AN early warning system to alert patients if their care provider is failing has been revealed today.

As part of the new measures, the Care Quality Commission (CQC) will carry out rigorous checks on the country’s largest and most difficult to replace care companies – including those that provide care at home.

It is hoped the measures, which include financial checks, will protect people if their care provider is failing and safeguard them if the company is in financial trouble.

A Department for Health spokesperson said a care provider in financial trouble can be a predictor of poorer quality care, and identifying these issues at an early stage can help pick up and stamp out quality failures.

The announcement comes just months after scandal-hit Castlebeck Care went into administration, putting more than 900 jobs at risk across the country.

The care provider hit national headlines after 11 members of staff at Winterbourne View, a home in South Gloucestershire, were sentenced for roles in a “gross breach of trust and power” following an undercover expose by the BBC Panorama programme in 2011.

In 2011, Darlington-based care provider, Southern Cross, also announced it was closing the business due to its critical financial situation, leaving its 31,000 mainly elderly patients at risk.

Care and Support Minister, Norman Lamb, said: “Everyone who receives care and support wants to know they will be protected if the company in charge of their care goes bust.

"The fear and upset that the Southern Cross collapse caused to care home residents and families was unacceptable.

"This early warning system will bring reassurance to people in care and will allow action to be taken to ensure care continues if a provider fails."

The new measures will mean the CQC will have the power to demand regular financial and relevant performance information; require the provider to develop and submit a ‘sustainability plan’ to manage any risk to the organisation’s ongoing sustainability; commission an independent business review to help the provider to return to financial stability; and require information from the provider to enable the CQC to support local authorities to manage a provider failure.

The new powers will be set out in forthcoming legislation and will bring care providers in line with other services, such as hospitals and holiday operators, who already have formal methods to monitor a company’s financial situation at a national level to protect its customers.