The content of notes 1 to 3 are subject to audit.
1. Regularity of expenditure
Losses and special payments are items that Parliament would not have contemplated when it agreed funding or passed legislation. By their nature, they are items that ideally should not arise and should only be accepted if there is no feasible alternative. They are therefore subject to special control procedures compared with the generality of payments.
1.1 Losses
| 2019/20 | 2018/19 | |
|---|---|---|
| Total number of losses | 675 | 984 |
| Total value of losses (£000) | 1,152 | 1,923 |
CQC incurred one loss that exceeded £300k during the year (2018/19: one case totalling £881k). This case relates to liabilities arising from a HMRC compliance check covering a period of four years and includes the social security costs relating to the benefits arising through the use of hire cars (£351k).
1.2 Special payments
| 2019/20 | 2018/19 | |
|---|---|---|
| Total number of special payments | 5 | 2 |
| Total value of special payments (£000) | 32 | 33 |
1.3 Gifts
During 2019/20 CQC made no gifts (2018/19: none).
2. Remote contingent liabilities
There were no remote contingent liabilities as at 31 March 2020 (31 March 2019: none).
3. Fees and charges
Fees are charged in accordance with section 85 of the Health and Social Care Act 2008 to cover the cost of our regulatory functions. This includes initial registration, changes to registration and our activities associated with monitoring, inspection and rating registered providers. Other existing responsibilities, such as our work under the Mental Health Act, are funded by grant-in-aid from DHSC.
Registered providers are charged an annual fee based on the type and scale of services provided. The fees scheme, effective from 1 April 2019, reflected the final year of our four-year trajectory to full chargeable cost recovery for community social care providers and ensured that the cost of regulation and fees recovered were properly aligned for dental and residential social care providers. See www.cqc.org.uk/guidance-providers/fees/fees for further details.
The following table provides an analysis of the income and costs associated with our regulatory activities for which a fee is charged, see notes to the financial statements (note 2.3) for further details.
| Income £000 | (204,022) |
|---|---|
| Full cost £000 | 199,125 |
| Surplus £000 | (4,897) |
Full chargeable cost of £199,125k excludes non-cash items totalling £3,065k from the total expenditure relating to chargeable activities presented in note 2.3 in the notes to the Financial Statements. This consists of the provision for pension fund deficits £771k, net interest on pension scheme assets and liabilities £1,403k, expected credit loss £801k, provision expenses (£1k), finance expenses £14k and apprenticeship training grant expense £77k all of which are covered by non-cash budgets.
There will always be variation when aligning costs for chargeable activity to our fee income on an annual basis, in 2019-20 this represents a 2.4% surplus. Full cost is lower than anticipated, which is driven by planned expenditure on our change programme moving into 2020/21.
4. Better payment practice code
In accordance with the governments prompt payment policy CQC aims to pay 90% of undisputed and valid invoices within 5 working days and 100% of all undisputed and valid invoices within 30 days.
| Target | 2019/20 | 2018/19 | |
|---|---|---|---|
| Number of invoices paid within five working days | 90.0% | 77.1% | 86.6% |
| Value of invoices paid within five working days | 90.0% | 72.7% | 95.4% |
| Number of invoices paid within 30 days | 100.0% | 98.1% | 99.4% |
| Value of invoices paid within 30 days | 100.0% | 99.3% | 99.8% |
We are currently undertaking a QI Gold ‘Purchase to Pay’ project, which focuses on improving performance against these targets.
Ian Trenholm
Chief Executive,
Care Quality Commission
26 January 2021