Directors of urgent care provider warned they could face prosecution over financial ‘criminal offences’

In a letter seen by HSJ, the Financial Conduct Authority told The Partnership of East London Co-operatives it “appears to have committed criminal offences” and the FCA is “therefore minded to consider prosecution of the society and/or its officers (directors)”. 

PELC provides urgent care services in outer north east London, including GP out of hours and urgent treatment centres.

Because it is registered as a co-operative society, it is subject to legislation overseen by the FCA and obliged to submit an annual return and accounts to the body within seven months of the end of its financial year.

The letter, which was dated 15 April and addressed to PELC’s secretary, said the provider has not filed these documents for 2018-19 and 2019-20. The accounts for 2017-18 were also not submitted until November 2020 — almost 20 months after the year end.

The FCA said: “If prosecuted, the society and/or its officers (directors) could face a fine of up to £1,000 per offence.”

Co-operative societies are governed by a council or board of directors, who are responsible for the organisation. They are also meant to have an open and voluntary membership, which has democratic control of the society. Members hold to account, elect and can stand for election to the board of directors.

PELC’s 2017-18 accounts show it has 464 members, but the FCA said it appears “membership is not appropriately maintained to ensure new members can vote to appoint or remove council members”.

The FCA said it was concerned “the society is not allowing members to exercise their right to democratically control the society” nor is the council of directors “permitting members to be elected to join the council or participate in the governance of the society”.

The watchdog added it had received information from the early findings of a Care Quality Commission inspection, “relating to the governance of the society, and areas of non-compliance with the society’s registered rules”.

The provider has until 23 April to reply to the agency’s concerns. The FCA said “engagement on this matter is voluntary”, but added it “will consider [the] response, or lack thereof, before deciding whether to progress either prosecution and/or cancellation”. 

Its 2016-17 accounts show the organisation made a loss of around £467,000 on a £16m turnover. It has since been commissioned to provide more services, including urgent treatment centres in outer east London.

PELC said in a statement: “PELC council confirms that it received a letter last week from the Financial Conduct Authority detailing a number of concerns relating to timely submission of annual reports and compliance with the provisions of the society’s constitution.

“The council will provide a full response to the questions raised within the required deadline and is working with its members, the FCA, CQC, commissioners and other key partners and stakeholders to ensure any concerns are fully addressed.

“The council is keen to make it clear that the quality and safety of its service to local residents and patients remains its paramount priority, and it will ensure staff are fully supported through this process to maintain the high levels of performance currently being delivered.”

Vicki Wells, the CQC’s deputy chief inspector of primary medical services and integrated care for London, said: “Following an inspection in March and April of Queens Urgent Treatment Centre and Barking Urgent Treatment Centre, which form part of PELC, relevant information of concern was passed to the FCA regarding the provider’s governance. The findings of our inspection will be published in due course.”

A spokesman for the North East London Clinical Commissioning Group said: “As soon as the CCG was informed about the issues identified by the CQC and subsequently referred to the FCA, we immediately discussed the situation with the PELC leadership and reviewed the clinical processes to ensure patient safety was not compromised, and we continue to support the appropriate actions by PELC to address the matters raised.

They said the CQC had previously rated two of the provider’s services as “good”.

HSJ has also approached the FCA for comment.

Update: this post was updated at 16.53 on 20 April to include a comment from the North East London CCG.