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In the United Kingdom, as in many other developed countries, there is an established market in the provision of long-term care-homes for older people. Implicit in the market mechanism is the assumption that homes will close, but it was not until 1999-2000 that closures of care-homes received widespread public attention. This paper draws on a multi-method study that investigated home closures in England from several perspectives. The rate of home closures rose substantially between 1998 and 2000 and, although sources give different estimates, it subsequently appears to have remained at about five per cent each year. The net result has been a reduction in capacity, particularly in smaller homes. While their emphases differed, both regulators and providers broadly pointed to the same factors behind the closures: the local authorities, the majority purchasers of care-home places, were under pressure to keep fees down, and national policies that raised costs were coming into force or were anticipated, notably the National Minimum Wage and the National Care Standards. Other factors, such as problems in recruiting suitable staff, particularly those with nursing qualifications, also played a role. The government's response, driven primarily by concerns about the effect on delayed discharges from acute hospital beds, was to retreat on the Standards and to increase funding to local authorities. While this has been a helpful step, more needs to be done to prevent good homes closing and to provide incentives that will retain and promote diverse provision. KEY WORDS--care-homes for older people, closures, long-term care market, regulation.