Health and Social Care Act 2008 (Regulated Activities) (Amendment) Regulations 2012

Tuesday 22nd May 2012 Grand Committee

Considered in Grand Committee

17:26

Moved By

[Earl Howe]

That the Grand Committee do report to the House that it has considered the Health and Social Care Act 2008 (Regulated Activities) (Amendment) Regulations 2012.

Relevant documents: 44th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, the regulations that are before us today make a number of changes to the registration system for providers of health and adult social care services operated by the Care Quality Commission.

The changes that we are proposing fall into three broad categories. First, they make some changes to the extent of registration, removing some providers from registration where the risk to service users does not justify regulation by the commission, or there is little or no potential for regulation by the commission to mitigate these risks. Secondly, they make some slight technical amendments to the regulations; and thirdly, they make some clarifications to the regulations. I shall say more about the purpose of the instrument a little later, but I would like to reflect on the progress that the commission has made since it was set up three years ago.

As the independent regulator of health and adult social care services in England, the commission plays a key role in providing assurance that patients and service users receive the standards of care that they have a right to expect. All providers of “regulated activities” in England, regardless of whether they are public, private or voluntary sector organisations, are required to register with the commission. Providing a regulated activity without being registered is an offence.

In order to be registered, providers have to comply with a set of registration requirements that set the essential levels of quality and safety. Where providers do not meet these essential levels, the commission has a range of enforcement powers that it can use to protect patients and service users from unsafe care. This includes, in the most extreme cases of poor care, closing down services. The commission has registered around 22,000 providers in a number of waves. The final round will be the registration of 8,000 providers of NHS primary medical services in April 2013.

During the passage of the Health and Social Care Act 2012, we made it clear that we would strengthen the role of the commission. As our reforms to health and social care services are implemented, the commission’s focus will remain on its core function of registering providers against the essential levels of safety and quality, and taking action against those providers that do not meet these standards.

The commission has taken on a challenging workload in bringing a large number of new providers into a new registration system in a short period of time, and in merging the work of three former regulators. I believe that it should be commended on the progress that it has made. The early years of the commission’s operation have been comprehensively reviewed over the last year. This has included reviews by the Public Accounts Committee, the Health Select Committee and the performance and capability review undertaken by my own department.

The regulations before us now were consulted on and drafted before the findings of those reviews were available. I assure the Committee that my department will consider whether further changes to the regulations that underpin the registration system are required in the light of these several reports. We are now commencing a further review of the regulations and aim to consult on any further changes, if they are needed, at the end of the year.

17:30

Next, I should like to outline briefly the effect of the regulations before the Committee. Our aim in reviewing the regulations has been to adhere to the original principles underpinning the registration system. These are that there is a fair playing field, regardless of the type of provider; that the requirement to register with the commission is based on the risk to people who use services and the extent to which regulation can mitigate that risk; and that all types of providers must meet the same registration requirements.

In the autumn of 2011 we consulted on a number of proposals to changes to the regulations underpinning the registration system. The proposals that we put forward were not designed to remove the safeguards provided by the registration or to dilute the impact of registration. Rather, they were designed to ensure that the registration system was focused on the right places and was addressing areas where services posed a risk to patients and service users that could be mitigated by registration with the CQC. In addition, we identified anomalies and inconsistencies in the regulations. In the light of the consultation, we made some changes to the proposals and decided that others required further consideration before we could proceed. For example, the regulation of personal care away from home will now be taken forward in the next stage of our review of the regulations.

One of the key changes to the regulations, and the one that is most pressing, is to put in place an exemption from registration for activities provided on a temporary basis solely in relation to the Olympic or Paralympic Games. The short-term nature of these services, combined with the security arrangements around the Games, mean that the potential benefits of registration are limited. Other changes made by these regulations relate to partnerships and diagnostics, both of which reduce the burden of regulation in these areas.

On partnerships, we are changing the fitness requirements so that the necessary qualifications and experience are held by the partnership as a collective body, rather than having to be held by each partner as an individual. This recognises the fact that some partners may have little or no involvement in the day-to-day running of the regulated activity, and that requiring these skills and qualifications on an individual basis is not necessary to provide protection for patients and service users.

The final change that I should like to mention in some detail relates to the regulated activity of diagnostic and screening procedures. Our review identified a number of relatively low-risk diagnostic procedures that would currently require registration but where this is not justified by the risk to patients. As a result, we are amending the regulations so that these lower-risk diagnostic procedures—for example, the taking of urine samples without further action attached—do not of themselves require registration with the commission. Providers of other, higher-risk diagnostic procedures will still be required to register with the commission.

Other changes relate to the definition of medical devices, arrangements for securing consent where patients are not themselves able to give consent, and a change to clarify the defence that is available to providers against the offence of failing to meet the registration requirements.

In addition, there are changes to the scope of the activities which require registration. Personal care, where it is arranged by a parent, carer or trust, will no longer require registration with the commission; nor will the activities of second-opinion appointed doctors working under the Mental Health Act. Suppliers of blood-related products where there is no contact with patients or donors will no longer require registration; nor will the providers of ambulance services where these operate only within the confines of a cultural or sporting event. Providers of air ambulances will also not be required to register where they are registered with the Civil Aviation Authority and they do not provide the treatment component. In a single case, the scope of registration is being extended to include sterilisation and sterilisation reversal in the surgical procedures regulated activity.

Finally, we are amending the exemption that applies to some private practice of medical practitioners. In future, this will apply wherever a medical practitioner is employed by a registered provider and they are either on the performers list of a designated body for professional appraisal or employed by a designated body.

The overall impact of the changes that we are making is deregulatory, removing from registration with the commission some activities where the burden of registration is not justified and, at the same time, freeing up the commission’s resources to focus on those higher-risk activities where regulation is justified. Our assessment of the impact of the changes is that they will deliver a net benefit of more than £100 million over 10 years.

These changes to the registration regulations ensure that the Care Quality Commission can operate a system of regulation that is focused on addressing the risks associated with the provision of health and adult social care. I commend the regulations to the Committee.

[Lord Hunt of Kings Heath]

My Lords, I start by declaring an interest as chairman of an NHS foundation trust and as a consultant trainer on NHS and health issues.

I thank the noble Earl, Lord Howe, for his very extensive explanation of the regulations. Although the instrument is mainly technical in respect of the scope and definition of regulated activities, I do not think that it can be divorced from more general issues facing the CQC and its turbulent history over the past few years.

It is clear that the CQC faces some fundamental challenges over leadership, sense of direction and the confidence that both the public and the sector it seeks to regulate have in it. The noble Earl, Lord Howe, mentioned the Public Accounts Committee report of 12 March, which stated that the commission had more responsibilities but less money than its predecessor organisations. It pointed out that, none the less,

“it has consistently failed to spend its budget because of delays in filling staff vacancies. It is overseen by the Department of Health … which underestimated the scale of the task it had set in requiring the Commission to merge three bodies at the same time as taking on an expanded role. The Commission did not act quickly on vital issues such as information from whistleblowers. Neither did it deal with problems effectively, and the Department is only now taking action”.

The PAC concludes:

“We have serious concerns about the Commission’s governance, leadership and culture. A Board member, Commission staff, and representatives of the health and adult social care sectors have all been critical of how the Commission is run”.

I also noted with interest what the noble Earl said about his department’s own performance and capability review. I do not disagree with the summation in the review that:

“CQC’s achievements are considerable and should not be underestimated”.

The review points out that since 2009 it has not only brought together three different organisations and developed a new regulatory model but has brought 21,000 providers into the new regulatory regime and carried out more than 14,000 compliance inspections and reviews. I also understand from the capability review that:

“CQC has now set the essential platform from which tougher regulatory action can be taken when needed, if and where standards fall below acceptable levels”.

However, it points out that, alongside those achievements,

“CQC has faced operational and strategic difficulties, as previously documented. Delays to provider registration, shortcomings in compliance activity and, at times, a negative public profile have seriously challenged public confidence in its role. With hindsight, both the Department and CQC underestimated the scale of the task of establishing a new regulator ... Even so, CQC could have done more to manage operational risks”.

Looking forward, the review states that there are important issues that need to be addressed. First, the CQC should become more strategic; and, secondly—this is very telling in view of my later comments—accountabilities are unclear. The review says that there is a blurring of the boundary between the board and the executive team, with the board only recently moving to take on a stronger role to constructively challenge the executive team. Finally, the review says that the underlying regulatory model is new and that so far there is limited practical evidence of its effectiveness.

I have now had the opportunity to read the Treasury minute responding to the PAC report, in which the Government agreed with the PAC’s recommendation on the need for an action plan to secure the changes that are required. I also note from the Treasury minute that, on governance, the Government promise that a new board structure will be in place by October 2012. When the noble Earl responds, perhaps he will say a little more about this governance structure. Can I take it that there will be a process of reappointing non-executives? It would be helpful to know whether that is intended.

On the role of the commission, the Treasury minute refers to the comment made by the PAC, which stated that there was at least uncertainty about the core role of the commission. My understanding from the Treasury minute is that the Government accept the challenge of setting this out with measurements of quality and impact to assess the CQC’s effectiveness.

Having seen the reports from the PAC and the Health Select Committee, and the department’s own review, we now have an understanding of some of the actions that will be taken. Does the noble Earl consider that they will be sufficient to ensure confidence among the public? I invite the noble Earl to reflect on that because, however worthy many of the CQC’s actions were, one should not underestimate the knock to public confidence that has occurred in these turbulent years.

Perhaps I can tempt the noble Earl to gaze into the future and say a little about how the CQC might fit into the new NHS architecture. In our debates on the Health and Social Care Act we considered the relationship between CQC, the NHS Commissioning Board and Monitor. There is some built-in tension there, and I am interested to know how the noble Earl thinks the whole thing will fit together.

We also await the second Francis report, which I gather is now due in the autumn. Inevitably, this will have something to say about the CQC and, I suspect, the regulatory architecture. Again, I cannot anticipate what the inquiry will say, but will the noble Earl say a little about what process the Government intend to adopt following receipt of the report? Clearly it could have an immediate impact on some of the changes that the Government are making as a result of legislation.

On the burden on the CQC, it was a mammoth task bringing three organisations together and, essentially, increasing the responsibility but reducing the resources. One should not underestimate the task that was placed on the CQC, which was expected to take on new responsibilities. The noble Earl mentioned the responsibility of embracing the registration of providers of NHS primary medical services. This has now been delayed until April 2013 but, none the less, is a major additional responsibility. The Public Accounts Committee commented on this and said that in the past the commission’s inspection work suffered when it had to register large groups of providers. The committee said that it shifted its focus to registration and carried out far fewer inspections than planned. What guarantees can the noble Earl, Lord Howe, give me that moving to take on primary care providers will not impact on the other essential responsibilities of the CQC?

17:45

I note that the PAC also recommended that the commission review and set out how it will make sure that the assessment of GP practices is meaningful. In the Treasury minute the Government have said that they agree with that recommendation. I am sure that that is useful but, in order for it to be effective, one has to be reassured that the CQC has the capacity to cope with this new responsibility. How successful does the Minister think the CQC has been in focusing on areas where it is likely to have the greatest impact and where the burden of regulators on providers can be justified?

This is not an easy task. The scale of the sector is huge—it ranges from a plus £1 billion foundation trust not a million miles away from here, to a single-handed GP or to a small care home. It is a huge responsibility and deciding the priorities on a risk basis is a tremendous challenge. Over the fullness of time, it would be good to know how the CQC is able to deal with this.

I am tempted to say to the noble Earl that, of course, the CQC has not always been helped by interventions from his ministerial colleagues. I refer to the intervention of the Secretary of State in launching spot checks on more than 300 abortion clinics. Let me make it clear that I accept that the Secretary of State should have intervention powers. From our debates on the former Bill, the NHS Commissioning Board will know that I very much uphold ministerial interventions. The Secretary of State must always have an ability to say, “Here is a concern. You as regulator need to go into it”. I do not have a problem with that.

I am not sure that the Secretary of State got his priorities right and I draw the noble Earl’s attention to the comments of Stephen Dorrell, the chairman of the Commons Health Select Committee, who thought that the Secretary of State’s approach might have been better if he had drawn the CQC’s attention to the fact that the subject of abortion clinics was an issue in the media and invited it to consider this in the context of its priorities. The question that Mr Dorrell put was whether the CQC, as an independent regulator, should determine its own priorities or have its priorities determined for it.

I fall somewhere in the middle. I do not go as far as Mr Dorrell. As I have said, there will always be occasions when the Secretary of State, in upholding the public interest in the health service, should have a right of intervention. Of course, the way in which the regulator conducts its inspection must be entirely a matter for the regulator and should not be subject to political interference. My concern is about priorities and whether the Secretary of State, in taking the action that he did, thought carefully enough about whether that would have a negative impact on the resource availability of the CQC to do the other things that it needs to do.

I note that because of issues of capacity and complexity the PAC recommended that the CQC should not take on the functions of the Human Fertilisation and Embryology Authority at this time. In stark terms, the Treasury minute states that the Government do not agree with the committee’s recommendations but points out that the department has made a commitment to undertake a full consultation of options before making any decisions. Can the noble Earl say any more about the progress that has been made in the timetable for that consultation? It would be very helpful.

Returning to the issue of whistleblowing, which I mentioned earlier, whistleblowers have to be a key source of intelligence in helping the commission to monitor the quality of care. The Public Accounts Committee was concerned with the closure of the dedicated whistleblowing line that the Healthcare Commission had previously used. I see from the Treasury minute that the department believes that that was a justified decision. That is open to debate. I respect the views of the Government on that but there is an issue around whistleblowing.

I am concerned at the potential treatment of a non-executive board member of the CQC, Kay Sheldon, who gave evidence to the Francis inquiry and whose membership of the CQC board is apparently at risk. She developed substantial concerns about the way in which the board was operating and believes that she raised those concerns about the management, culture and leadership of CQC over a sustained period. She says that she repeatedly raised these issues internally but her experience was that other members of the CQC board, and the senior management of the organisation, failed to engage on the issues she was raising.

I would again draw the noble Earl’s attention to his own capability review, which seemed to suggest that there was a confusion of roles on the board and that the department is now satisfied that the non-executives are providing the scale of challenge necessary. It is quite significant that Ms Sheldon clearly found it difficult to get her concerns treated seriously. She raised issues with the noble Earl’s department and the National Audit Office but felt that those were not treated seriously. In the end, she approached the Mid Staffs public inquiry team and gave oral evidence on 28 November 2011.

In describing the evidence that Ms Sheldon gave, along with another colleague from the CQC, leading counsel to the inquiry said that,

“the great majority of the evidence of both witnesses, in our submission, goes to the following: clear and identifiable issues which are relevant to the systems and culture within the CQC as it was at its inception, with the shadow board in late 2008 and at its inception in 2009, and as it is now. Those are whether or not there is a clear strategy for effective regulation in place at the CQC, the effectiveness of the board of the CQC and the culture of management within the CQC”.

The chairman of the public inquiry said:

“Both today’s witnesses, I should make it clear, have come forward to this inquiry of their own volition, and I suspect it has required great courage on their part to do so. So far I have seen nothing to suggest that they have acted other than in good faith, and without intending to refer in any way to the technicalities of current whistle-blowing legislation, it seems to me that both these witnesses are properly called whistle-blowers”.

I understand that on the day Ms Sheldon gave evidence to the public inquiry that the Secretary of State had set up, the chair of the CQC wrote to the Secretary of State to invite him to use his powers under the Health and Social Care Act 2008 to remove Ms Sheldon from the CQC board on the basis that there was an irretrievable breakdown of trust and working relationships. However, there has to be a suspicion that action was taken against her because she had the courage to give evidence to a public inquiry which the Secretary of State had set up.

Following the letter from the chair of the CQC, which requested that the Secretary of State exercise his powers under paragraph 3(3) of Schedule 1 to the Health and Social Care Act 2008 to remove Ms Sheldon from her position as a non-executive member of the CQC board, I understand the Secretary of State appointed Ms Gill Rider, the director-general of leadership and people strategy at the Cabinet Office, to investigate the background to this request. Ms Rider prepared a review, which was coincidentally released on the same day that the Public Accounts Committee reported— 12 March 2012. The essential conclusion of the Rider review, as I understand it, is that the public airing of concerns by Ms Sheldon caused a fundamental breakdown of trusting relationships between Ms Sheldon and the other members of the board. Therefore, she recommended to the Secretary of State that he exercise his powers to remove Ms Sheldon from the board.

I understand that the Secretary of State has written to Ms Sheldon, inviting her to make a full response to Ms Ryder’s review, indicating that she may have met the grounds for termination set out in the Health and Social Care Act 2008.

I do not know how much the noble Earl can respond to me today, but I use this opportunity to express some concerns that I have. I would have thought it clear that Ms Sheldon acted in the public interest and I want to take the noble Earl back to the conclusion of the capability review. I was very struck by the comment that there had been a blurring of the boundary between the board and the executive team, and only recently has the board moved to take on a stronger role to the constructive challenge of the executive team. My argument would be that, in those circumstances, surely Ms Sheldon should not be penalised for taking her concerns to the Francis inquiry, having already raised them at the CQC, the department and the National Audit Office and feeling that they were not dealt with effectively.

It is very important that whistleblowing should be supported. I use this opportunity to make it clear to the Minister that the decision of the Secretary of State in relation to Ms Sheldon will have a profound effect on whistleblowing generally within the National Health Service. I urge a great deal of sensitivity when it comes to making any such decision.

Finally, I in some ways replicate the comment that the Minister made at the beginning of his remarks. I do not underestimate the CQC’s achievements and the commitment of its people; I believe that Dame Jo Williams, the chairman, and Cynthia Bower, the chief executive, are people of the highest integrity and I have very great respect for them. However, very searching questions have to be asked about the CQC and its performance and future, and they deserve to be answered. As we have an extensive statutory instrument that relates to the role of the CQC, it is appropriate for me to put those points to the Minister tonight.

[Earl Howe]

My Lords, I am grateful to the noble Lord for his comments. I begin by thanking him for the expressions of support that he gave to Dame Jo Williams and Cynthia Bower. I am sure that they will read those with gratitude.

The noble Lord made a number of points around the capability of the CQC to undertake the duties placed on it. The performance and capability review found that in its early stages the CQC was understandably focused on operational priorities. However, the achievements of the CQC should not be underestimated, and I was glad to hear the noble Lord acknowledge that. The review also acknowledges that the CQC leadership could have done more to manage operational risks and provide better strategic direction. We are clear that the CQC leadership is now demonstrating greater confidence and challenge. The recommendations are aimed at building on performance over the last 12 months, which I think has been noticeable, to further strengthen capability and improve accountability, including within the department.

We were very frank in our assessment of our own role—that is to say, the role of the department—in this. The capability review recognised that the department and the CQC underestimated the scale of the task of combining three regulators into one organisation while developing and implementing the new regulatory model. Even so, the review found that the CQC could have done more to manage the difficulties that it faced in its first few years.

We need to address those points but, at the same time, to look ahead. The department is committed to supporting and strengthening the CQC. We are clear that the CQC should continue in the future to focus on its core role of assessing whether providers meet the essential levels of safety and quality through its registration function. We have every confidence in the CQC’s ability to provide effective regulation of providers of healthcare and adult social care in England. The performance and capability review found that the CQC has made significant progress in the last nine months and is clearly focused on its core tasks.

The review has already made recommendations to strengthen the board and the board’s structures, which was a matter raised by the noble Lord, including changing the board so that, instead of comprising only non-executives, it becomes a unitary board of majority non-executives, with senior executives on the board where they can be better held to account. It also recommended that the CQC reviews and reinstates the board’s support and development programme and strengthens capability at executive team level with greater strategic capability and more and wider sector-specific expertise. The department will oversee the implementation of those recommendations.

18:00

The noble Lord mentioned in particular Kay Sheldon, who is a member of the board. I hope that he will understand that I do not want to comment on the position of individual members of the board, but I assure him that the department is committed to ensuring that the board of the CQC functions well and is effective.

Based on the capability review, the CQC will now be expected to set out as part of its business plan for 2012-13 an agreed action plan providing details of how the recommendations will be taken forward. These recommendations are intended to make the CQC more strategic and responsive to risk, to set out more clearly what success looks like, to clarify accountability arrangements, including strengthening the membership and structure of the CQC board, as I have mentioned, and to provide greater consistency and coherence in the development and delivery of regulation. Those three things will run through the business plan.

The noble Lord spoke about the various new roles that the CQC will be undertaking. The roles that we are asking the CQC to take on are intended to strengthen its existing role as the independent regulator of health and adult social care. At the same time, in line with the Government’s regulatory reform agenda, we are looking at ways to reduce the regulatory burden on the system for providers. The functions considered for the CQC are those that have a natural synergy with the commission’s primary functions. That is where the registration of GP practices comes in. As the noble Lord knows, we took the decision, in response to a request from the CQC, to defer the registration of around 9,000 providers of NHS primary medical services. That decision will give the CQC additional time to improve the registration process for this tranche of registrants. The CQC is overhauling its online application process so that providers will be able to start completing their applications sooner than in previous application rounds. The website will contain full information on the registration process. It will provide updates on the progress of an application and on how long it is anticipated it will take for key decisions to be made. That is a very welcome development.

The CQC will also put in place a central team to handle applications, reducing the risk of the registration of NHS primary medical care providers impacting on the CQC’s ability to monitor compliance for other registered providers. The CQC is working to put in place a different system for CRB checks for the registration of providers of primary medical services that will be effective, but simpler, and should avoid the delays experienced in the registration of dentists.

The noble Lord mentioned the Mid Staffs inquiry and the report that we expect in October from Robert Francis QC. All I can say at present is that we will consider Mr Francis’s recommendations when they are published. I hope that the noble Lord will understand that it is difficult for me to anticipate what we will do before we read those recommendations.

The noble Lord also mentioned the CQC’s recent activity in conducting spot checks on abortion clinics. He asked whether it would have been more appropriate for the CQC to direct its own priorities. The central point I would make here is that the CQC needs to take into account any relevant information it receives within the context of its ongoing work programme. My right honourable friend the Secretary of State was made aware of a potentially serious issue where providers were not compliant with the law. The CQC acted accordingly and, in my view, that was appropriate.

The noble Lord also asked me about the plans to transfer the work of the Human Tissue Authority and the Human Fertilisation and Embryology Authority to the CQC. As he knows, our report from the review of arm’s-length bodies nearly two years ago set out the work that the department is doing to reduce bureaucracy and improve efficiency in its arm’s-length bodies, and indeed throughout the NHS. We have not accepted the PAC’s recommendation that the CQC should not take on the functions of the HFEA at this time. The Department of Health has made a commitment to conduct a public consultation on the transfer of HFEA and HTA functions and the abolition of those bodies. We will publish the consultation shortly and we of course welcome responses to inform our thinking. We are pleased that the PAC recognises that we will be consulting on this proposal and considers this to provide a “welcome pause”.

[Lord Hunt of Kings Heath]

I am grateful to the noble Earl, Lord Howe. Perhaps I may make just a couple of points. On the consultation on the HFEA, all I should like to say to him is that it might be useful if there were some time for parliamentary discussion in your Lordships’ House around the consultation—not to second-guess the consultation process but, I should have thought, in view of our previous debates, to allow for some discussion among parliamentarians about the consultation document.

Secondly, as regards Kay Sheldon, I fully understand that the noble Earl is not prepared to comment on any individual case. He went on to make the point that the department was concerned to ensure that the board of the CQC was well functioning and effective. One could take that both ways. I understand, in a sense, the ambiguity of the noble Earl’s expressions in relation to that. All I would say to him is that I would ask the department to walk very carefully in this area. I know that he has debated the issue of whistleblowing many times in the past few years, and he has always upheld the rights of whistleblowers. Although it might be argued that a board member is a little different from a member of staff, there will sometimes be circumstances when board members themselves can become frustrated that they have raised concerns that are not then dealt with. Taking action against a board member who has actually given evidence to a public inquiry will send unfortunate signals to the NHS about how strong collectively we are in supporting whistleblowers. I do not expect the noble Earl to respond to that but hope that it will at least encourage the department to think very carefully about their actions in this case.

[Earl Howe]

My Lords, on the noble Lord’s first point, I would be very willing to take part in a debate on the issue involved in our proposals to transfer the functions of the HFEA and the HTA to the CQC. I can only say that I will ensure that the noble Lord’s suggestion is fed into the usual channels.

On the second issue that he raised, I appreciate his understanding that it would not be appropriate for me to comment on the position of individual members of the board. I am sorry if my remarks appeared ambiguous; that was certainly not my intention. All I intended to say was that the CQC will be facing significant challenges over the coming months, as we have been discussing, and the department is committed to ensuring that its board has the skills and capabilities it will need to meet those challenges.

Motion agreed.

Committee adjourned at 6.10 pm.