The Care Quality Commission says it is worried about the pace of care home closures.
According to the BBC, the CQC says over the past six years, the number of homes in England has fallen by nearly 1,500 to 16,600.
It also warns about the number of home care providers turning their back on council contracts with two-thirds of local authorities seeing contracts handed back or providers leave the market.
The CQC evidence was compiled from 2015 figures submitted by 39 of the biggest providers in the care market. They represent an estimated quarter of the market and take part in an anonymised monitoring regime run by the CQC.
It has been designed to guard against sudden market failures like the one seen five years ago with the collapse of Southern Cross, which left more than 30,000 older people at risk of being forced out of their care homes.
The CQC document raises concerns about the future for providers that rely heavily on local authority contracts. Providers have been warning that fees paid by councils have failed to keep up with the costs of care and the CQC document supports this, saying recent fee increases have not covered the cost of implementing the national living wage.
CQC chief inspector of adult social care, Andrea Sutcliffe said the biggest providers represented just a slice of the care market.
But she added: “It does highlight a concern that the long-term sustainability of high-quality care within this sector could be at risk. Given the impact this would have on people’s lives, it is important that we continue to monitor these trends closely.
“We know that the adult social care sector faces many financial pressures, which worryingly, could undermine the quality and safety of care that people receive and rely upon every day.”
More details about the state of the care market as well as the NHS will be set out in the CQC’s annual report, which will be published later this week.
Professor Martin Green, chief executive of Care England, said it was time for the government to take ‘urgent action’ and provide councils with more funding that would be ring-fenced for social care.
“We have been warning about these problems for some time. There is a lot of churn in the sector. Contracts changing hands as providers leave and services stopping. There is simply not enough money in the system.”
Caroline Abrahams, of Age UK, agreed government action was needed. “Few public services are as important as social care, and yet it is clearly in serious, progressive decline,” she added.