Alternative facilities should be commissioned for the majority of people with learning disabilities or autism who live in larger inpatient hospitals, the care services minister has said.

The Department of Health and the Care Quality Commission are also planning to review whether tougher regulatory or criminal sanctions should be brought in for care providers, a DH report into the abuse of patients at the NHS funded, privately run Winterbourne View hospital said on Monday.

As revealed by last week, the DH, Local Government Association and NHS Commissioning Board have agreed the care of everyone in inpatient care for a learning disability or autism will be reviewed by June. Then a personal care plan will be drawn up for each patient.

Commissioners are then expected to enact these plans as soon as possible, so that everyone will receive personalised care and support in appropriate community settings no later than 1 June 2014.

Care services minister Norman Lamb said 3,000 people with learning disabilities in full time hospital care should not be there. He added: “We think the large hospitals are inappropriate settings for people with learning disabilities.”

Larger facilities, such as the 48-bed Winterbourne View, should be “throttled”. This will be achieved “by people not having their care commissioned there”, Mr Lamb said.

Caring for people in the community will save “bucketloads of money” and improve care, Mr Lamb said.

It is hoped that this will lead to a “dramatic reduction” in the number of learning disability inpatients. There are currently around 1,200 people in “assessment and treatment units”, a number Mr Lamb believes can be reduced to 300 or 400. There are another 2,200 patients in other forms of inpatient care who should be cared for elsewhere, he said.

In spring next year, ministers plan to bring forward proposals on tougher sanctions to address a “gap in the law” on effective corporate accountability.

This could include new powers for the CQC. A “fit and proper person” test is being considered for people running companies that provide care, along with new criminal offences. The review will also consider whether the regulator’s primary statutory powers need to be strengthened to hold boards and shareholders to account.

In the meantime, the CQC has pledged to “tighten” its inspection regime. In future, hospitals for people with learning disabilities will get no advance warning of inspections. Teams will include a person with a learning disability.

The LGA, the Association of Directors of Children’s Services and the Association of Directors of Adult Social Services will commit in a concordat to work collaboratively with NHS commissioners.

The “strong presumption” will be in favour of pooled budgets. Local commissioners will have to offer justification where this is not done.