The UK’s care visa crunch represents another blow to a squeezed sector

The UK government’s new visa policy announcement, scrapping visas for care workers, has sent ripples of concern through England's care sector. For operators and investors in elderly care and supported living facilities already navigating challenging conditions, such as those introduced by the recent increase in employer National Insurance contributions, this shift represents a significant operational hurdle.

We dive into this announcement in more detail in this week’s HBI lead story.

Health and Care Worker visa applications had already plummeted from 359,300 in 2023-24 to just 80,700 in 2024-25, with recruitment throughout the sector facing substantial pressure. The impact on care homes will be particularly severe, as there has been heavy reliance on overseas staff as a lifeline in a sector that has struggled to attract local hires. 

Care in the UK is a sector that traditionally does not experience high margins or significant funding, and controlling labour costs is key to the sustainability of many providers, whether for-profit or non-profit. Local government is often a key funding source, and local government budgets have been tight for many years, and do not look like loosening. 

Martin Green, Chief Executive of Care England, called the situation "a crushing blow" to a sector already on its knees — an assessment that is likely to resonate with many operators and investors.

For care home residents, meanwhile, this staffing squeeze may result in reduced attention and care, potentially putting elderly and disabled individuals who require daily assistance at risk.

While the government emphasises that reliance on overseas workers needs to be reduced, aiming to attract more citizens through higher wages, the practicality of this approach within current funding constraints remains questionable.

For private providers and their investors, this presents both challenge and opportunity. With fewer overseas recruits available, all providers are competing for the same, smaller talent pool. Employers who can provide flexible scheduling, competitive compensation and clear career advancement will gain advantage in attracting qualified workers.

Additionally, building a strong reputation as an employer of choice, implementing digital engagement strategies and developing internal mobility programmes can help operators differentiate themselves in an increasingly competitive recruitment landscape.

For investment firms with exposure to the care sector, these developments necessitate a reassessment of portfolio risk. Assets with high dependency on international staffing may require additional support to implement workforce stabilisation measures. Conversely, organisations that have previously invested in recruitment infrastructure and retention capabilities may present attractive acquisition opportunities.

The sector may experience accelerated consolidation as smaller, independently operated facilities struggle to adapt. For strategic investors, this could present selective acquisition opportunities, particularly for operators with sufficient scale to implement more efficient staffing models.

This situation demands investment in innovative approaches and a reassessment of how care workers are supported and rewarded to protect service quality for individuals who depend on care facilities. The providers who take immediate action to address these workforce challenges while maintaining their focus on quality care will shape the industry's future and likely emerge as stronger businesses — but even these providers are likely to experience some short-term pain due to the recent changes.

As the operating environment continues to shift, those operators and investors who can swiftly adjust their workforce strategies while prioritising care quality will be best positioned to preserve and enhance value in a sector undergoing significant structural change.