One of the biggest home care providers in England may be on the brink of collapse, inspectors have warned.
The Care Quality Commission (CQC) has raised concerns that Allied Healthcare may not be able to continue to operate after November 30.
The company offers home care services across 84 councils to around 9,300 people in England. It provides care to 13,500 in the UK, in total.
It offers a range of services, such as cleaning, shopping, showering and dressing pensioners, preparing meals and managing medication.
CQC said it has written to 84 English local authorities who commission some sort of care services through Allied Healthcare to notify them of its concerns.
But Allied Healthcare, whose headquarters is based in Stafford, issued reassurances that its operations are ‘sustainable and safe’.
CQC said the firm announced its intention to seek a rescue plan in April, by applying for a Company Voluntary Arrangement to restructure its debts.
Struggling companies try to agree a CVA with creditors in an attempt to revive their fortunes while simultaneously paying off debts.
The regulator said it has been monitoring the situation ‘closely’ to ensure that care continues for people who receive home care from the company.
It said that it has not received ‘adequate assurance’ that the company can continue to operate from December onwards.
Allied Healthcare, owned by German private equity firm Aurelius since 2015, agreed a rescue plan in May and said it is ‘surprised’ by the CQC’s warning.
The firm has blamed an increase in minimum wage and a squeeze on social care budgets, the Financial Times reports.
CQC’s chief inspector of hospitals, Andrea Sutcliffe, said: ‘Allied Healthcare has been able to confirm funding until 30 November 2018.
‘However, we have not received adequate assurance the company has, or will have, the ongoing funding or new investment necessary to ensure the business can operate beyond this date.’
Ms Sutcliffe continued: ‘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.
‘We are doing this now to give local authorities as much time as possible to plan for maintaining continuity of care for people relying upon services from this provider, should this be required.’
She added that local authorities are bound to ensure continuity of care for everyone using an adult social care services in the event it ‘ceases to operate’.
Ms Sutcliffe added: ‘I understand this is a very unsettling time for everyone who uses Allied Healthcare’s services, their families and loved ones, and staff.
‘It is of course possible that the company is able to avoid service disruption, and, if that is the case, we will revise our position accordingly.’
A spokesman for Allied Healthcare said: ‘We are surprised and deeply disappointed by CQC Market Oversight’s decision, which we regard as 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.
‘The CQC has disregarded these assurances in spite of the robust evidence we have provided.
‘By issuing a Stage 6 notification, the CQC is 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.’
George McNamara, director of policy at the charity Independent Age, said: ‘This is a deeply worrying time for the thousands of older people and their families up and down the country who rely on Allied Healthcare as a vital lifeline of care and support.
‘The Government must play an active role in bringing together all parties and, if necessary, step in and do all possible to ensure older people do not become the victims of a broken system.’