The Care Quality Commission (CQC) has warned 84 councils to make alternative arrangements for care services provided by Allied Healthcare.
It said financial problems faced by one of England’s largest home care providers meant there was “a credible risk of service disruption” in all of them after 30 November.
However, LGC understands Allied Healthcare believes the CQC has acted hastily as its current lender is expected to extend its credit facility beyond 30 November, and another lender has also offered support.
CQC chief inspector of adult social care Andrea Sutcliffe (pictured) said Allied Healthcare had said in April that it would apply for a company voluntary arrangement to allow it to restructure its debts.
The CQC had since monitored whether it could continue to provide home care services.
“We have not received adequate assurance that the company has, or will have, the ongoing funding or new investment necessary to ensure the business can operate beyond [30 November]”, Ms Sutcliffe said.
“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.
“It is now CQC’s legal duty to notify those local authorities where Allied Healthcare is contracted to deliver home care services, that we consider there to be a credible risk of service disruption.”
Local authorities had a statutory duty to ensure continuity of care for service users where a provider ceases to operate, Ms Sutcliffe said.
The CQC said issues with Allied Healthcare affected 13,000 people across the UK, 9,300 of them in England. It said no single local authority contracted more than 10% of home care services to the company, and most significantly less.
“This should mean that, given the four-week planning period, it should be possible for local authorities to arrange alternative provision if that proves necessary,” the regulator said.
The CQC said its position would be revised were Allied Healthcare able to continue in business.
A spokesperson for Allied Healthcare said they were “surprised and deeply disappointed” by the CQC’s decision, calling it “premature and unwarranted”.
“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,” they said. “The CQC has disregarded these assurances in spite of the robust evidence we have provided.”
By issuing its warning, the spokesperson said the CQC was “putting significant pressure on already stretched and pressurised local authorities and clinical commissioning groups.
“Continuity of quality care is our number one priority. We will continue to provide the services entrusted to Allied Healthcare and will work closely with all commissioners of care throughout this period.”
Sally Copley, director of policy, campaigns and partnerships at Alzheimer’s Society, said Allied Healthcare’s situation meant: “There couldn’t be a starker illustration of how close the social care system is to collapse after decades of underfunding.
“It is paramount that steps are put in place so that the people living with dementia affected, and their families, are supported during this very distressing time.”