Provider failure occurs when a provider is no longer able to exercise its normal day-to-day duties, due to a specific set of circumstances, such as:
The Care Act places a duty on local authorities to contingency plan for such eventualities in advance of them occurring. When provider failure occurs local authorities have a temporary duty to ensure Eligible Needs are met (this duty does not apply where an administrator, or another person, continues to run the service). The duty on local authorities applies irrespective of whether or not the authority has contracts with that provider, and irrespective of whether the people affected are self-funders. The duty is to ensure needs are met which might range from providing information on alternative providers to arranging care and support itself.
Where a person’s needs have not been previously assessed local authorities have powers to meet perceived needs that appear urgent. The only circumstances where the Local Authority has no duty is when the failed provider’s clientele consists solely of people in receipt of NHS Continuing Healthcare - in this situation the duty to meet needs falls on the NHS.