New powers for CQC to delve into finances of care homes

Year Published: 2013

The Care Quality Commission (CQC) has announced it will have new powers to intervene on the finances of operators in the care sector. The CQC inspectors will be able to monitor the finances of the largest care homes and domiciliary care providers, in order to try and prevent the increasing numbers of sudden closures.

The care home sector has become highly geared following a spate of acquisitions in the boom years. This left many of them exposed to changes in the market and hence when the recession hit, this brought some high profile insolvencies such as Southern Cross in 2011. There were 60 insolvencies in 2011 and this increased to 67 in 2012. 250 operators have been closed down in the past 5 years.

Norman Lamb, the care minister, said that the CQC will implement a “tough series of checks” on 50 to 60 of the largest operators. The CQC will have the power to require regular financial and relevant performance information as well as “sustainability plans”.

David Behan the chief executive of the CQC, has stated that “set alongside our plans for the appointment of a chief inspector of social care and support, tougher registration requirements on social care providers and the introduction of a new ratings system, these new measures will strengthen our oversight to help ensure that risks to people are identified and acted upon as early as possible”.

Many feel that these powers are long overdue and are asking why action has not been taken earlier and why the powers are only limited to the main operators. It’s a case of too little too late and the situation is set to become more risky for the 30,000 service users, as local authorities have cut £2 billion from their spending on social care.

There has certainly been a missed opportunity to regulate the financial affairs of the entire sector, not just the major operators. It is concerning that this seems to be an incomplete solution and service users will still remain at risk of interruption in their care provision through the collapse of their care home operator.

For further information on care home regulations, please contact Jeremy Orrell, the head of our Health & Social Care sector group, on 0844 391 5829.

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