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Health and Social Care Bill

Clause 37 deals with what happens should an individual or company that is registered with the commission as a service provider become insolvent. It requires that, if a registered individual becomes bankrupt, the trustee of the bankruptcy must notify the commission of their appointment and may be required to appoint a registered manager to ensure that the regulated activity continues to be provided in line with the relevant requirements. Amendment No. 66A, as the noble Baroness outlined, proposes that similar provision is made in relation to the licensed insolvency practitioners who administer individual voluntary arrangements. I agree with the noble Baroness that the commission would need to be notified that a registered individual might need to enter into an individual voluntary arrangement, as the health, safety and welfare of people receiving those services could be put at risk. However, I am not sure that Clause 37 is the best place to make provision for this. Individual voluntary arrangements are a means by which people who can no longer afford the repayments on a debt can arrange a refinancing package with their creditors. Such agreements can draw assets, such as the value of any share a person may have in a property or business. However, the supervisor does not take control of the individual’s business, as would be the case were they to declare themselves bankrupt. They would simply be acting as an intermediary between the individual and their creditors. In most of these cases, the individual would continue trading, so could remain registered, or could choose to cease trading and cancel their registration in the normal manner. Were their financial situation to worsen and they declared themselves bankrupt, the existing provision in Clause 37 would have effect. I do not therefore believe that an amendment to Clause 37 is necessary. However, I hope I can reassure the noble Baroness that the Bill already allows for provision to be made to ensure that the commission will be aware if there is a danger of a registered individual becoming insolvent. Clause 16 also allows for regulations to include requirements as to the financial position of a person registered as a service provider. These do not form part of the current consultation but will be covered by a consultation later this year. However, regulations currently in force under the Care Standards Act, on which the new ones will be based, cover matters such as financial viability and agreements with creditors. In particular, existing regulations include requirements for current bodies to be informed if a service provider is likely to become insolvent in the next six months. We envisage making similar provision under Clause 13. This addresses the intention behind Amendment No. 66A. Amendment No. 66B would enable people appointed under Clause 37 to act as the registered service provider for a specified period. Clearly, as long as the business remains operational, it will be important that services are overseen by someone with the appropriate skills to ensure that safety and quality requirements are adhered to. Clause 37 already allows for the person who takes control of the business to be required to appoint a suitable manager to ensure that this happens. However, it would not be appropriate to expect someone who is stepping in to arrange the financial wind-down of the business to accept responsibility for the safety and quality of service it provides, even on a temporary basis. As I have already said, in the case of individual voluntary arrangements, the insolvency practitioner does not assume control of the business anyway. Nor would it be appropriate for the official receiver, as an officer of the court and a member of the Insolvency Service, who would be the trustee or liquidator of last resort in bankruptcy and court winding-up cases, to be asked to register. I hope that I have been able to explain how the Bill deals with these issues and that the noble Baroness will feel able to withdraw the amendment.