Key challenges for adult social care in Hampshire

Hampshire has one of the largest adult social care markets in England.

That scale can create the impression that almost any care service should be able to find enough demand.

The county's current evidence says otherwise.

Hampshire's June 2025 Market Position Statements show several different market conditions operating at the same time.

Standard homecare is crowded.

Learning-disability residential care is materially oversupplied.

Mainstream residential and nursing placement volumes are not expected to increase substantially in the immediate future.

At the same time, Extra Care demand is rising, dementia prevalence is increasing, supported accommodation remains a strategic priority and some specialist services are difficult to source.

The workforce is another major constraint.

Hampshire's adult social care turnover rate is significantly higher than both the regional and national averages.

For providers, the central challenge is therefore not whether Hampshire has enough care demand.

It is whether the proposed service solves the right problem in the right part of the county.

1. Hampshire is not one care market

Hampshire County Council covers a population of more than 1.45 million people.

Hampshire's eleven districts differ substantially in demography, housing, transport, deprivation, recruitment conditions and density of existing providers. A service that is commercially viable in Gosport might struggle in rural Winchester, making local market analysis indispensable.

A service that is viable in Gosport may not work in rural Winchester.

A provider struggling to win packages in one homecare zone may still find unmet need elsewhere.

County-wide averages can therefore be misleading.

2. Standard homecare has become overcrowded

Hampshire's Independent Living at Home MPS reports that providers themselves describe the market as overcrowded.

Providers have reported difficulty obtaining enough work from Hampshire County Council, the NHS and private customers to maintain sustainable operations. That is an important warning: a large commissioning budget does not necessarily imply an opening for another undifferentiated agency.

This is unusually clear negative market evidence.

A new provider should not assume that the county's size guarantees packages.

3. Competition has pushed prices down

Providers also told Hampshire that increased competition had reduced prices.

At the same time, costs were rising.

Providers describe pressure on income while wages, employer contributions, insurance and training costs rise. Higher operating expenses combined with reduced rates can create weak margins even where a service is busy.

A large care market can therefore still be financially fragile.

4. Homecare demand will grow, but timing matters

Hampshire expects the number of older adults using care at home to increase from around 3,500 to 4,000–5,000 over the next five years.

That is meaningful growth.

But future demand does not remove current competition.

A start-up needs enough volume now, not only a favourable 2030 forecast.

5. Rural and harder-to-reach areas remain more difficult

The county says some geographically remote communities still have inadequate provision.

This reflects Hampshire's varied geography.

Dispersed communities create longer journeys, additional mileage, lower density of commissioned packages and more complex scheduling. A provider may therefore find genuine gaps in particular zones despite oversupply elsewhere in the county.

A provider can therefore face oversupply at county level and still find genuine local need in a specific zone.

6. Procurement access is a major market-entry barrier

Community Care and Support Hampshire covers older residents and eligible working-age adults, including people with physical disabilities, learning disabilities or mental-health needs. The formal purchasing route matters: CQC registration alone does not provide access to council-funded packages.

Providers need formal contract access.

CQC registration alone does not create council referrals.

7. Reablement reduces long-term package intensity

Hampshire wants more people to receive reablement before long-term homecare.

It also expects commissioned providers to continue working in an enabling way after reablement ends.

That means providers can be rewarded for helping people need less support.

This is positive for outcomes.

It can challenge business models built around preserving high care-hour volumes.

8. Technology may substitute for some physical care

Hampshire has used care technology at large scale.

Hampshire wants technology to support independence, avoid unnecessary visits, manage risk and reduce duplicated staff support where appropriate. For providers, that may change the relationship between population need and the number of paid care hours actually commissioned.

Providers need to adapt.

Future demand may not always translate into the same number of face-to-face hours.

9. Extra Care demand is much clearer

Hampshire's 2024 demand study identified a need for around 64% more affordable Extra Care homes by 2043.

64%

More homes needed by 2043

and

1,500

Apartments in the council ambition

The council's ambition is to reach around 1,500 units.

Current reporting shows 974 apartments across 21 schemes.

This is a substantial development gap.

But it is also a high-barrier market.

10. Extra Care requires housing and care to work together

Extra Care is not simply a domiciliary-care contract.

A viable development requires land, planning permission, capital, housing management, a landlord structure, care commissioning and sustained occupancy. Providers without those capabilities may need property and housing partners rather than pursuing a scheme independently.

Providers that lack development capability may need partnerships.

11. Priority Extra Care areas are not evenly distributed

The council identifies especially strong need in Fareham, Havant, East Hampshire and Basingstoke and Deane. Site selection and the availability of appropriate tenure may therefore be much more important than an undifferentiated county-wide growth forecast.

1. Fareham
2. Havant
3. East Hampshire
4. Basingstoke and Deane

This means the strongest development case may be district-specific.

A county-wide demand forecast should not be used to justify a scheme in an arbitrary location.

12. Extra Care residents are staying longer and becoming more complex

Hampshire says residents increasingly remain in schemes as their needs rise.

Schemes increasingly need to accommodate higher staffing requirements, dementia, frailty, overnight support and stronger links to clinical services. Those requirements can increase operating costs and make a development designed only for low-level support unsuitable over time.

This increases operating cost.

A housing scheme designed only for low-level support may not fit future demand.

13. Mainstream residential and nursing demand is relatively stable near term

Hampshire's current residential and nursing MPS does not forecast a near-term increase in the number of placements the council purchases.

It already buys approximately 1,600 to 1,900 new placements each year.

1,600

Lower end of the range

to

1,900

Upper end of the range

The market is large.

But the current signal is stability rather than rapid expansion.

14. Long-term care-home demand will still rise

The county's population is ageing.

Long-term residential and nursing demand is therefore expected to increase.

This creates a timing issue.

A new operator should distinguish current occupancy and vacancy conditions from five-year forecasts and longer-term demographic demand. A positive 2040 projection does not automatically justify opening substantial new capacity immediately.

A long-term positive trend does not automatically justify immediate supply.

15. Dementia is the most important care-home growth pressure

Hampshire estimates dementia prevalence among older people could increase by around 45% by 2040.

• 45%Increase

The council explicitly wants providers to develop services that can support this growth.

This creates a clearer opportunity than general bed expansion.

16. Dementia demand is increasingly complex

Dementia frequently occurs alongside physical disability, frailty, sensory impairment or other long-term conditions. As a result, the service must plan for more than memory-related needs alone.

Providers therefore need more than a dementia registration category.

Appropriate provision may require specialist training, adapted accommodation, behavioural expertise and clinical partnerships. These practical capabilities matter more than describing a home as dementia-focused.

17. Care-home occupancy is uneven

Hampshire says occupancy remains a challenge for some providers.

The self-funder market has not fully returned to pre-2020 levels.

This creates commercial risk.

A county can have substantial long-term need and still contain homes with empty beds.

18. The self-funder market is important but not guaranteed

Hampshire includes many affluent areas.

Private-pay demand is significant.

But the current MPS warns that self-funded occupancy has not fully recovered.

Before investing in a premium development, providers should examine local wealth, demonstrated demand, competitors' prices and realistic occupancy. County-level affluence cannot establish that a particular scheme will attract sufficient private-paying residents.

Affluence at county level is not enough.

19. Learning-disability residential care is clearly oversupplied

This is one of the strongest negative market signals in Hampshire.

The wider market contains around 1,230 learning-disability residential and nursing beds.

The council funds 613 placements.

It estimates that it commissions around 37% of total capacity.

1. Beds in the wider market

   1,230

2. Placements funded by Hampshire

   613

Hampshire describes this as significant and ongoing oversupply.

20. New generic learning-disability care homes therefore have a weak case

The council is not planning significant growth in learning-disability residential care.

Its strategic preference is supported accommodation.

A provider opening another standard residential service would be working against the market direction unless it solves a very specific specialist problem.

21. Emergency and crisis learning-disability accommodation remains difficult

Despite residential oversupply, Hampshire says emergency and crisis placements for people with complex needs can still be difficult to source.

This illustrates a recurring market principle.

Too much generic capacity can coexist with too little specialist capacity.

22. Supported living is the preferred learning-disability model

Hampshire commissions supported living for around 1,100 people at 305 locations.

The council wants to increase this capacity.

It is also continuing to move people away from residential care where supported accommodation can meet needs safely.

This creates a strong strategic direction.

23. Property is a central supported-living constraint

Supported accommodation depends on having the right housing.

The chosen home or scheme must suit the individual client group, staffing and risk profile, location and relationships with the surrounding community. Property availability alone is not evidence that a supported-living service can be commissioned or delivered safely.

A house that is easy to acquire is not necessarily a suitable care setting.

24. Out-of-county placements remain a target for reduction

Hampshire operates a "Hampshire first" approach.

It wants people who are placed outside the county and wish to return to be supported locally where possible.

That creates an opportunity.

But it needs cohort-level evidence.

Not every out-of-county placement is realistically addressable.

25. Ageing people with learning disabilities create a new challenge

More people with learning disabilities now also require support for dementia, frailty and complex physical-health conditions. Hampshire is seeking provision that combines learning-disability expertise with older-person care rather than forcing individuals into unsuitable generic settings.

The council wants providers that can bridge traditional older-person and learning-disability models.

26. Physical-disability specialist residential capacity is limited

Hampshire funds 126 residential and 92 nursing placements for people with physical disabilities.

126

Residential

92

Nursing

The council says there are relatively few specialist physical-disability homes.

Some younger adults are therefore supported in services primarily designed for older people.

This is a specific service-design problem.

27. Supported accommodation for physical disability may need to grow

Hampshire currently commissions supported accommodation for only around 31 people with physical disabilities.

The council is assessing whether more capacity is needed.

Providers interested in this area need to monitor procurement through HADSOM.

28. Physical-disability day-service growth is not a priority

The council says current day-service provision for physical disability is broadly sufficient.

This is useful negative evidence.

A provider should not treat every disability service as a growth market.

29. Mental-health need is becoming more complex

Projected working-age mental-health prevalence is broadly stable or slightly declining.

But Hampshire says individual needs are becoming more complex.

Individuals may present with several co-occurring conditions, unstable social circumstances, physical-health requirements and age-related needs. The complexity of each support package can therefore rise even if the total number of people requiring provision stays level.

This changes the service model even if the total number of people does not increase.

30. Mental-health residential care has an ageing cohort

The council funds approximately 208 residential and 36 nursing mental-health placements. With an average residential client age of around 55, future support may increasingly overlap with frailty and long-term physical-health needs.

208

Residential mental-health placements

36

Nursing placements

The average age in residential mental-health care is around 55.

A substantial number are aged 55 or over.

The council therefore needs providers that can support mental-health needs alongside frailty.

31. Mental-health supported accommodation is a strategic priority

Hampshire commissions 153 short-term supported-accommodation beds and around 215 long-term packages. It seeks to support greater independence where appropriate, making accommodation and recovery pathways more relevant than generic residential growth.

153

Short-term beds

and

215

Long-term packages

The direction is toward greater independence.

That gives supported accommodation a stronger strategic signal than generic residential expansion.

32. Mental-health homecare is still fragmented

Around 45% of mental-health domiciliary care was being spot purchased in the 2025 MPS.

• 45%Spot purchased

The council wants to move this onto formal frameworks.

That makes procurement access critical.

A provider relying on ad hoc spot work may find the market narrowing.

33. Workforce turnover is unusually high

The estimated annual turnover rate of 31.9% exceeds both the South East and England averages. Replacing staff at that rate can undermine service continuity and makes the retention strategy central to a credible operating model.

This is arguably Hampshire's largest cross-market operational risk.

34. Turnover can be more damaging than vacancies

The county's 7.4% vacancy rate is close to regional norms.

• 7.4%Vacancy
• 31.9%Turnover

But high turnover creates continuous recruitment pressure.

Repeated departures increase recruitment and induction costs, supervision demands, management workload and agency reliance. For people with complex support needs, frequent staff changes may also disrupt care plans and trusted relationships.

For people with complex needs, frequent staff changes can also reduce quality.

35. Specialist services need stable staff most

Dementia, autism, supported living, mental-health care and complex physical-disability services particularly depend on experienced, consistent staff. The ability to retain such workers can be as important as finding a new placement or contract.

These are precisely the services where continuity matters most.

A provider that cannot retain staff may struggle even where demand is strong.

36. Overseas recruitment is less certain

The market has relied substantially on international recruitment.

Hampshire's workforce strategy places emphasis on retaining staff, recruiting locally, development and progression, and ethical employment. These are important foundations for workforce resilience as national overseas-recruitment rules evolve.

37. Market sustainability is under financial pressure

Providers identify pressure from commissioning fees, inflation, wages, National Insurance contributions and declining profitability. The council's Market Sustainability Plan recognises these strains, but a new business must still test its own realistic cost base.

Hampshire's Market Sustainability Plan explicitly recognises these pressures.

A documented service need is only a viable opportunity if the achievable rate covers the cost of delivering it safely.

38. Geographic variation makes scaling difficult

Hampshire is large.

A service operating across several districts can encounter different labour markets, travel costs, referral volumes and private-pay conditions. Administrative scale economies may not outweigh the complexity of delivering care consistently across very different localities.

Scale can help administration.

It can also create operational complexity.

What do these challenges mean for a new provider?

Hampshire does have substantial opportunity.

The evidence favours targeted entry.

Stronger propositions

The stronger evidence points toward affordable Extra Care, specialist and complex homecare, dementia services, crisis or specialist learning-disability support, supported accommodation for people with learning disabilities or physical disabilities, and mental-health provision that can also meet ageing and frailty needs.

Weaker propositions

The weaker case is for generic domiciliary care in an overcrowded market, ordinary learning-disability residential beds, general physical-disability day services or a new care home justified solely by county-wide population ageing. The business case should be based on a precise client group, location and purchasing route.

If one of these pressures is close to the service you are considering, the Should I Start? Market Report can test your specific plan in Hampshire against the same local demand, supply and commissioning evidence rather than relying on the headline market picture alone.

Questions to answer before entering the Hampshire care market

A prospective provider should be able to answer:

1. Which district or commissioning zone is relevant?
2. Is current supply already crowded?
3. Is the gap generic or specialist?
4. Which client group is the service for?
5. Which procurement framework applies?
6. Is that framework open?
7. Who will pay?
8. Is property part of the service model?
9. What comparable capacity already exists?
10. Can the service reduce inappropriate residential or out-of-county care?
11. Is the workforce available?
12. Can the provider retain specialist staff?
13. Is the achievable fee commercially sustainable?
14. What evidence would cause the provider not to proceed?

If the local market case looks strong enough to proceed and you are moving towards CQC registration, you can get a proposal comparing specially selected and verified CQC registration specialists for the service you plan to register.