The average size of a care home is growing despite larger homes offering lower quality care, figures from the Care Quality Commission reveal.
The average size of a residential care home or nursing home increased from 23 beds in 2004 to 25 beds in 2010.
However, care homes with 10 beds or less are more likely to be rated as good or excellent than those with 40 beds or over.
In April 2010 15% of homes with 40 beds or more had a rating of one or zero stars, under the CQC's star quality ratings system while only 10% of small homes had the same.
The quality of all sizes of care homes has, however, improved since the star ratings were introduced in 2008.
In its report, Market profile, quality of provision and commissioning of adult social care services, the CQC acknowledged that smaller homes prove particularly advantageous for residents with dementia or learning disabilities. The report added: "This achievement is made stronger by the fact that smaller homes are unlikely
to have the resource of quality assurance managers to help improve services."
It also remarked that smaller care homes may not necessarily be more expensive than larger ones, which achieve economies of scale.
David Congdon, head of policy at Mencap, said: "There's a danger that as money gets tight that to keep costs down there maybe a move towards larger care homes."
He said that larger care homes were not able to offer care which was closer to living in the community, the goal for many people with learning disabilities.
A CQC spokesperson added: "We carry out analyses such as these to see trends such as these, and we'll tackle poor care wherever we find it, in larger or smaller residential homes."
Government policy for several years has been to encourage greater use of domiciliary care and other non-residential care services, the numbers of which have risen from 1,881 to 5,526 since 2004.
The report also showed variation between regions of the quality of care provided by council-commissioned services.
Service users in London were found to be the best off with 89% receiving a service rated excellent or good, while only 76% of service users in the West Midlands received services of this quality.
The CQC said that council commissioning practices were to blame for these variations, although it acknowledged that some people chose to stay in poor care services because it kept them close to their family.
The highest rated services were shared lives services, which place people in families rather than institutions with 95% of the schemes rated good or excellent in April this year.
Source: Community Care