Care home owners face finance check
Care home owners will be forced to prove they are financially stable to avoid a second Southern Cross-style collapse, officials said.
The Government is to implement a series of safeguards to prevent a repeat of the crisis.
Care and support minister Norman Lamb announced that the Care Quality Commission (CQC) will be able to monitor the financial health of the largest providers.
The abrupt collapse of Southern Cross, Britain's biggest care homes operator, caused turmoil for more than 30,000 elderly and vulnerable people in 2011. The fiasco underlined the financial difficulties in the care home sector.
Mr Lamb announced that the CQC will implement a "tough series of checks" on the largest care companies - including those that provide care in people's own homes. The move will give "early warnings" if a company is in trouble, he said.
The CQC will have power to require regular financial and relevant performance information from the 50 to 60 largest companies, and providers will also be forced to submit "sustainability plans".
And if a company is in trouble the CQC will have the power to commission an independent business review to help the provider to return to financial stability. Officials said if a company is in financial difficulty it can be a predictor of poor care.
"Everyone who receives care and support wants to know they will be protected if the company in charge of their care goes bust," said Mr Lamb.
"The fear and upset that the Southern Cross collapse caused to care home residents and families was unacceptable. This early warning system will bring reassurance to people in care and will allow action to be taken to ensure care continues if a provider fails."
CQC chief executive David Behan added: "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's care are identified and acted upon as early as possible."