May 2020: Coronavirus / COVID-19
This chapter provides an overview of:
- what constitutes provider failure under the Care Act 2014;
- what constitutes service interruption under the Care Act 2014;
- how to identify potential failure and mitigate it.
It also provides procedures for:
- what to do in the event of provider failure;
- what to do in the event of service interruption.
It is written in line with:
- Sections 19 and 48 to 57 of the Care Act 2014;
- Care and Support (Business Failure) Regulations 2015;
- Care and Support (Market Oversight Criteria) Regulations 2014;
- Care and Support (Market Oversight Information) Regulations 2014.
It should be read in conjunction with the Care and Support Statutory Guidance, Department of Health and Social Care Chapter 5.
OTHER RELEVANT INFORMATION
- 1. Introduction
- 2. Definitions
- 3. Service Interruptions because of Business Failure
- 4. Business Failure involving a Provider in the CQC Oversight Regime
- 5. Business Failure involving a Provider not in the CQC Oversight Regime
- 6. Service Interruptions other than Business Failure
- 7. Assessing and Mitigating Risk
- 8. Action to be Taken in the event of Risk of Service Failure
The possibility of interruptions to care and support services causes uncertainty and anxiety for the person receiving services, their carers, family and friends. This procedure follows the Care Act 2014, to ensure that Rutland County Council (RCC) meets the duty we have to make provision to ensure that the care and support needs of those receiving the service continue to be met in circumstances of service failure or interruption. It explains how RCC must exercise and discharge its powers and duties.
This guidance covers all services, including but not limited to:
- residential care;
- day centres;
- supported living;
- and other statutory and non-statutory support services.
All services should be considered under this guidance.
The following definitions are taken from Chapter 5, Care and Support Statutory Guidance.
2.1 Business failure
Business failure is defined in the Care and Support (Business failure) Regulations 2015. Business failure is defined by a list of different events such as the appointment of an administrator or the appointment of a receiver or an administrative receiver (click here for the full list). Service interruption because of “business failure” relates to the whole of the regulated activity and not to parts of it.
2.2 Temporary duty or duty
Temporary duty or ‘duty’ means the duty on local authorities to meet needs in the case of business failure. ‘Temporary’ means the duty continues for as long as the local authority considers it necessary. The temporary duty applies regardless of whether a person is ordinarily resident in the authority’s area (see Ordinary Residence). The duty applies from the moment the authority becomes aware of the business failure. The actions to be taken under the duty will depend on the circumstances, and may range from providing information on alternate providers, to arranging care and support itself. The duty is to meet needs, but the local authority has discretion as to how it meet those needs.
3. Service Interruptions because of Business Failure
3.1 Temporary duty
Local authorities are under a temporary duty to meet people’s needs when a provider is unable to continue to carry on the relevant activity in question because of business failure – regardless of whether the provider is under the Care Quality Commission (CQC) Market Oversight Regime or not.
The duty applies when a service can no longer be provided and the provider’s business has failed. If the provider’s business has failed but the service continues to be provided the duty is not triggered. This often may happen in insolvency situations where an Administrator is appointed and continues to run the service.
The duty applies where a failed provider was meeting needs in the local authority’s area. It does not matter whether or not the local authority has contracts with that provider. It does not matter if all the people affected are self-funders. The duty is in respect of people receiving care by that provider in that authority’s area – it does not matter which local authority (if any) made the arrangements to provide services.
3.2 Meeting needs
The needs that must be met are those being met by the provider immediately before the provider became unable to carry on the activity. The duty is for the needs to be met, but it is for the local authority to decide how that is done, and there is significant flexibility in the Care Act 2014 in determining how to do so. It is not necessary to meet those needs through exactly the same combination of services that were previously supplied.
The decision of how to meet the needs must be made in conjunction with the individual concerned, their carer/s, and / or anyone else that the individual requests to be involved.
Where the person lacks capacity, the local authority must involve anyone who appears to be interested in the person’s welfare.
Where a carer’s service is involved, the local authority must involve the carer and anyone the carer asks the authority to involve. The authority must take all reasonable steps to agree how needs should be met with the person concerned. It should seek to minimise disruption for people receiving care, in line with the wellbeing principle (see Promoting Wellbeing) and, although authorities have discretion about how to meet needs, the aim should be to provide a service as similar as possible to the previous one.
The authority should act promptly to meet individuals’ needs. The lack of any assessment (see Assessment) or a financial assessment (see Charging and Financial Assessment) must not be a barrier to action. Neither is it necessary to complete those assessments before or whilst taking action.
The local authority must meet needs irrespective of whether those needs would meet the eligibility criteria. All people receiving services in the local authority’s area must be treated the same. Where someone is ordinarily resident or how they usually pays for the costs of their support must have no influence on whether the authority fulfils the duty.
4. Business Failure involving a Provider in the CQC Oversight Regime
The Care and Support (Market Oversight Criteria) Regulations 2014 set out the criteria for which providers fall within the CQC oversight regime. The CQC will determine which providers satisfy the criteria.
If there is a significant risk to the financial sustainability of the provider’s business, the CQC may take action.
Where the CQC is satisfied that a provider in the regime is likely to become unable to continue with their activity because of business failure, it is required to tell the local authorities which it thinks will be required to carry out the temporary duty so that they can prepare for the local consequences of the business failure. When and how to involve local authorities is a decision for CQC, in the light of what it considers is the best course of action to maintain continuity of care for service users.
The CQC may work with the affected local authorities to help them fulfil their temporary duty. CQC guidance on market oversight explains how it works with authorities in such situations.
It is not required to make contact with authorities if, for example, a single home owned by the provider in the regime is likely to fail because it is unprofitable and the CQC is not satisfied that this will lead to the whole of the provider’s relevant regulated activity becoming unable to continue.
In these circumstances, it is the provider’s responsibility to wind down and close the service in line with its contractual obligations and it is expected that providers would do so in a planned way that does not interrupt people’s care.
5. Business Failure involving a Provider not in the CQC Oversight Regime
Business failure will usually involve an official being appointed (e.g. an Administrator) to oversee the insolvency proceedings. An Administrator represents the interests of the creditors of the provider that has failed and will try to rescue the company as a going concern and therefore the service will usually continue to be provided, and the exercise of local authorities’ temporary duties may not be called for.
It is not for the local authority to become involved in the commercial aspects of the insolvency, but it should cooperate with the administrator if requested.
The local authority should cooperate with an Administrator if requested. Local authorities should, as long as it does not adversely affect people’s wellbeing, support efforts to maintain service provision.
6. Service Interruptions other than Business Failure
The Care Act 2014 sets out when a local authority must meet a person’s eligible needs (see Eligibility and Section 18, Care Act; Duty to Meet Needs for Care and Support and Section 20, Care Act; Duty and Power to Meet a Carer’s Needs for Support). These duties apply whether or not business failure is at issue. Temporary duty applies in addition where the local authority is not already required to meet needs.
6.1 Urgent needs
It also covers the circumstances where care and support needs may be met, where no duties arise under the Care Act but the local authority may meet an adult’s needs anyway (see Section 19, Care Act; Power to Meet Needs for Care and Support). The power to meet needs for care and support. In particular, it permits a local authority to meet needs which appear to it to be urgent. In this context, ‘urgent’ takes its everyday meaning, subject to interpretation by the courts, and may be related to, for example, time, severity etc. This is likely to be the case in many situations where services are interrupted but business failure is not the cause. This is may be the case in situations where services are interrupted but business failure is not the cause.
The power to meet urgent needs is not limited to services delivered by particular providers and is therefore available where urgent needs arise as a result of service failure of an unregistered provider (that is a provider of an unregulated social care activity). The power may also be used in the context of quality failings of providers if that is causing people to have urgent needs.
The Care Act gives local authorities a power to meet urgent needs without having first conducted a needs assessment, financial assessment or eligibility criteria determination. The local authority may meet urgent needs regardless of whether the adult is ordinarily resident in its area. This means the local authority can act quickly if circumstances warrant. It does not require that authorities must act.
The local authority might exercise the power where the continued provision of care and support to those receiving services is in imminent jeopardy and there is no likelihood of returning to ‘business as usual’ in the immediate future, leading to urgent needs.
Not all situations where a service has been interrupted or closed will merit local authority involvement because not all cases will result in adults having urgent needs. Whether to act under this power is a judgement for the local authority to make in the first instance.
If a provider has not failed, it is the provider’s responsibility to meet the needs of individuals receiving care in accordance with its contractual liabilities. The power provides for where the provider cannot or will not meet its responsibilities, and where the authority judges that the needs of individuals are urgent.
Where the local authority does get involved in ensuring needs continue to be met, that involvement might be short-lived or enduring over some months.
It is for the local authority to decide if it will act to meet a person’s needs for care and support which appear to it to be urgent. It must act lawfully, taking decisions that are reasonable.
7. Assessing and Mitigating Risk
There are a number of forms of risk which may lead to provider failure either at a whole provider level or on an individual service basis.
- Financial: for example high vacancy levels; escalating running costs;
- Quality drivers: for example safeguarding notifications; serious untoward incidents;
- Personalisation: for example service user choice leading to vacancy levels;
- Market: for example high number of providers vying for the same service users; staffing issues.
Currently information on all of these is collated where it comes to the notice of the Council by the Contracts Team. The Contracts Team are responsible for monitoring and maintaining a database to ensure that risks and concerns with providers are flagged to the relevant team manager and Head of Service. For residential care providers, this is logged on the Risk Management Framework, which acts as the mechanism for identifying risk.
Agreement between the Contracts Team Manager and the Head of Service / relevant team manager must be reached on any course of action to address risks. In the first instance, actions to mitigate the risk should be sought from the service provider. Where the provider is under the CQC regime, risks and any requests for action should be flagged to the CQC.
8. Action to be Taken in the event of Risk of Service Failure
Click here to view Action to be taken in the Event of Risk of Service Failure Flowchart
Where action needs to be taken because of imminent jeopardy, there are a number of different options that could be taken dependent on the circumstances. Examples of these:
- identifying support that we can directly give to the provider in order to mitigate risk and prevent the issue escalating, including placing our staff directly in the provider’s service to deliver services and / or support managers;
- working with neighbouring authorities to pool staff to place within a service provider as above;
- working with neighbouring authorities to use their service provision as short-term support;
- checking vacancies at other providers to identify where service users can be moved to, either in the short or long term, and negotiating bed / day spaces in this provision;
- gathering information on self-support provision or alternative services that service users can self-refer to, and providing this to service users, either directly or via the failing service provider;
- identifying internal staff who can work directly with service users on a short-term basis to assist them in self-referring to alternative provision.
The exact actions undertaken will be dependent on the circumstances.
The interventions that we put in as a local authority should be to mitigate risk to service users, based on our assessment of their immediate care and support needs. We must ensure that we do not allow providers to absolve their responsibility to manage their risk by our interventions.