New measures to ensure continuity of care when providers fail

New safeguards have been outlined by the government that will help to ensure patients who rely on care services will be protected in cases of provider failure, such as the collapse of Southern Cross.

Ministers have laid out a tough system of checks on the finances of the largest care companies, which aims to give an early warning of problems and to challenge financial models that could be unsustainable or compromise quality.

Plans will include improving the overseeing of care providers and the implementation of rules to ensure businesses develop plans to recover from financial distress, as well as contingencies in case of failure.

A 12 week consultation on the plans has been launched to gather the views of the care providers, service users, investors and others from the social care sector.

Care and support minister Norman Lamb said this will help ensure that all patients "will continue to get the care they need if a provider exits the market, regardless of whether they are paid for by the state or pay for care themselves".

The collapse of Southern Cross led to the government having to transfer its 31,000 residents to new operators, a process that was successfully completed in December 2011.