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Applying the regulation

At the point of registration

CQC’s registration application form asks for information about directors, where relevant, for all new relevant applicants who are applying to be registered as a service provider. We require the chair of an applicant to declare that appropriate checks have been undertaken in order to reach a judgement that all directors are deemed to be fit and that none meet any of the unfit criteria. This self-declaration forms part of the application form. CQC does not keep a list of individual directors, as this information is kept on the register of Companies House.

We expect applicants to be able to demonstrate that they have robust recruitment, management appraisal, disciplinary and dismissal processes in place, supported by appropriate policies. When conducting the interview of the nominated individual, CQC’s registration inspector will need to establish the extent to which the applicant understands Regulation 5; what systems and processes are in place to ensure all directors are fit; whether the directors understand their role within the context of this requirement; and whether they are aware of the various guidelines that are available that support best practice.

Where there is a merger or acquisition of providers, we will require the merging or acquiring provider to notify us of a change in director membership. The notification system requires the chair to declare that appropriate checks have been undertaken in reaching a judgement that all directors are considered to be fit and that none meet any of the unfit criteria. If the newly-formed provider is a new legal entity then the above application process will also apply.

Individual providers and partnerships are required to be fit. Bodies are not required to be fit but are required to comply with the FPPR.

The Five-Year Forward View set a clear direction for health and social care services in England to integrate and transform so that they can better meet the needs of people who use them. This has resulted in new models of care, or complex types of provider, with no set organisational forms and a variety of contractual arrangements. For example, when a new care model has multiple service providers working together in a network without a single service provider registration (for example, multiple trusts working together or primary care networks), each service provider is responsible for making sure that its directors meet FPPR.

During an inspection

If a CQC inspector has concerns during an inspection of an adult social care, primary medical, dental care or independent healthcare service, they will need to establish if the concerns relate to a director (individual or collective) and their role in the quality and safety of care. The inspector should assess the concerns and whether they have an impact on the quality and safety of care at the location they are inspecting.

CQC will handle the information in line with our safeguarding or whistleblowing protocols, where relevant. The information received will not form part of the inspection feedback process.

For NHS bodies, as part of the inspection process we will assess and report whether the trust has robust and thorough processes in place for the recruitment, management, discipline and dismissal of its directors.

The assessment will be made as part of the well-led key question at the trust level (KLOE W1: Is there the leadership capacity and capability to deliver high-quality, sustainable care? with the related prompt W1.1: Do leaders have the skills, knowledge, experience and integrity that they need – both when they are appointed and on an ongoing basis?).

Inspection teams should confirm whether the provider has undertaken appropriate appointments of its board directors and has satisfied itself that at appointment, and subsequently, all directors are deemed to be of good character and are not unfit.

This may involve checking:

  • personnel files of recently appointed directors (including internal appointments of existing staff)
  • information or records about appraisal rates for executive and non-executive directors
  • that the provider is aware of the various guidelines on recruiting executives and that they have implemented procedures in line with this best practice.

We will report our findings relating to FPPR within the trust-level well-led sections of the inspection report and evidence appendix.

Responding to concerning information from the public or members of staff

If we receive specific or concerning information outside of registration and inspection processes, such as through our contact centre or our website, we will notify registration and inspection staff. Where necessary, we will handle information in line with our safeguarding and whistleblowing protocols.

The term ‘whistleblower’ may be used to describe people who make a ‘qualifying disclosure’ about a concern at work. Where a worker suffers a detriment or is dismissed as a result, then they may have certain employment protections under the Employment Rights Act 1996 (as amended by the Public Interest Disclosure Act 1998, often referred to as ‘PIDA’). In practice, this is likely to mean that they may be able to claim unfair dismissal at an Employment Tribunal. CQC is one of a number of bodies that a member of staff can make a qualifying disclosure to, but we have no powers under the Public Interest Disclosure Act and cannot advise the member of staff on this or any other legal matter. We cannot intervene, be involved in or advise on any dispute that they might have with their employer resulting from any concern they might wish to raise with CQC, or any underlying or other employment issue. For further support on speaking up please refer to the National Guardian’s Office.

When we receive information about an individual director or a board of directors, we may need to respond by convening a management review meeting (MRM) to determine whether the information indicates a potential FPPR concern.

We will determine whether the information is concerning in the context of what we already know about the provider in respect of the quality and safety of care. If we do not consider the information to be significant, the MRM will conclude that no further action is required.

If the MRM determines that we need to follow up the allegations with the individual and the provider under the FPPR, we will ask the person providing the information for their consent to share this, and will try to protect their anonymity if possible. In some exceptional cases, we will need to progress without consent when we are concerned about the potential risk to people using services. We will also inform the director to whom the case refers, but we will not ask for their consent and will not disclose the identity of the person who provided the information to us.

CQC makes no judgement about the information, or the fitness of the director. Once we have obtained consent, if applicable, we will send the information of concern regarding the fitness of a director to the provider. We will ask them to respond within 10 days and tell us about the action they intend to take. The provider’s response will need to satisfy us that it has followed a robust process to ensure that the person in question is fit and proper for their role. If appropriate, we will also need to see evidence of any action they intend to take and the outcome of that action.

Once we have received a response from the provider, the MRM will re-convene. Depending on the response received from the provider, the MRM may find that either:

  • The process that the provider has followed is robust and thorough and it has come to a reasonable conclusion.
  • The process is not robust and therefore there is no assurance about the decision reached. Where the MRM finds that the provider’s processes are not robust, or they have made an unreasonable decision, the MRM may request further dialogue with the provider, schedule a focused inspection or, if we have established that there is a clear breach of the regulation, we will take regulatory action in line with our current enforcement policy and decision tree.

During the process, we will not publicly release the names of individual directors under consideration and we will take appropriate steps to avoid identifying them.

We will expect providers to follow the procedure set out below when they receive information or an allegation that a director is not of good character.

The investigation stage

There may be occasions where there is a dispute about the relevant facts, with different accounts given by different people. The provider needs to conduct a sufficiently thorough investigation before reaching a decision as to whether any relevant facts can be established or not (this should take into account people who have spoken up). The provider should consider facts to be proved if, after a reasonable investigation, it considers that it can decide that it is more likely than not that the fact is proved. When undertaking this investigatory process, providers should ensure that they follow their own HR policies (including those governing disciplinary proceedings).

In some cases, the role performed by a director within the organisation may mean that it is appropriate to use an external decision maker either to undertake an impartial investigation to establish the primary facts or to carry out an impartial assessment as to whether the director comes within one of the categories in Regulation 5(3). The identity of the external decision maker should be carefully considered and their independence should be specifically assured.

If the concerns are about the director’s conduct while with another employer, the provider will need to make sufficient attempts to obtain the relevant information from the previous employer(s) and others to establish the primary facts as clearly as is reasonably possible. Furthermore, unless there are very special circumstances, all information gained regarding the director should be shared with the director concerned so they have an opportunity to comment on it before a decision is made about the primary facts of the incident(s).

However, documentary evidence is not necessary before a ‘fact’ can be established. If the provider receives evidence from someone who saw or heard relevant matters, this can be evidence to support a factual conclusion even if no contemporaneous record was made of the incident. Hearsay evidence can be relevant, but providers should be cautious before making decisions solely based on hearsay evidence and should consider carefully what weight to give to such evidence where there is a conflict of evidence.

The assessment stage

Once a provider has established the primary facts, it will need to decide whether those facts bring the director within any of the categories set out in Regulation 5(3) of the 2014 Regulations.

If the provider concludes that the primary facts do bring the director within Regulation 5(3), the director must be relieved of his or her directorial responsibilities. If the primary facts do not bring the director within Regulation 5(3), the provider is not required to relieve the director of their directorial responsibilities (although the facts as found by the investigation may still lead the provider to take any other form of disciplinary action or recommend further training or support for the director).

How CQC responds to unanticipated failure of a provider

Where there is a serious failure of the quality and safety of a provider’s care, we will carry out a focused inspection that includes an assessment of the FPPR aspects concerning recruitment and management of directors.

We will use the evidence of this inspection to inform our judgements about Regulation 5 and any breaches that may have taken place.

Where appropriate, we will work with other regulators to ensure that regulatory activity is used proportionately, and with bodies that regulate professionals, as required, to safeguard the public.

Last updated:
25 January 2018

 


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