Government warned of care 'risk'
The Government is not doing enough to avoid a repeat of the Southern Cross care homes crisis, an influential group of MPs has warned.
Neither Whitehall nor local authorities are monitoring the financial health of providers, and some companies are racking up huge debts, according to the Public Accounts Committee (PAC).
The abrupt collapse of Southern Cross, Britain's biggest care homes operator, over the summer caused turmoil for more than 30,000 elderly and vulnerable people.
The firm was crippled by having to pay a £250 million rent bill as councils sought to cut fees in the wake of the first credit crunch.
However, the PAC's report said effective oversight of the market was still not in place.
There is no early warning system for when providers are getting into difficulty, and no apparent plan for what happens if they fail. At the same time, care homes are facing rises in costs and reductions in what local authorities will pay for places.
Currently 63% of funding for homes comes from the public purse. "Reducing this funding could destabilise the market or create problems for the NHS with elderly people blocking beds as local authorities no longer fund the social care places," the cross-party committee cautioned.
Chairman Margaret Hodge said: "The Department of Health must get to grip with the very real risks to the social care market, if we are to avoid another Southern Cross. No one, government or local authorities, really knows what is going on locally or whether one provider is becoming too dominant.
"Effective oversight of the care market, including market share of large providers at the local and regional level, is essential to protect social care users and taxpayers."
The general secretary of the Unison union, Dave Prentis, said: "Unison has long been warning about the huge dangers lurking in the care sector. We need a radical shake-up to protect elderly people, and the people working to care for them, from a Southern Cross II taking place. It is time for the damaging privatisation experiment to end."