Local authorities have three weeks to find alternative providers for thousands of elderly and vulnerable people after a major care services company pulled out of the market.
Allied Healthcare will wind up all its contracts with local authorities by 14 December, the firm said today.
It is closing all its business following a warning by regulators that it was likely to go bust because its bank had failed to agree to continue providing lending facilities.
The company had contracts with 130 councils to provide care for 13,000 mainly elderly people at home throughout the UK.
But after announcing it was pulling out of the market local authorities are now having to find alternative domiciliary care services providers.
The Care Quality Commission said at the beginning of November that Allied Healthcare – owned by a private equity company based in Germany – was 'likely to fail' because it had not secured a lender to support the business after the end of the month.
The company responded that the warning had 'negatively impacted Allied Healthcare' and had 'intensified the impact of the challenging environment within which we operate'.
RBS had agreed to continue its lending facility into the new year, but the bank then said it would only provide the service for three weeks after its contract ended on November 30.