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Essex County Council - Provider Hub
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Market Context

ECC considers that only people with the most complex mental health needs should be placed into residential care. These placements should be within a high-quality market that focuses on enabling and re-enabling people.

People should stay in residential care for the shortest possible time being supported with skills to enable them to achieve independent living in their communities with care and support delivered where required.

ECC recognises that for a small number of people residential care is the most appropriate environment to meet their assessed care and support needs

Market Rating

Market Quality Market Supply ECC Demand
Low Low Stable/High
ECC Ambition Market Workforce Market Maturity
Manage Supply Low/Moderate Evolving

ECC rating of the market, assessed on the 31st March 2025.

Mental Health residential is the largest area of spend at approx. £8.5million representing under 50% of the MH Accommodation Spend whilst the Mental Health Nursing spend is approx. £1m.

In line with ECC’s commissioning intentions to only make placements into residential care for people with the most complex mental health and to increase the use of supported living, the trend for residential care has shown a reduction in the number of placements over several years.

The Mental Health Residential and Nursing market is made up of a small number of specialist providers delivering support in residential and nursing home settings looking after people with the most complex mental health.

Existing capacity is mainly concentrated in the north of Essex and our data indicates a possible gap in provision in the south and west quadrants with many people placed out of county in Southend and Thurrock.

Therefore, in line with ECC’s commissioning intentions, a full review of our MH Residential and Nursing provision countywide will be undertaking to transform our offer in partnership with the Mental Health Trust and ICB’s, aligning with the SET MH Strategy.  This will include a review of demand and need to define requirements and contribute to the development of the offer to be delivered within our entire MH Accommodation model and pathway ensuring the approach is people centred

  • In the last 12 months there have been no new residential homes.
  • A couple of providers have exited this market.
  • There are approx. 10 homes offering specialist MH residential services.
  • 30% of placements are made into non specialist homes with other cohorts
  • Services are commissioned on a spot contract basis under the same terms as AWD Residential services.
Essex Market   
No. Homes  19
No. Beds  187
% Homes CQC rated Good or Outstanding 58%
Total Occupied Beds including funded by ECC  171
Occupancy % 91%
Occupancy % for ECC Funded Adults 80%
Market Entrants since 1.April 2023 0
Market Exits since 1.April 2023 0

(Note: The market has been segmented based on the main specialism supported by the home)

Essex ASC Market (ECC Funded)  
Spend  £9 Million
No. Adults funded by ECC receiving care in a residential setting 221
Average Cost per week 1,239.77
% ECC funded placements in a residential setting CQC rated Good or Outstanding 71%
Average Length of Stay (Years) 3 years 4 months
Essex ASC Market - Sourcing  
Average Rate per week £1,239.77
Placements per month 6
% Admissions CQC rated Good or Outstanding 72%

The information shown in the table(s) above is correct as of 31st March 2025.

Information in the above table for sourcing is based on activity between 31st December 2024 and 31st March 2025.

Residential placements still make up most spend in Mental Health accommodation services and the vision is to continue to reduce reliance on these services. Where residential placements are needed, the intention is to rely on specialist high quality mental health services where it is appropriate, to avoid such a diversified and disparate provider base.

Potential impact of the pandemic on Mental Health demand and on complexity of need which needs to be understood.

Current market risks:

  • Supply of MH Residential provision to meet complex needs.
  • Maintaining staffing levels across the market and there is market competition from other industries.

Our current area of focus is:

  • A full tender exercise will be undertaken of MH Residential and Nursing provision countywide to transform ECC’s offer in partnership with the Mental Health Trust and ICB’s, aligning with SET MH Strategy.
  • A category plan is being prepared and created for MH residential services to define a future commercial and procurement approach.
  • Understanding the cost base in the market and develop approach to rates and uplifts.
  • Understand sustainability of providers and how we ensure that the right quantity and quality of specialist suppliers is maintained.
  • Development of more specialist provision for the most complex cases to rationalize placements and improve quality of provision
  • Procurement and placement approach to be defined as this is currently a spot market
  • Identifying deregistration opportunities and move on potential for some adults placed who could live in more independent settings
Last updated: 01/04/2025
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