Allied Healthcare, which cares for 13,500 elderly and vulnerable patients across the UK, and employs 8,500 people, is looking to propose a company voluntary arrangement in a bid to protect it from collapse. This comes after the Care Quality Commission issued a notice to councils that the chance of failure is high.
But the CQC has now said the company had only be able to confirm it had funding in place until 30th November.
"As with many independent providers in the UK health and social care sector, Allied Healthcare has been operating in a highly challenging environment for a sustained period of time, which has placed pressure on the company," a company spokesperson said.
It looks as if the main creditor here will be HMRC. Last year, HMRC ruled carers sleeping overnight should be paid the national minimum wage for all hours, as opposed to a flat rate, and that social care providers will be required to make back-dated payments for these stays. It is understood Allied's bill could amount to £11m.
Changes to the Care Act, which came into effect in 2015, means that if a provider like Allied were to stop trading, local authorities would step in to protect individuals receiving care.
The Local Government Association, which represents local authorities, said it was working alongside the Care Quality Commission and government to support Allied where possible.
An LGA spokesman said: "The absolute priority for councils affected is to protect the vital care and support that older and disabled people rely on and ensure it is able to continue without interruption.
"Councils have robust contingency plans in place to manage the care of individuals if necessary."