A lot has been said recently about the woes of Allied Healthcare, with the domiciliary care provider deciding to pursue a Company Voluntary Arrangement with its creditors. But what does this mean for other providers operating in these same conditions? And should more local authorities be digging deeper into their own supplier bases to pre-empt similar issues?
By scratching beneath the surface of the higher profile suppliers, a hidden layer of (often smaller) providers is revealed who may well be very sympathetic towards Allied’s situation. Take the East Midlands for example, where the two charts below show the recent decline in local authority spend on home care services for the elderly together with the array of private sector providers currently operating in the region:
Back in 2014, a CQC report titled ‘The Stability of the Care Market and Market Oversight in England’ stated that “whilst it is not the job of the regulators to spot financial winners and losers, there is a need to maintain a wider oversight of shifts and trends in the sector and the implications this may have for the likelihood of any one provider failing”. Hindsight is of course a wonderful thing, but perhaps local authorities should be heeding the CQC report’s warning that, given the ownership models of many providers, “simply relying on formal published financial metrics is not the same as capturing market intelligence”.
Unfortunately it is already too late for one council, with a recent press report revealing how an estimated £3M lead provider contract was awarded to Allied Healthcare just 11 days before the company’s recent announcement. With said council now “scrambling to put contingency plans in place”, perhaps it is time for local authorities to take the initiative and save themselves the headaches and commercial risk associated with failing suppliers.
Here at Porge we add up and categorise the invoices paid by over 1000 public sector bodies - including the NHS Trusts and the CCGs. Our database includes over 90 million categorised invoices. So if you need to know what’s really happening in the public sector, talk to us about our fact based Public Sector Market Insight Services.