1.5 Managing Provider Failure

1. Introduction

This policy statement sets out how Lancashire County Council will fulfil its duties under Section 48 of the Care Act 2014, to temporarily meet the care and support needs of an adult, and the support needs of a family or informal carer, when a registered care provider (for example, a care home, home care, or supported living provider) is unable to carry on a regulated activity because of business failure. The possibility of interruptions to care and support services cause uncertainty and risk for people receiving services, their carers’, and their family. The Care Act 2014 makes provision to ensure that, in such circumstances, the care and support needs of those receiving the service continue to be met.

This policy aims to ensure that adults and carers are not left without the care or support they need if their registered care provider becomes unable to carry on providing it because of business failure.

2. Principles

The focus of all business failure intervention is ensuring the wellbeing and safety of the people who use Lancashire County Council services. The following principles will underpin our approach:

• Safeguarding the individual(s) from any risk of harm, neglect or omission of care arising from provider failure.
• Taking account of the individual’s assessed needs and their views, wishes and feelings.
• Considering the views of others – carers, relatives, advocates. Processes undertaken will be person-centred and compassionate and conducted with dignity, respect and courtesy.
• Continuity of care should be maintained as far as possible.
• Actions should support employer/employee responsibilities e.g., acquisition, TUPE.
• We will engage with and offer support to employers to explore potential for collaboration to reduce the negative impact on the workforce and loss to the health and social care market.

There are a range of situations that may give rise to business failure and ‘disruption to care and support services’ that require action by Lancashire County Council.  Examples include:

• Financial – insolvency, going into administration, going into the Care Quality Commission (CQC) financial oversight regime owing to:
  • the appointment of an administrator.
  • a receiver is appointed.
  • a winding up order is made.
  • an application for bankruptcy is submitted.
  • a board of Trustees with registered charity status and a regulated service provider de-commission the service citing financial issues as the primary reason.
• CQC De-registration – including safeguarding or quality of service concerns.
• Contract termination – continuous breach and failure to meet contractual obligations.
• Force majeure – environmental disaster e.g., fire, flood, immigration enforcement on whole workforces, outbreak of illness such as norovirus or meningitis at a care home or other emergency.
• Strategic Exit – provider leaving the market due to retirement, disinvestment or change of registration of service type.

3. The Legal Framework

3.1 Temporary duty

‘Temporary duty’ or ‘duty’ means the duty on  Lancashire County Council to meet needs in the case of business failure. ‘Temporary’ means the duty continues for as long as Lancashire County Council considers it necessary. The temporary duty applies:

• regardless of whether a person is ordinarily resident in the authority’s area (see Ordinary Residence chapter).
• from the moment the authority becomes aware of the business failure.

The actions to be taken by Lancashire County Council will depend on the circumstances, and may include the provision of information and advice. The duty is to meet assessed needs, but Lancashire County Council has discretion as to how it meets those needs.

3.2 Regulated activity

These are regulated activities involving or connected with the provision of health and social care. The services and activities that are regulated are prescribed in Schedule 1 of the Health and Social care Act 2008 (Regulated Activities) Regulations 2015. Providers of these regulated activities must be registered with the Care Quality Commission (CQC). Examples of regulated activities include the provision of personal care and accommodation for persons who require nursing or personal care.

3.3 Meeting health needs

Responsibility for meeting an adult’s health needs lies with the local Integrated Care Board (ICB). For people living in the community or in residential provision, who are in receipt of community nursing services, Lancashire County Council will alert the relevant Integrated Care Board to ensure adult’s health needs continue to be met during service interruption.

For individuals in nursing homes Lancashire County Council will endeavour to commission an alternative, suitably registered care home placement with nursing.

Where a person is in receipt of fully funded NHS Continuing Health Care regardless of care setting, the ICB will be alerted to make the necessary arrangements.

4. Who This Policy Applies To

The ‘temporary duty’ applies to you if placed or in receipt of registered services within the Lancashire County Council area with the responsibility regardless of whether:

• You or your carer is ordinarily resident within Lancashire.
• You or your carer is in receipt of a domiciliary service.
• Lancashire County Council has conducted a needs assessment or a carer’s assessment.
• Your needs meet the eligibility criteria.
• You fund your own care.
• Lancashire County Council has a contract with the failed provider, or the failed provider is subject to the CQC regulatory framework.
• Another local authority made the arrangements to provide the service, the cost of which was paid for by that authority or that authority was making direct payments in respect of those needs.

Given the serious impact of provider failure on those in our care, Lancashire County Council’s intent in applying the duty is, wherever possible, to avoid some of these impacts through early engagement and action.

Lancashire County Council expects providers to act responsibly regarding the welfare of the people to whom they provide care. Lancashire County Council expect providers to inform and work with them at an early stage following the emergence of any likelihood of service disruption rather than approaching Lancashire County Council only at a stage of crisis.

Lancashire County Council reserves the right to charge for its services and claim any relevant costs back from responsible authorities who have placed their residents in Lancashire.

5. When Does the Temporary Duty Apply?

The ‘temporary duty’ will apply as soon as Lancashire County Council becomes aware of a business failure and/or the provider can no longer continue its activity and where Lancashire County Council consider that the needs to be met are urgent.

For example, where a business ceases to operate solely because of its failure to meet the CQC’s standards e.g., the CQC has given a rating of inadequate, or quality failures result in the needs not being met; Lancashire County Council has a discretionary power that could be exercised to meet needs.

If a business is declared insolvent and an Administrator is appointed, this constitutes a business failure, but the service will continue to be provided. In cases such as these, Lancashire County Council has no duty to intervene to provide care and support. It is not for Lancashire County Council to become involved in the commercial aspects of the insolvency but should cooperate with the Administrator if requested.

Lancashire County Council should, as far as it does not adversely affect your safety and wellbeing, support efforts to maintain service provision by, for example, not prematurely withdrawing you from the service that is affected or ceasing to commission that service.

If, however, the service does not continue to run following business failure, the temporary duty will apply, and we will step in to ensure your care and support needs and your carer’s support needs are met.

Not all situations where services have been interrupted or a service has closed will require involvement from Lancashire County Council, because not all cases will result in you having urgent needs. Lancashire County Council require all providers to have contingency plans in place to respond to service interruption. This includes a requirement for provider to notify Lancashire County Council via the Customer Access Service (or the Lancashire County Council Emergency Duty Team out of hours) if they need to implement their contingency plans.

For example, if a care home closes and residents have agreed to the provider’s plans to move the residents to a nearby care home, that the provider also owns, Lancashire County Council will not necessarily have to become actively involved as urgent needs might not arise.

Lancashire County Council will need to be satisfied that the arrangements put in place will adequately meet the urgent needs. When a notification is received, Lancashire County Council will make a judgement as to whether the temporary duty needs to be exercised.

The temporary duty will apply for as long as Lancashire County Council considers it is necessary, i.e., until it is satisfied that your needs will be met by a new provider and/or alternative arrangements are in place.

If a provider has not failed, it is primarily the provider’s responsibility to meet your needs, in accordance with its duty of care to individuals and its contractual liabilities. The duty provides a backstop for use where a provider cannot or will not meet its responsibilities, and where Lancashire County Council judge that your assessed needs will not be met (and where Lancashire County Council is not already under a duty to meet your needs, e.g., under section 18 of the Care Act 2014).

Where Lancashire County Council is involved in ensuring urgent needs continue to be met, that involvement may be short or medium term (e.g., the giving of information and advice) or over some months (e.g., commissioning alternative placements or care providers for people following service cessation).

Force Majeure (e.g., flooding) or complications with suppliers (e.g., a nursing agency unable to source qualified staff) should not in themselves automatically be considered to trigger the use of the power. In all cases, the test is whether we consider you have assessed urgent needs to be met.

The lack of an individual needs assessment must not be a barrier to action. If there is no assessment of needs, carer’s assessment or financial assessment and irrespective of whether those needs would meet the eligibility criteria, Lancashire County Council will act as promptly as possible to meet needs under the temporary duty.

Where Lancashire County Council requires further information to enable it to meet this temporary duty, it will request that the provider or anyone involved in the provider’s business, as appropriate, supply the information required.

For example, this may involve up to date records of the people who are receiving services from that provider, and information on the priority and complexity of the adult’s needs to be met to help us to identify those who may require our support.

The temporary duty on Lancashire County Council to meet needs in the case of business failure applies regardless of whether the provider is in the market oversight regime. Despite the CQC having a market oversight responsibility Lancashire County Council has the responsibility to ensure continuity of care in respect of business failure of all registered providers.

5.1 Discretionary power to meet urgent needs

In considering whether the needs are urgent, Lancashire County Council will assess and make a judgement as to whether the need to take urgent action is required. The judgement will consider if a failure to provide services will endanger your life and whether there is an immediate significant risk and impact on your physical health or mental health and wellbeing.

Every service interruption will be considered on its facts and circumstances.

Where Lancashire County Council consider the needs to be urgent, it may exercise its discretionary power to meet needs without first conducting a needs assessment, financial assessment, or eligibility determination and regardless of whether you are ordinarily resident within Lancashire County Council boundary (Section 19 Care Act 2014).

Where the continued provision of care and support is in imminent jeopardy and there is no likelihood of returning to business as usual, Lancashire County Council will exercise its discretionary power to continue to meet urgent needs whilst alternative arrangements and next steps are considered.

The power is not limited to regulated providers and may be extended to unregistered providers, i.e., unregulated providers of a social care activity.

6. What Needs will be Met?

Lancashire County Council will meet your care and support needs ,and the support needs of carers, which were being provided immediately before the provider became unable to carry on that activity. It must ensure assessed needs are met. It may not be possible for Lancashire County Council to meet needs using the same combination of services that were previously supplied. However, Lancashire County Council will aim to provide a service as similar as possible to the previous service and on the basis that your assessed needs will continue to be met.

Lancashire County Council must take all reasonable steps to agree how your needs should be met. If you lack capacity, Lancashire County Council will assess needs in accordance with the Mental Capacity Act 2005 and where it is not possible to help you make your own decision, decisions concerning your service will be made in your best interest and considering the views of others – i.e., carers, relatives, and advocates (see Mental Capacity).

7. How will Needs be Met?

Lancashire County Council has a discretion as to how it will meet needs when this temporary duty becomes applicable. Examples include:

• information, advice, advocacy, and signposting into other services
• access to alternative accommodation,
• care and support at home or in the community,
• social work interventions,
• goods and facilities.

You may only require information and advice on alternative services available locally to enable you to make a properly informed choice about a new provider.

You may require us to actively arrange care with a different provider for a period of time, to ensure there is continuity of care.

The steps taken will depend on both the circumstances of the provider failure and the nature of the support you or your carer requires from Lancashire County Council.

8. Who will be Involved in Deciding how Needs will be Met?

In deciding how to meet your care and support needs, Lancashire County Council will involve:

• you.
• any carer that you have.
• anyone who you ask us to involve.
• where you lack mental capacity to ask us to involve other persons, we will involve an Independent Advocate if there is no other appropriate person is available.
• local National Health Service partners including the Integrated Care Board, General Practitioners, community nursing etc.

In deciding how to meet a carer’s needs for support, Lancashire County Council will involve:

• the carer.
• any person the carer asks us to involve.
• an Independent Advocate where appropriate.

Lancashire County Council will take all reasonable steps to agree how needs should be met with you or your carer. In line with the wellbeing principle, it will seek to minimise disruption to you when receiving care.

9. Will a Charge be Made when Discharging the Temporary Duty?

Lancashire County Council will charge you for the cost of meeting your needs (subject to the financial assessment process)  and it will also charge another local authority which was previously meeting those needs if it temporarily meets your needs if you are not ordinarily resident in Lancashire. Lancashire County Council will charge you for the actual costs incurred as a result of temporarily meeting your needs by providing alternative care or support (subject to the financial assessment process) .

Lancashire County Council will not charge you for the provision of information and advice.

Lancashire County Council will recover the actual costs of temporarily meeting your needs if you are not ordinarily resident within the Lancashire boundary from the relevant local authority which made or funded the arrangements with the failed Provider.

The costs recovered will be those costs incurred by Lancashire County Council in meeting the needs under the Temporary Duty. Costs can also be recovered from the relevant local authority in Wales or Scotland or the relevant Health and Social Care Trust in Northern Ireland that arranged or funded the care and support with the failed Provider.

10. Cross Border Placements

There will be close communication and co-operation between Lancashire County Council and the relevant local authority in Wales or Scotland or the relevant Health and Social Care Trust in Northern Ireland that arranged or funded the care and support with the failed provider. Generally, responsibility will continue to remain with the local authority that arranged and/or funded the care and support. See Cross Border Placements.

11. NHS Continuing Care

If you are in receipt of NHS Continuing Health Care, commissioned by the Integrated Care Board, the relevant Integrated Care Board will be expected to make the necessary arrangements, in close communication with Lancashire County Council. See  Continuing Health Care (NHS).

12. Arrangements Between Lancashire County Council and other Authorities

Lancashire County Council will work closely with the relevant local authorities involved in arranging and/or funding your care and support. This is to ensure that alternative care and support is secured with minimum delay and disruption. In the event of a dispute, the primary consideration will be to ensure that appropriate arrangements for your care and supports needs continue to be met.

Safeguarding duties apply regardless of provider failure. There may be an increased risk of abuse, neglect or omission of care which will require a safeguarding adults referral and safeguarding plans to be put in place so that risks are mitigated.

13. Business Continuity

Lancashire County Council requires providers to maintain a Business Continuity Plan. There should be:

• An annual review of the Business Continuity Plan.
• An identified officer responsible for maintaining the provider’s business continuity arrangements; Training and awareness in business continuity for managers and staff who have a key role in business continuity arrangements.

Lancashire County Council will maintain contact with providers, and expect them to notify us about problems and concerns that might impact on business continuity. When it becomes necessary to activate contingency planning arrangements, the provider will notify Lancashire County Council as soon as reasonably possible via the Customer Access Service and the Emergency Duty Team out of normal business hours (see Local Contacts). Lancashire County Council expect providers to make their business continuity plans available as part of annual monitoring exercises and/or on request. Lancashire County Council also expect providers to be reasonable when determining whether to cease to trade and have added additional protections into new contracts to ensure providers give Lancashire County Council notice of an intention to exit the market.

We will maintain up to date information about alternative places in localities and will aim to undertake annual service user reviews.

14. Roles and Responsibilities

Once notification of provider failure is confirmed, de-commissioning and contract notice is received and there is a requirement to relocate you or find alternative service provision, the process is managed by Lancashire County Council’s Care Settings Intervention Team.

The Team along with the Contracts Management team will work with the Provider and in accordance with the contract, to determine a notice period for when the service will cease.

The purpose is to agree an appropriate period (where possible) in which to find alternative service provision for the individuals affected.

Once a notice period is agreed, the Care Settings Intervention Team will take the lead in managing the closure process to ensure that you continue to have your assessed health and social care needs met. In the case you need to transfer to an alternative care home, information is made available via information packs and access to the Care Finding service. A Social Worker or Social Care Support Officer will be allocated to support you and undertake a review of your needs. They also provide support to family member(s)/representatives in finding a suitable alternative care homes of their choice.

It may be necessary during the closure phase for additional service provision to be commissioned to reduce risk and maintain the safety and quality of the current service provision. This service may be sourced by the provider from an appropriately registered nursing and / or social care provider.

15. Working in Collaboration with ICBs and NHS England

The level of nursing and social care intervention needed by the provider will be determined at the outset and reviewed on an ongoing basis and agreed in consultation with the provider. Where a provider fails to secure additional services, Lancashire County Council will arrange social care provision and the ICB commissioner will arrange safe nursing provision.

The aim is to ensure that your nursing and social care needs continue to be met whilst alternative services are secured. The provider will be responsible for any costs incurred.

The ICBs in Lancashire are active and valued partners in the closure process for both residential, nursing home and domiciliary provision. Specifically, the ICB will support the process through media communications, liaising with NHS England and the Commissioning Support Unit regarding Continuing Health Care (CHC) assessments, nursing assessments, contacting individual’s General Practitioners, district nursing services and allied health professionals.

16. Further Reading

Chapter 5, Managing Provider Failure and other Service Interruptions, Care and Support Statutory Guidance (Department of Health and Social Care)