There was an irony to the government's publication of its Open Public Services white paper this week. As Prime Minister David Cameron spoke about the paper, which paves the way for greater private sector involvement in public services, care home provider Southern Cross said that it was transferring control of its 750 care homes to others and would be wound up. Not the greatest advert for private sector involvement in social care.

There was nothing of great surprise in the white paper - held up since February due to internal governmental wrangling - and little in it is new. It includes outlines for the expansion of personal budgets, a move to give people a "right to choose" their services and plans to consult over giving greater opportunities for communities to run services at a hyper-local level. But one of the biggest proposals is to outsource more services to the private sector, charities and John Lewis-style mutuals, although no one sector would be favoured over any other. This is an extension of what has been happening for years.

Councils have long commissioned services from outside providers, and the more recent advent of the personalisation agenda and individual budgets has given people the chance to buy services from any provider they choose. This move just gives the private sector and charities a better footing to compete. But my worry about the way that social care services may be opened up to more competition is that it will increase the risk of service failure - and that the government may no longer be obliged to step in to prop them up.

According to the Guardian, research by civil servants warns that although markets are susceptible to failure, costs could in fact rise unless a true market is created in which some public services are allowed to collapse if they are unsuccessful.

In the Southern Cross case, residents have all been assured that they will not become homeless - there has been time for the company to make arrangements with its landlords to take over the running of  some of the homes - although there remains concern that some residents may eventually have to move to other homes. But even this might not be the case in other businesses, and there is the risk that care home residents could find themselves homeless with little notice to find somewhere else. That's assuming somewhere else is available.

Of course, this could be disastrous for the service users involved. To be uprooted from their home for reasons they may not understand and moved to somewhere else, away from what and who they know could severely impact on their health, wellbeing and independence. There is also the worry that profit will take priority over quality of care - although the government maintains that competition will drive up standards.

Dave Prentice, leader of the trade union Unison, has warned of a "race to the bottom" with workers pay and conditions cut to ensure that services appear more attractive to private buyers. While the regulator, the Care Quality Commission, will be there to ensure that minimum standards are maintained, the recent case of Winterbourne View in Bristol, where staff allegedly abused residents with learning disabilities, has cast doubt over its effectiveness.

Nevertheless, this white paper signals the government's direction of travel, and that - and the existing predominance of the private and third sector as providers - renders wholesale arguments about whether the private sector has a place in social care moot. The private sector is here to stay. But the government has to have safeguards in place to ensure that if businesses go bust, the most important people in the system - that's service users, not shareholders - do not suffer as a consequence.

If anything is to be learned from the Southern Cross case it is that service users' needs have to come first and that contingencies must be in place if a business goes bust.

The full Open Public Services white paper can be found here.