My Lords, the law is clear that, if services may be disrupted due to business failure, the Care Quality Commission will notify local authorities so that they can put appropriate contingency plans in place. In respect of Allied Healthcare, no such notification has been made to date. The public should be reassured that the Care Quality Commission has been monitoring closely the situation at Allied Healthcare and will continue to do so.
My Lords, Allied Healthcare is the latest hedge-fund-owned care provider to have to take drastic action to keep up the huge burden of paying off loans to its creditors. The precarious finances of many domiciliary care companies has already led to large-scale provider closures and to companies handing back contracts in almost half of councils, and we know that residential care is in a similar position. The CVA means that Allied Healthcare has four weeks to come to an arrangement with its creditors. Its closure would have serious consequences for continuity of care and the safety of its 13,500 clients, including many vulnerable older people and people with learning difficulties, and for its 8,700 staff. With local authorities unable to pay fees that cover the actual cost of care or meet the implementation costs of the national minimum wage, let alone address the potential £400 million of deserved back-pay costs for staff sleep-in payments, what reassurances can the Minister give that councils will be able to discharge their statutory duty to deliver care if Allied Healthcare collapses? Does he really think that this is the way to fund the care that people in need of support in their homes deserve?
I thank the noble Baroness for the opportunity to provide that reassurance for people using and benefiting from the care provided by Allied Healthcare. I want to reassure them that the Care Act 2014, passed by the coalition Government, gives local authorities responsibility for continuity of care if a business were to fail. Of course, we are not in that position with Allied Healthcare, because it still has to go through the CVA process. I can reassure people that the LGA has said that councils have “robust”—its word—plans in place to ensure continuity of care if that is required. I put that on record for those who may be worried about it.
We know that extra funding is needed in the sector. Over three years, through a number of means including extra money through the precept and direct funding to local authorities, the Government have increased by about £9 billion the funding available for social care, which we know is required. I also point out that, if you look at domiciliary care provider numbers, you will see that there are 50% more than there were eight years ago. We know that markets have entrants and that providers are exiting, but we have more providers in the market and more packages being delivered than ever before. Ultimately, the backstop is that local authorities have that responsibility to provide continuity of care.
My Lords, does the Minister understand the importance of this Question? Imagine being a very vulnerable person living in a residential home with no alternative to go to or being dependent on a home help for the basics of daily living. Now imagine living under the shadow that the company that provides that service is going to go out of business at any time. Nothing could be more anxiety-provoking for these residents. The Care Quality Commission telling the local authority that there is a problem here is of no comfort. I hope that he will take this Question rather more seriously.
I have huge respect for the noble Lord and his expertise in this area. I take this issue very seriously, which is why I used the opportunity in answering the noble Baroness to provide the reassurance that is in law. Local authorities need to step in to provide continuity of care with notice from the CQC, which now has a new responsibility to monitor the financial sustainability of providers and to make sure that that care is provided, whether it is delivered in-house or through contracts with other providers. That reassurance did not exist before it was introduced in the 2014 Act. It ought to provide a degree of reassurance among vulnerable people, who I accept will be anxious. That responsibility is in law.
The Minister has said that this is a matter of law. There has been a court judgment that fees should be paid to carers for time spent going between clients, which can be nearly half of their day. They may have one hour to spend with many clients. Is he aware that providers of domiciliary care—run as agencies and used by most local authorities —are not honouring that legal decision that this should be paid as part of their employment?
My noble friend is right to bring up that issue. They should of course be paid. If she has any specific examples to share with me, I shall be glad to investigate.
My Lords, everyone knows that the social care sector, particularly in domiciliary and care homes, is under great stress at the moment—I declare my interests as in the register—and we look forward to the Green Paper coming up some time in the summer. I hope it takes into consideration that such homes need to pay not only wages and pensions but, for larger ones, an apprenticeship levy. Normally there would be a market for mergers but at the moment the sector is anxious about inheriting sleep-in liabilities. Can the Minister give any guidance about when these issues within the department and the Treasury will be remedied?
We know that the issue of back-dated pay for sleep-ins has had an impact on this and other sectors. Two aspects of this are, first, that the Government have waived penalties for non-payment prior to July 2017; and, secondly, that there now exists an HMRC scheme that allows providers to work with HMRC and the business department to understand their liabilities and gives them a further year to pay them. That is the support we offer to any organisation affected by the changes to the taxation arrangements of sleep-ins.