes specialising in caring for people with learning disabilities in Birmingham.
Birmingham City Council also uses care homes outside of the city boundary, however whilst the vision is to deliver care close a person’s local community, some specialisms can only be delivered further afield.” (p25)
“Large parts of adult social care market in England face collapse, thinktank warns”. “Sector will have extra £2.8bn cost burden from April due to tax and wage rises announced in budget, says Nuffield Trust” (Guardian 22 November 2024) (Link 2)
Almost all Birmingham’s Council-funded Care Homes are privately-owned and run for profit
Just 8 Care Homes, Adult Day Care Centres and Extra Care Housing are owned by Birmingham City Council. Birmingham City Council runs three council-owned care centres: The Ann Marie Howes Centre, The Kenrick Centre, and The Perry Tree Centre. These centres provide care for older people, and those with learning disabilities and dementia, acting as Centres of Excellence for dementia care.
The vast majority of Care Homes are privately-owned. Specific profit figures for care home companies in Birmingham are not publicly available, but profit margins for care homes in the UK generally fall between 10% and 25%, with smaller homes potentially showing higher margins and larger firms showing significant total profits that can total billions of pounds nationally.
According to the charity “We Own It. Public services for people not profit”, “In 1960, the private sector provided 10.5% of residential care, while the public sector provided 66% (and the voluntary sector 23%). Today private provision is at 83%, the voluntary sector at 13% and the public sector just 4%.”
The Centre for Health and the Public Interest (CHPI) says in its 2024 report that
“Investors are making a fortune from UK healthcare. Why is nobody holding private equity to account?
In the case of older people needing care towards the end of their life, companies backed by private equity funds have been generating significant returns for decades. Our research at the Centre for Health and the Public Interest shows that around £1.5bn is taken out of the care home sector each year in the form of different types of returns to shareholders and investors.”
“The UK care home sector generates significant revenue, with some reports indicating large profits are taken out by shareholders and investors.
Profit Margin Examples:
One example suggests an operating profit margin of 10% for a 50-bed care home.
Franchised home care businesses have shown net profit margins around 22% to 24%.
Some sources indicate that a quarter of homes make between 30% and 40% profit.” (Link 5)
National companies who own Care Homes in Birmingham:
- Care UK: A major national provider with homes like Metchley Manor.
- Bupa: Operates several care homes in Birmingham, including Amberley Court.
- Barchester Healthcare: Another major national provider with a significant presence.
- Sanctuary Care: Manages several residential homes in Birmingham.
- Avery Healthcare: Operates facilities such as Albion Court.
To find the most extensive list, you can visit local directories such as those provided by Carehome.co.uk or Autumna.
How much does it cost?
There are 248 Care Homes in the Birmingham Area with an average starting price of £1,082 per week. They include Sutton Park Grange, a luxury care home by Cinnamon Care Collection in Sutton Coldfield. It provides 64 Rooms from £1,695 a week. This company owns 23 Care Homes nationally. The Director of Cinnamon Care Collection is Carole Hunt. She is the director of 31 Care Home companies.
“Nearly a third of care home beds are owned by the 26 largest companies, whose investors see them as a source of income and profit. Three of the biggest groups – Four Seasons, Care UK and HC-One – are or have been owned by private equity firms. They have 39,000 beds between them. The BBC’s Panorama ‘Crisis in Care: Follow the Money‘ found that 20% of the fees paid to HC-One go towards paying for the company’s profit and paying off its debt. Meanwhile, residents of its care homes receive terrible care and their families suffer.
These companies disguise their profits using incredibly complicated corporate. 18 of the 26 largest for profit providers have split their operating company which runs homes from the property company which owns them – this limits their responsibility if they cause harm and makes it easier to avoid tax. 6 of them have owners based in a tax haven.”
Key Facts
- 64% of the public want care homes to be run in public ownership.
- Quality in care homes in England is poor, with one in every five homes rated ‘inadequate’ or ‘needing improvement’. Larger care homes are associated with a worse quality of care.
- 10% of funding leaks outof the system through hidden profit extraction (an estimated £1.5 billion out of a total of £15 billion funding). This money leaks out through complicated corporate structures into dividend payments, rent, interest, management and directors fees.
- The 26 big providers who account for 30% of all beds leak out £13.35 of every £100.
- At least 40,000 people a year have to sell their homes to pay for nursing care. Around half of social care funding is provided by local authorities and the NHS, around half from individuals and their families.
- From 2010 to 2017/18, government funding of local authorities has fallen by 49% in real terms. Councils are now spending 38% of their total budget on social care.
- Private care workers are under pressure and under valued. Skills for Care says that the vacancy rate is consistently over 6% and turnover at 29%. 82% of the workforce are female and 21% are Black, Asian or minority ethnicity.
- By 2040, nearly one in seven people will be over 75. What kind of future do we want for care work? (Link 6)
Where the profits go
“Plugging the leaks in the UK care home industry – Strategies for resolving the financial crisis in the residential and nursing home sector” by Vivek Kotecha, published 7 November 2019. (Link 8):
“This report identifies where each pound that goes into the care home industry ends up by using a forensic study of the accounts of over 830 adult care home companies, including the 26 largest providers. The companies examined have a combined income of £10.4bn, representing 68% of the total estimated market value for independent providers in 2017.”
The report’s key findings include:
- There are significant levels of leakage across the care home sector and the type of care home business impacts the amount leaking out.
- For 784 small and medium-sized care home companies £7 of every £100 received goes to profit before tax, rent payments, directors’ remuneration, and net interest paid out. For the 18 largest for-profit providers the level of leakage is more than double at £15 of every £100 received.
- There are significant differences in the level of leakage amongst the largest 26 care home providers.
- For the 8 largest not-for-profit providers the level of leakage is £8.60 out of every £100 received, and amounts to £93m a year
- For the 5 largest for-profit providers (Private Equity owned or backed) the level of leakage is £9.06 out of every £100 received, and amounts to £159m a year.
- For the 13 largest for-profit providers (Non-Private Equity) the level of leakage is £19.49 out of every £100 received, and amounts to £401m a year.
- Some of the largest 26 providers use complex company structures to maximise leakage and hide profit extraction.
- 6 have an offshore owner in a tax haven; 18 split up their operating and property companies; 9 use sale and leaseback; and 12 purchase services or supplies from a related company. The significance of each of these is discussed in the report.
- The largest 26 providers pay out significant amounts in rent payments each year, often to related companies which are based outside of the UK’s tax jurisdiction.
- 7 of the 18 largest for-profit providers spend between 15-32% of their income on rent payments, totalling £264m a year.
- The 8 largest not-for-profit providers spend £2.34 out of every £100 of their income on rent, compared to the £11.07 out of every £100 received for the 18 largest for-profit providers.
- Much of the debt loaded onto the care homes by the largest for-profit providers is owed to related companies that are often based offshore and at high rates of interest i.e. a form of hidden profit extraction which also avoids tax.
- Across the 26 largest care home providers a total of £261 million of the money they receive to provide care goes towards repaying debt. Out of this £117 million (45%) are payments to related companies which is a known way of avoiding tax and hiding profits.
- Leakage is also occurring through management fees and related company transactions.
“Based on these findings we make the following recommendations:
Recommendation 1: A Care Home Transparency Act – care home providers should be mandated to disclose where their income goes.
Recommendation 2: A new form of care regulation is required to prevent care home companies with unsatisfactory financial models from providing care in the UK.
Recommendation 3: Capital should be made available by the government for the provision of new care homes.”
Why care must work for people not profit
We need to reverse privatisation – reduce the role of the private sector and increase the role of local authorities and the not for profit sector. Care homes belong in public ownership. The Centre for Health and the Public Interest recommends that the government use capital to build new care homes – these could built by local authorities and the NHS. Councils can employ care workers directly and make sure they are well trained with decent terms and conditions, building on the work UNISON has done with the Ethical Care Charter.
Labour Party policy
The Labour Party wants to bring in a National Care Service in England and is holding a review to see how this could be done. Shadow Health Secretary Wes Streeting said in July 2022 “I would love to see a national care service delivered exactly on the same terms as the NHS, publicly owned, publicly funded, free at the point of use, but we’ve got to be honest about the scale of the challenge. So our starting point is to make sure we deliver national standards for care users and better pay and conditions for staff who work in social care.”
Since then the Labour Government* has said nothing about bringing in a National Care Service.
It’s time they stood up against care for private profit and campaigned for a National Care Service.
*this article was written before Burnham became prime minister. He called a summit meeting today with other poltiical leaders to discuss doing something about Social Care, This article provides a brilliant resource for developing a radical proposal on this issue.
8 September 2025
LINKS
Link 1: https://www.birmingham.gov.uk/downloads/file/26634/market_position_statement_-_may_2023
Link 3: https://www.carehome.co.uk/care_search_results.cfm/searchgroup/36152501BIRA
Link 4: https://weownit.org.uk/public-ownership/care-work
Link7: https://www.birmingham.gov.uk/downloads/file/30167/care_fees_increase_summary for_2025_to_2026
Link 8: https://www.chpi.org.uk/reports/plugging-the-leaks-in-the-uk-care-home-industry
See also:
Britain’s Care Crisis: Why Claps Don’t Pay Bills and Money’s Not Enough by Emma Dowling In Hard Times Magazine107: 38-52. 2023. See also Rethinking Care: From Privatisation to Solidarity by Emma Dowling, Green European Journal, 28 September 2023 in https://www.greeneuropeanjournal.eu/care-and-capitalism/ and her 2021 book The Care Crisis – https://hardtimesmagazinecom.wordpress.com/2023/10/13/vol-107-of-hard-times-out-now/
“At the heart of Britain’s current care crisis lie the evident failures of privatisation. When Britain’s care homes reward shareholders over staff, we need a new system” by Amy Horton 2023.
How private finance is crippling health and social care by David Rowland, 2023.