Come home operators have warned they will need to cut staff as council funding is reduced.
Research by The National Care Forum found fees being paid by councils were ‘well below’ the amount needed to keep pace with cost inflation.
The forum said the overall picture was ‘bleak’ and there was a ‘remorseless pressure on margins’.
It added that it would be a ‘matter of survival for homes with high exposure to council funding’ until the end of the decade.
A forum spokesman said: ‘Care home operators with high exposure to council funding will have to mitigate the margin squeeze through efficiency savings, including staffing.
‘While larger groups including Four Seasons Health Care and Bupa Care Services have succeeded, to some extent, in doing this so far, the scope for continued savings in the future is limited.’