Helping you understand Welsh law

Provider failure

Section 189 of the Social Services and Well-being (Wales) Act 2014 imposes a new duty on a local authority in Wales to take action in the event a “service provider” registered to provide a regulated service under the Regulation and Inspection of Social Care (Wales) Act 2016 becomes unable to provide a service because of business failure.  

In such circumstances, the local authority must, for so long as it considers necessary, meet the needs of the adults for whom the registered person was providing accommodation or services.

Part 1 of the Care Act 2014 also places a temporary duty on a local authority in Wales to take action to meet adults' needs for care and support (or support) in the event that a registered person becomes unable to provide accommodation or other services as a result of business failure, where those adults have been placed in the area of a Welsh local authority by:

a) a local authority in England;

b) a local authority in Scotland;

c) a Health and Social Care Trust in Northern Ireland.

Accordingly, local authorities in Wales will be placed under the same temporary duty in respect of persons within their area who are in accommodation or receiving services arranged by (or as a result of a direct payment provided by) local authorities in England or Scotland or by a Health and Social Care Trust in Northern Ireland.

The temporary duties imposed in the event of a business failure by this Act (and by the Care Act 2014) only apply in relation to services or accommodation provided for adults. A number of statutory safeguards are already in existence in the event of the failure of a provider which is meeting a child's needs for care and support (or support) by providing services or accommodation (for example provision is made under the Children Act 1989 and in secondary legislation which sets out the requirements for continuity in the provision of care and care settings).

The Welsh Ministers are required to make regulations to specify what is meant by “business failure” and “being unable to do something because of business failure”.

See The Care and Support (Business Failure) (Wales) Regulations 2015

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