The fate of thousands of home care service users across England remains unresolved this week, following warnings that Allied Healthcare may be unable to continue operating beyond November.
The Care Quality Commission wrote to 84 councils earlier in the month warning that there is a “credible risk” Allied will not be able to continue to provide services once a loan repayment becomes due on November 30.
Concerns around the healthcare group – which is owned by the German private equity firm Aurelius – have been high since debt restricting by means of a Company Voluntary Arrangement with creditors was agreed in May.
Nevertheless, the CQC’s Stage 6 notification prompted a sharp response from Allied, which said it was “surprised and disappointed” at the regulator’s action.
In a statement, the company said: “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.”
Almost 9,300 care service users would be affected if Allied were unable to continue to provide services, and local authorities are being forced to find alternatives.
A spokesperson for Wandsworth Borough Council in London told the Wandsworth Guardian newspaper: “There were similar warnings from the regulator earlier this year and so we have been monitoring the situation since then and working closely with the company to ensure that the small number of people in Wandsworth who receive their services continue to receive safe, appropriate and high quality care, and we have contingency arrangements in place if these are required.”
In North Yorkshire, the county council’s director of health and adult services Richard Webb said: “These issues are being detected earlier because of the oversight regime the Government put in place following the Southern Cross care provider failure several years ago.”
Allied is not alone in its financial difficulties. At the end of October, the UK’s biggest care homes operator Four Seasons was put up for sale by its controlling stakeholder, US hedge fund H/2 Capital Partners.
The move followed on from a the group’s owner, private equity body Terra Firma, to repay a scheduled portion of its £500 million debts.
Four Seasons has suggested that any sale would not affected the 17,000 care service users in its 343 homes.
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