CQC warns councils of ‘credible risk of service disruption’, claiming future of home care provider is in doubt

The Care Quality Commission (CQC) has warned 84 local authorities to prepare for possible disruption to home care services because of its doubts over the future funding of Allied Healthcare.

The CQC wrote to the councils yesterday, saying there was a “credible risk of service disruption” if the company’s fortunes did not improve, so that the authorities could start making plans to ensure continuity of care for service users.

CQC chief inspector of adult social care Andrea Sutcliffe said the company had confirmed it had secured funding until 30 November, but the CQC had not received “adequate assurance” Allied Healthcare would be able to secure “the ongoing funding or new investment” needed to ensure it could operate beyond the month.

• Disabled adults ‘unable to get around home’ due to funding shortfall
• Additional short-term funding required to shore up ‘failing’ provider market

“We have encouraged Allied Healthcare to provide us with a realistic financially backed plan to support the future sustainability of the business, and given them every opportunity to do so, but they have failed to provide adequate assurance regarding future funding,” Sutcliffe said.

‘Premature and unwarranted’

However, the provider, which entered a company voluntary agreement with creditors in May to restructure its debts, labelled the CQC’s warning as “premature and unwarranted”.

In a statement today, it said: “We have demonstrated throughout our discussions with the regulator that Allied Healthcare’s operations are sustainable and safe, that we have secured a potential replacement of our credit facility, that there is no risk to continuity of care and that we have a long-term business plan in place that will continue to deliver quality care across the UK.

“The CQC has disregarded these assurances in spite of the robust evidence we have provided.”

The provider added the CQC notification would put “significant pressure on already stretched and pressurised local authorities” and said it would continue to provide services and work closely with commissioners of care.

Councils must prepare to step in  

Allied Healthcare is one of the largest home care providers in England and one of 59 adult social care providers within CQC’s market oversight scheme, which monitors the financial health of the largest providers of adult social care in England.

It was this function that was exercised by the CQC on Tuesday to warn councils about the potential fallout for adult social care services, should the company go out of business.

For their part councils, under section 48 of the Care Act, must ensure that adults’ needs for care and support continue to be met when there is a business failure of a provider who is registered with the CQC and unable to perform the regulated care activity. This duty applies for as long as the council considers necessary and to all service users in a local authority’s area, regardless of whether the council was responsible for meeting their needs in the first place.

This means that should Allied Healthcare fail to find funding for the future, councils would be charged with finding alternative providers of care to take over the services without any disruption.

Reflection of sector pressures

Senior fellow at The King’s Fund Simon Bottery said the provider’s issues were a reflection of the state of the sector more generally:

“The problems faced by Allied Healthcare are a symptom of the huge pressures facing a social care system which is at breaking point after years of under-funding. The additional funding announced by the government in the budget offers some short-term relief but is another sticking plaster when radical reform is needed.

“Allied Healthcare are not the only major care provider experiencing financial problems. Their difficulties are yet another wake-up call to the huge problems in social care. The government’s forthcoming social care green paper cannot shy away from fundamental reform of a system that is patently not working.”