Neil Grant takes a look at the Care Quality Commission’s approach to assess the fitness of senior managers

When the Department originally consulted on the Fit and Proper Persons Requirement (FPPR), the focus was on introducing some form of barring scheme for individual senior managers who were judged not to be fit and proper to work within registered services. That position reflected the thinking that came out of the Mid Staffordshire Inquiry that there needed to be a framework that held senior managers to account in relation to their conduct and performance.

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A public barring scheme operated by the Care Quality Commission or a profession led regulator never emerged. Instead, the FPPR that was introduced focused on the employer having proper systems and procedures in place to assess the fitness of individual directors or their equivalents, as well as those that might be recruited to those positions.

Passive approach

The CQC’s approach to the FPPR has been relatively passive in the sense that it has said, and continues to say, that it is not its role to investigate the fitness of individuals. If it is provided with information which may call in to question the fitness of a director, it will pass on the information it considers should be shared to the employer, asking them to carry out their own investigation of the facts and evaluation of fitness, notifying the CQC of the outcome.

If the CQC is not satisfied that the provider has responded to the issues appropriately it can lead to “a request for further dialogue with the provider, a follow up inspection, or regulatory action

While in broad terms it is correct to say that CQC is a systems regulator, not a regulator of individuals, that separation is not an absolute one. The CQC does register and regulate individuals as providers, singly or in partnership with others. However, this only occurs in the independent sector, not the NHS where all registered providers will be organisations.

The regulation of individuals is also present in relation to actual or would be registered managers, although for some strange reason the requirement for a registered manager does not apply to the NHS. The fitness of such individuals in the independent sector, whether as providers or managers, is material to decisions about their registration in the first place, and their ongoing regulation if they are registered.

The NHS does not get off entirely as the CQC can prosecute directors in relation to service failures linked to their consent, connivance or neglect. The FPPR also acknowledges the importance of the fitness of individual directors employed by any registered organisations or of individuals who may be recruited or appointed to those roles.

The irony is that the law was far stronger under the old Registered Homes Act 1984 which provided that applications for registration could be refused in relation to nursing homes and residential care homes on the basis that the applicant or any other person concerned or intended to be concerned in carrying on the home was not a fit person.

Lack of fitness was also a ground for cancellation. The Registered Homes Act was repealed on 1 April 2002 with a weaker form of organisational regulation introduced under the Care Standards Act 2000. Rather belatedly, the FPPR was an attempt some 12 years later to try to fill the gap created by the change in the law after April 2002. It was not, therefore, a new concept at all.

The reality is that the CQC cannot always sit on the sidelines as far as the FPPR is concerned. It is not enough for a provider to have a policy and procedure in place around the FPPR; it has to be implemented in a robust fashion to the satisfaction of the CQC.

Inevitably that requires the CQC to consider whether a reasonable investigation has been undertaken by the provider and a reasonable decision made on the question of fitness. In particular, this is likely to be an issue in relation to any alleged misconduct or mismanagement and whether that is of a serious nature such as to lead to a finding of unfitness to be employed or recruited as a director or equivalent.

If the CQC is not satisfied that the provider has responded to the issues appropriately it can lead to “a request for further dialogue with the provider, a follow up inspection, or regulatory action” (Our Next phase of regulation, Consultation 2, page 68).

Regulatory action

Regulatory action might include service of a warning notice under Regulation 17 (good governance) or the imposition of conditions requiring steps to be taken. If the CQC concluded that a director was not fit but the provider continued to employ the individual, the CQC could issue a notice of proposal to impose a condition requiring the person to be removed as a director.

Providers are going to have to enhance their systems and processes in light of the anticipated guidance if they are to withstand the scrutiny not only of the regulator but also the media and the wider public

If the proposal was confirmed by the CQC, there would be a right of appeal to the First tier Tribunal not only by the provider but also the individual affected by the decision. At Ridouts we are not aware of that regulatory action ever having occurred in relation to a registered provider but the fact that it exists in the legislation envisages there may be situations where the direct intervention of the CQC is required to remove an individual director from a service.

There is of course NHS Improvement’s role in appointing and removing NHS trust chairs and non-executive directors. If an NHS trust chair or non-executive was found not to meet the requirements of the FPPR, this would provide grounds for removal under NHS Improvement’s jurisdiction as well as the CQC’s. In reality, chairs and non-executives are normally given an opportunity to resign such that formal action is rarely needed.

The CQC’s June 2017 consultation includes “Guidance for the implementation of the fit and proper persons requirement.”

It provides guidance on what might constitute serious misconduct or serious mismanagement. Examples include:

1. Failure to make full and timely reports to the board of significant issues or incidents, including clinical and financial issues;

2. Repeated or ongoing tolerance of poor practice, or failure to promote good practice, leading to departure from recognised standards, policies or accepted practices;

3. Continued failure to develop and manage business, financial or clinical plans.

The guidance being consulted on does state that providers should consider whether the individual played a central or peripheral part in the serious misconduct or mismanagement and consider whether there are any mitigating factors. However, the test is not only direct commission. It extends to contributing to the serious misconduct or mismanagement, facilitating it or even being privy to it.

In relation to the latter, the consultation document says this means “the director was aware that misconduct or mismanagement was happening in an organisation and failed to respond to that knowledge by acting in an appropriate manner.”

Provider will have to have regard to the guidance when discharging their responsibilities under the FPPR. As the above examples confirm, it covers the sort of service failures that are not uncommon in the NHS and independent sectors.

A criticism of the CQC has been that they have not policed or enforced the FPPR with any real vigour. That will have to change if the proposed guidance is introduced as it is highlights expressly what serious misconduct or mismanagement looks like.

One would expect many more directors to be judged unfit if this guidance is applied robustly by providers considering past or current performance or by CQC via regulatory action if it is not satisfied by a provider’s investigation and assessment. Providers are going to have to enhance their systems and processes in light of the anticipated guidance if they are to withstand the scrutiny not only of the regulator but also the media and the wider public.

Neil Grant is director at Ridouts Solicitors