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Legislation and statutory guidance

The Care Act 2014 sets out the law around market development in adult social care. It enshrines in legislation duties and responsibilities for market-related issues for the Department of Health, CQC and for local authorities.

  • Section 5 - sets out duties on local authorities to facilitate a diverse, sustainable high quality market for their whole local population, including those who pay for their own care, and to promote efficient and effective operation of the entire adult care and support market.

  • section 48 to 56 - ensures that no one goes without care if their provider’s business fails and their services cease. It covers:

    • CQC market oversight

    • local authority duties for ensuring continuity of care in the event of provider failure and service cessation

Responsive and sustainable markets in adult social care 

1. Market shaping

Activity to understand your local market of care providers and stimulate a diverse range of care and support services to ensure that people and their carers have choice over how their needs are met and that they are able to achieve the things that are important to them. It is also about ensuring that the care market as a whole remains vibrant and stable.

2. Market oversight

Local authorities have duties to step in around provider failure. The formal CQC market oversight regime helps local authorities carry out that role in relation to large regulated care providers. The scheme aims to help protect people using care services, their families and carers from the anxiety and distress that may be caused by the failure of a major care provider by monitoring the performance and finances of the most significant difficult to replace social care providers in England and giving Local Authorities an early warning where there is a risk of business failure and a provider is likely to become unable to continue to deliver a service.

Adult social care market roles and responsibilities

At a local level a range of different people and organisations will play a part in the development of an effective care market. The following organisations have specific roles and responsibilities in relation to care market development:

Local authorities (152 upper tier)

  • meet needs of people eligible for care, support them and their carers, and fund care for those people with needs who meet financial eligibility criteria

  • local market shaping to encourage quality, choice and sufficiency of provision

  • local contingency planning in case of provider failures

  • ensure care is maintained where provider fails financially and services cease – for everyone, including self-funders, to ensure people’s needs continue to be met

  • work with NHS to promote integration including integrated commissioning and joined up services

  • at national level, Association of Directors of Adult Social Services (ADASS) has a role in supporting contingency planning for provider failure and collaboration on market shaping regional collaboration (via ADASS) on market shaping



  • commissioning of continuing health care

  • duty to promote integration between the health system and social care

  • local market shaper, for example NHS vanguards and sustainability and transformation plans

  • local partner working with local authorities to help support contingency planning and sustainability of care services

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