A significant gap exists in procedures for monitoring the financial viability of firms that provide care for elderly people, CIPFA has warned the Scottish Parliament.
The warning is included in a submission to an inquiry into the regulation of care services by the parliament’s health and sport committee. This inquiry comes after Britain’s biggest care homes operator, Southern Cross, went into administration, casting uncertainty over the futures of 31,000 vulnerable residents, at least a tenth of them in Scotland.
CIPFA says that the current regulatory regime, conducted under the auspices of Social Care and Social Work Improvement Scotland (SCSWIS), requires financial assessment of providers at just two points in the process: by SCSWIS when firms register as providers; and by local authorities when they contract to provide care.
But neither financial snapshot is followed through by continued systematic monitoring, CIPFA says. SCSWIS continues to monitor quality of care, but not financial stability, and ‘there is no prescribed requirement for subsequent ongoing financial health assessment by local authorities’.
‘Without ongoing financial assessment, the risk is that any financial assessment is only valid at the time at which it is conducted,’ the CIPFA submission warns. ‘Any subsequent deterioration in the financial position will not be detected until, at worst, the point of business failure.’
The Holyrood inquiry deals only with circumstances north of the border, but the CIPFA paper identifies similar gaps in the financial monitoring regimes in England, under the Care Quality Commission, and in Wales, where regulation falls to the Care and Social Services Inspectorate,
CIPFA says of the English position: ‘As in Scotland, there is no ongoing assessment of financial stability by the regulator. Our understanding is that formal interest by the regulator will only become apparent at the point of business failure.’
It calls on the Holyrood committee to extend its inquiry’s scope to look specifically at the ‘key area’ of monitoring financial stability.
The inquiry’s remit is primarily concerned with investigating whether the regulatory system is sufficiently robust in picking up poor quality care, and whether it will remain fit for purpose as a regulator, inspector and enforcer after the integration of social and health care provision in the community.
