Government will not ‘prop up’ failing care providers

The government will not prop up care providers whose businesses have failed, in the wake of the Southern Cross case.

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The government will not prop up care providers whose businesses have failed, in the wake of the Southern Cross case.

Any increase in regulation should not insulate providers from the effects of their own failures, a Department of Health discussion paper on the issue said today.

The collapse of Southern Cross has prompted calls from social care leaders and the Labour Party for increased regulation of providers’ business practices and finances to protect service users from the impact of failure.

The DH paper endorsed this ambition as the primary goal of any increase in market regulation or oversight though stressed that, while there must be service continuity, there should be no guarantees that particular care homes will stay open.

“People who find themselves in a vulnerable situation – regardless of whether individuals fund their own care, or are funded by the state – need to be assured that they will continue to receive the care that they need until a new provider takes over the care home or alternative provision is found.”

It said the government was not committed to any particular solution, but that possible reforms included:

● A national body taking responsibility for analysing providers’ finances and assessing them against key risks, with information supplied to commissioners.

● Commissioners taking a more rigorous approach to financial issues when purchasing services and intervening to tackle potential failures.

● Councils having a responsibility to publish plans on how they would respond to provider failure in their area.

● Using the registration system to set more stringent financial tests for providers, which could lead to tighter monitoring by the Care Quality Commission or health regulator Monitor.

● A special insolvency procedure being set up to ensure service continuity when providers fail.

In a parliamentary statement today, care services minister Paul Burstow said the government did not have a settled view on the issue as yet but would use responses to the paper to inform its position in time for next year’s social care White Paper.

To have your say contact caringforourfuture@dh.gsi.gov.uk by 2 December.

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