Care providers have to pay too much for regulation. The CQC must step up

Rhidian Hughes

chief executive, Voluntary Organisations Disability Group

Regulation of care services has been in the spotlight in recent months. The Public Accounts Committee declared in December that the Care Quality Commission (CQC) is “not yet an effective regulator”. Then this month the Department of Health responded to a consultation (pdf) on allowing the CQC more freedoms in setting care provider fees, which services are required to pay annually.

At the Voluntary Organisations Disability Group, where I am chief executive, we have been analysing this regulatory reform debate.

Effective oversight of services is, of course, vital. Those people being supported, commissioners and the public need assurance that services are properly registered, inspected, and that regulators encourage improvement and eradicate unsafe practices. And the diverse organisations providing support, from specialist services aimed at different generations to integrated health and social care at the end of life, means a one-size fits all approach to regulation is inadequate.

But does this range of organisations really necessitate so many regulators, each with a different angle, approach and set of evidence to be collected? In England, as well as the local authority or clinical commissioning group focused on the oversight of specific contracts, there is Ofsted and the CQC, with visits from agencies happening at different times.

Social housing, meanwhile, is the focus of the Homes and Communities Agency, and the Charity Commission and the Office of the Regulator of Community Interest Companies watch from afar. Then there are the established regulators for all businesses such as Her Majesty’s Revenue and Customs and the Health and Safety Executive. Of course, different arrangements exist across the other three UK nations.

Our fear is that necessary regulation and inspection becomes restrictive red tape; expensive, wasteful and detracting from work on the frontline.

So what’s the answer? The government’s recent red tape review in social care is welcome. The Department of Health’s response commits to tackle the issues by reducing duplication and overlap in contract monitoring, inspection and data requirements.

It is vital that such steps to cut unnecessary costs in the system must be taken seriously. Social care funding is in crisis. Services are operating in a fragile market with financial pressures rising through the introduction of the national living wage, the apprenticeship levy and auto-enrolment pensions. Such developments can help to build workforce, but raise additional costs for providers.

At the same time, the CQC imposes yearly fee increases on providers. This financial year (2015/16) these fees have risen by 9%. The CQC has consulted on a further increase, so some providers could be hit with a 300% rise in charges. The question from CQC to providers has not been on the scale of the increase, but whether the additional costs should be introduced over two or four years.

This comes alongside the Department of Health granting the CQC more freedoms in setting fees from April, something the department suggests (pdf) “might serve to increase the pressure on the CQC to make efficiencies and economies to their regulatory process”.

We also have concerns that the CQC’s strategy consultation does little to strengthen their commitment to efficiency and cost control. We anticipate a further shifting of regulatory costs to providers.

In the CQC’s flawed approach to fees “good” services already subsidise the more frequent inspection of “inadequate” services. Inadequate providers do not pay a higher charge, despite being the most burdensome. This situation will continue under the CQC’s proposals to focus inspection even more closely on services posing the greatest risk.

While it is absolutely necessary to weed out poor services, one consequence is that it would take “good” ones longer to reach an “outstanding” rating, regardless of improvement, simply because they are inspected less frequently.

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The CQC also proposes “a single shared view of quality”. This has potential to reduce the multiple inspections by different oversight bodies and would also enable providers to align their internal monitoring processes with the CQC’s inspection framework. However, the problem is that the regulator will expect providers to complete more detailed self-reporting at their own expense.

Another CQC plan involves developing methods to assess the quality of health and social care for different populations and across local areas. While this could shed light on commissioning practices, it doesn’t relate to the regulation of individual services – so cannot justifiably be funded through increased fees paid by providers.

The Treasury is after full-cost recovery, so the CQC is financially self-sustaining. But this approach forces a strategy on the regulator that is not financially fit for purpose and adds to the red tape that the government is so keen to remove. Robbing Peter to pay Paul makes little sense as CQC charges providers, and then services pass on these costs to local authority and NHS commissioners.

The CQC has essential public interest functions, so providers must share some of its costs. But care services need a fair deal from those that regulate them; we cannot meet the full costs of regulation alone. All parts of the system need to exercise greater leadership with the Treasury, including the CQC as it moves closer towards its ambitions of becoming efficient and effective as well as relevant and sustainable for the future.

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