If 2025 was the year the cracks widened, 2026 is the year the system starts to shift.

Demand for care is structurally ahead of supply, and that gap is no longer a blip – it’s a defining feature of the landscape.

Ageing demographics, rising acuity, and complex needs are driving occupancy in care homes and specialist services, while planning hurdles, capex costs, and workforce shortages keep new capacity crawling behind.

Across much of the UK, demand is outstripping supply, and the pressure is palpable.

Policy signals are clear: care is moving out of hospitals and into neighbourhoods. Integrated Care Systems are pushing for “care closer to home,” with step-down facilities, supported living, and complex domiciliary packages becoming the norm.

Hospitals are incentivised to avoid admissions and cut delayed discharges, while primary care – GPs, dentists, pharmacies – become the front door to diagnostics, prescribing, and long-term condition management.

It’s a profound shift, but one happening under strain: the infrastructure is patchy, and workforce fragility threatens delivery.

“The direction of travel is clear: care will increasingly be delivered in homes and communities rather than hospitals,” says Barrie Davison, our Head of Public Sector.

“The challenge is making sure the system has the capacity, technology, and workforce to deliver that vision.”

Small, single-home operators and niche charities are finding it harder to keep pace with regulatory expectations, ESG demands, and digital transformation.

Consolidation is accelerating – not just for efficiency, but to unlock investment in quality, estates, and technology.

Care real estate remains a magnet for investors, offering index-linked income and demographic certainty, but the cost of compliance and decarbonisation is reshaping the economics of older stock.

“We’re seeing investors and operators alike recognise that scale matters – not for its own sake, but because it enables investment in quality, sustainability, and digital capability,” Barrie notes.

“Those who can demonstrate strong governance and ESG credentials will be best placed to attract capital.”

Every conversation circles back to people. Recruitment and retention remain the sector’s biggest risk, amplified by wage uplifts and uncertainty over migration routes.

Overseas recruitment has become a lifeline for many providers; any policy shift here is a gamechanger. 

Operators that invested early in culture, pay progression, and career pathways are seeing lower churn and better regulatory outcomes - a signal that workforce strategy is now a core business lever, not a side project.

“Workforce resilience is the single biggest determinant of success,” says Barrie. “Providers that invest in skills, wellbeing, and leadership development will not only improve retention -they’ll improve quality and reputation.”

Technology is no longer a “nice to have”.

”Remote monitoring, falls detection, e-MAR, and rostering optimisation are moving from pilots to scaled deployment, especially in larger groups.

AI-driven triage and predictive analytics could reshape staffing models and risk profiles, but adoption is uneven. The winners will be those who treat digital as infrastructure, not an experiment—embedding it into care delivery and compliance, not bolting it on.

“Digital transformation isn’t about gadgets; it’s about building smarter, safer, and more sustainable care models,” Barrie emphasises. “The providers who move beyond pilots and embed digital into everyday practice will set the benchmark for the sector.”

Fee uplifts lag cost inflation. Capex demands for fire safety, accessibility, and sustainability are mounting.  Regulatory scrutiny is tightening, with financial resilience now part of the quality conversation.

And primary care access remains politically charged, with independent contractors under pressure to do more with finite resources.

“2026 will be a defining year for health and social care,” Barrie says. “Providers that embrace integrated models, invest in workforce capability, and scale digital solutions will not only survive but lead the way in shaping a system that is fit for the future.”

The sector is under strain, but it’s also on the move. Care is becoming more local, more digital, and more data-driven. The question for operators isn’t whether change is coming - it’s how fast they can adapt, and whether they can turn pressure into progress.

Dive into the full set of 2026 sector insights and discover our practical guidance to get your business Future Fit for 2026: Sector Trends