Agenda Item:

Paper No: CM0*/11//**

MEETING: / BOARD MEETING
DATE: / 18 SEPTEMBER 2013
TITLE OF PAPER: / IMPLICATIONS OF THE CARE BILL FOR CQC’S POWERS AND FUNCTIONS
SUMMARY:
This paper outlines the provisions of the Care Bill and the implications it will have for CQC’s functions and powers.
RECOMMENDED ACTION:
The Board is asked to NOTE the content of this paper.
Executive Decision/
Board for information / Executive and Board decision / Executive and Board shared decision / Executive and Board discussion/Board decision
The Executive Team has made a decision and the Board has been informed / The Board has been consulted in order for the Executive Team to make a decision / This is a shared decision between the Executive Team and Board / This is for when it is clear that it is a specific Board decision (under statutory and legal requirements) ie. signing off the annual accounts
* Check box as required
LEAD DIRECTOR: / David Behan
AUTHOR: / Molly Corner, Government Relations Lead, and Alex Baylis, Head of Better Regulation
DIRECTORATE / Strategy and Intelligence
DATE: / 30 August 2013
SUPPORTING
PAPERS: / Annex A –timeline for progress of the Bill

GOVERNANCE

AUDIT TRAIL: / This paper was presented to the Executive Team on 28 August.
LINK TO STRATEGIC OBJECTIVES AND BUSINESS PLAN / The content of the paper links directly to the strategy. The Care Bill sets out the legislative framework which allows for the changes to be made to the way in which we regulate providers, including the reintroduction of performance ratings.
IMPLICATIONS FOR NCSC / There is no direct impact for the NCSC.
FINANCIAL IMPACT: / There are no direct financial implications of this paper.
RISK IMPACT: / The legislation outlined in this paper is currently in the process of parliamentary procedure. There are risks that amendments to the legislation will be introduced which could have an impact on CQC’s regulatory activities and functions.
REPUTATION IMPACT:
LEGAL IMPLICATIONS: / The paper lays out the legislative basis for the changes to how we regulate and implement the strategy.
HEALTHWATCH IMPACT: / There are no implications for Healthwatch England.
EQUALITY IMPACT
ASSESSMENT: / No impact assessment has been carried out.

1. Background

The Care Bill was initially published as the Draft Care and Support Bill in 2012. Since then it has been scrutinised by a Draft Bill Committee and has been publicly consulted on. It was introduced into the House of Lords in May 2013 as a mechanism for bringing together and updating legislation around social care funding, eligibility and other issues.

The Bill has completed the Committee stage in the House of Lords and will enter reporting stage in October 2013. It is anticipated that the Bill will gain Royal Assent before the end of the financial year.

The Bill makes provision for a range of changes to the legislation around social care as well as introducing some changes for the regulation of health and social care providers.

In addition to the Bill, the other key legislative change on the horizon is new regulations that will be laid later this year under the Health and Social Care Act 2008. Those regulations are the subject of a separate Board paper and are not considered here.

  1. Executive Summary

CQC’s current powers and responsibilities are set out in the Health and Social Care Act 2008 (2008 Act) and were amended by the Health and Social Care Act 2012 (2012 Act). The Care Bill 2013 (the Bill) sets out some additional responsibilities and powers, further amending some of the provisions of the 2012 Act.

The main provisions of the Bill are:

  • Clarification of the general responsibilities of local authorities in relation to adult social care, following the journey of a person through the care and support system
  • Payment for care, including personal budgets, direct payments, deferred payments and a payment cap
  • Introduction of statutory safeguarding adults responsibilities for local authorities
  • Provider failure and market oversight in social care
  • Changes to Warning Notices for NHS providers and introduction of a statutory imposition of licence conditions; and the introduction of the Trust Special Administration regime on grounds of failure in quality
  • Restrictions on applications for variation to or removal of conditions to a provider’s registration where CQC is already taking action to effect the same change
  • Introduction of a Unitary Board for CQC
  • Reintroduction of reviews and performance assessments for providers, leading to a rating
  • Introduction of an offence of publishing or providing false or misleading information
  • Legislation to create Health Education England and the Health Research Authority as statutory bodies.

We understand that it is intended that there will be further amendments to the Bill as it enters the Commons to include provisions for the Government’s response to the Francis Inquiry and the additional reviews it has subsequently set up, including the Berwick report, the Clwyd review of complaints, and the Farrar review of data and information burden where this is appropriate. We anticipate that there will be implications for CQC in some of the recommendations and responses to these reports.

The earliest that provisions in the Bill could come into effect is April 2014.

  1. Implications for CQC

The main implications for CQC are those relating to warning notices and the failure regime, reintroduction of ratings, market oversight in social care, and changes to a provider’s ability to apply for changes to their registration status once enforcement proceedings have commenced.

Social care market

The Bill introduces a duty on local authorities to promote a diverse and high quality market of care and support services for people in their local area. In particular, local authorities must act with a view to ensuring that there is a range of different services and providers to choose from. Factors local authorities must consider include the importance of sustainability of the market and supporting continuous improvement in the quality of services; making available information about the services available to people in their area; the current and future demand for services in their area, and how this demand can be met by providers; and the importance of carers and service users being able to undertake work, education and training. In the event of the failure of a provider, local authorities will have a duty to ensure adults’ needs for care and support continue to be met when service providers regulated by CQC fail – this is in terms of failure on quality or financial grounds, and applies equally to those who pay for their own care and those whose care is paid for by the local authority. Local authorities therefore have a market oversight role within their individual areas, but these arrangements do not enable oversight of providers who cross multiple local authority areas.

Market oversight

The Bill sets out the procedures for identifying those providers who are most difficult to replace and will therefore be subject to central oversight by CQC. Regulations will set out the criteria for entry into the central oversight regime which could include characteristics such as national coverage, concentration in a particular geographical area or areas, and level of specialism. It will be CQC’s responsibility to identify which providers satisfy the criteria for entry into the oversight regime and to inform them that they are subject to the regime.

CQC’s duties in the oversight regime will be to:

  • Assess the financial sustainability of those providers subject to the regime to identify any threats to their financial sustainability
  • Ask the provider to develop a plan to mitigate or eliminate the risk where it is concerned about a provider’s sustainability
  • Arrange, or require the provider to arrange, for a person with appropriate expertise to carry out an independent review of the business
  • Inform the relevant local authorities where a registered provider is likely to become unable to continue to carry on providing a regulated activity or activities.

This regime will be treated as a regulatory function of CQC, and there will be provision to impose conditions on a provider’s registration as a result of this regime.

This is an entirely new function for CQC and it is not one which is currently carried out in this sector. Given the need for regulations as well as royal assent to the Bill, these powers cannot take effect until April 2015 at the earliest.

Warning notices and failure regime in NHS providers

CQC will no longer be able to issue warning notices under s29 of the 2008 Act to NHS trusts or foundation trusts. Instead, a new form of warning notice will be introduced for these providers;it will be the first step towards the failure regime, and applies where CQC determines that “significant improvement” is required. It will be for CQC’s enforcement policy to define “significant improvement”. At the end of the time period specified in a warning notice, CQC must review whether the requirements have been met. Where CQC deems they have not been met, we must review what, if any, further action should be taken. This can include asking Monitor or the Trust Development Authority to implement the failure regime as a result of failure on quality grounds. The Bill does not remove any of CQC’s enforcement powers other than the existing form of warning notice for the NHS, but Patients First and Foremost signalled the intention that we would choose only to use our urgent powers where people are at direct risk of harm, with an agreement with Monitor, TDA and NHS England that they would act in all other cases.

Trust Special Administrator

CQC may require Monitor to make an order to appoint a Trust Special Administrator where it has serious concerns. CQC must consult a range of listed bodies including the Secretary of State, Monitor, NHS England and the local CCG before making the order. Although it is not set out in legislation,Patients First and Foremost signalled that the same would apply with the TDA for NHS trusts. TDA’s powers are set in a ministerial direction, as it is not a statutory body and so does not require legislation to effect the same change.

The Trust Special Administrator must consult CQC before sharing its draft report with Monitor, and CQC must provide a statement that the part of the objective relating to quality of services has been met. The intention is to ensure CQC is satisfied that any services which are to be continued to be provided will be of sufficient safety and quality.

Care Quality Commission

The Bill introduces a change to the process by which registered providers can apply for variations to their registration after a Notice of Proposal or Notice of Decision has been issued which would vary their registration in the same way. This closes a loophole whereby it is possible for a provider to appeal when we seek to cancel their registration, and then voluntarily cancel their registration while the appeal is on-going, which has the effect of preventing the public or commissioners from ever knowing that we sought to cancel it.[CQC’s enforcement powers are set out in the 2008 Act, and require time in the process to allow a provider to make representations or appeals to tribunal. This can mean it takes more time to go through this route than it takes for a provider to cancel their own registration. The intention of this amendment is to ensure that CQC is able to take appropriate and relevant enforcement action against a provider.]

Additionally, the Bill sets out provision for a Unitary Board for CQC. Regulations are to be laid before Parliament in September which will increase the maximum size of the Board to ensure that all three Chief Inspectors are able to become executive members of the Board, in addition to the Chief Executive, the Executive Director of Strategy and Intelligence and the Executive Director of Corporate Services. The Secretary of State will continue to appoint the Chair and the non-executive directors; CQC will appoint its own executive directors.

Reviews and Performance assessments

The Bill introduces a clause to replace s46 of the 2008 Act, which was repealed in the 2012 Act. CQC will have a duty to review the ‘carrying on of the regulated activities by service providers’, assess the performance of providers after such reviews and publish a report. In short, this is the legislation which will allow CQC toconduct periodic reviews of providers and publish a rating of their performance. Regulations will be laid to prescribe which providers this clause applies to. This is different to the original clause in the 2008 Act which limited ratings to NHS-funded care and social care. We are separately asking DH to extend fee-setting powers in regulations to cover this function, so that there are no grounds for confusion if we combine both ratings and inspection in one process.

In all cases, CQC will be able to devise its own indicators of quality, and must prepare a statement setting out the frequency with which these reviews are to be carried out and the period to which they relate, and describe the method that it proposes to use in assessing and evaluating the performance of a registered service. The indicators used may be different in different cases (which allows for different sets of standards for the different sectors we regulate), and all must be published. CQC must consult on its proposals for the performance assessment methodology, but Government approval will not be required.

The remainder of the provisions of the Bill do not have any direct implications for CQC, save for provisions giving both Health Education England and the Health Research Authority a statutory duty of cooperation with CQC.

False or Misleading Information

In addition, the Bill provides for a new offence for care providers who supply, publish or otherwise make available information that is false or misleading, with associated criminal sanctions. The offence applies to a care provider as a corporate body, not to individual directors or employees. This offence will relate only to information that care providers are legally obliged to supply, either by a statutory provision or by another legal requirement such as a contractual requirement. It is envisaged that the offence will typically apply in cases involving the supply of information to the Secretary of State, the Health and Social Care Information Centre, regulators and commissioners, in accordance with those persons’ and bodies’ statutory powers to require information.

The Bill provides a defence for care providers that can demonstrate that they "took all reasonable steps and exercised all due diligence". The offence is not aimed at omissions in providing information. However, clause 84(9) indicates that if a care provider commits an offence, the provision of this false or misleading information will not constitute an offence under s64 of the Health and Social Care Act 2008. In terms of addressing the omission of information, CQC’s current thinking is that the solution lies in better relationship management, rather than legislation. For example, providing more guidance for both staff and providers on what information sharing is expected and how appropriate boundaries should be maintained.

In addition, the new duty of candour that will be introduced through regulation is expected to require providers to be open about all instances of harm, with our guidance clarifying proportionate expectations on this. There will be two main elements: what systems and arrangements a provider puts in place to ensure openness, and how we respond when we come across cases where a provider willfully was not open. It will apply to providers rather than individuals.

The penalties applicable when a court decides that a care provider has committed an offence of false or misleading information will include the imposition of a remedial or publicity order, as well as, or instead of, a fine. The offence will apply to public bodies that provide health services or adult social care services in England as well as to providers who provide these services on behalf of a public body, such as independent providers of hospital services and independent care homes. However, the intention is to specify through regulations an initial focus on providers of secondary care.

Other issues

Related to the Bill is the introduction of a Fit and Proper Person’s Test, which is currently subject to consultation by the Department of Health. The consultation proposes that CQC registration requirements are amended to place a clear duty on service providers to make sure that all directors who are appointed to the Boards of any health or care organisation regulated by CQC are suitable for the job. CQC’s current thinking is that, underpinned by the relevant regulations, we would expect providers to make a declaration at registration that they have carried out the appropriate and relevant reviews of directors and that they are satisfied through due diligence about the fitness of the individuals. We are looking to work closely with Department of Health to draft the regulations ahead of them being consulted on more widely later in 2013.