England's health and social care sector can expect more change at the Care Quality Commission

Businesses operating in the health and social care sector have witnessed significant recent developments with the Care Quality Commission (CQC) increasing enforcement activity as criticism of its new single assessment framework (SAF) mounts – and further reform is likely after the CQC recently acknowledged that it must "rebuild trust in our regulation".

Both the CQC's increased enforcement activity and the new SAF will need to be factored into business plans by companies operating in the health and social care sector, as well as suppliers and investors in those companies. In particular, businesses should pay close attention to enforcement action and changes to the CQC's operations.

What is the CQC?

The CQC is the public body responsible for overseeing and enforcing standards in the health and social care sector in England. The CQC regulates, inter alia, care homes where nursing or personal care is provided, dental services, GP practices (NHS and private), ambulance services, family planning clinics and hospitals. It also regulates providers of care services that attend to patients in their own homes.

The new SAF

The CQC is now operating under a revamped assessment framework that has been rolled out over the past year. The SAF is the criteria that the CQC will use when inspecting the quality of health and social care providers and determining whether a provider should be granted registered status.

The new framework has retained the five key questions the CQC asks when considering the performance of providers: is the service safe, effective, responsive, caring and well led. It assesses them against the same four-point rating scale of "outstanding", "good", "requires improvement" and "inadequate".

The changes made by the SAF include the abolition of the previous key lines of enquiry and the introduction of 34 quality statements that focus on specific topics under each of the five key questions.

There will be six categories of evidence used to assess quality statements: people's experience of health and care services, feedback from staff and leaders, feedback from partners, observation, processes and outcomes. This means that the CQC will use more varied sources of information to assess health and social care providers and will move away from its previous, more rigid practice of gathering evidence solely via site inspections. It also means that information can be collected on a rolling basis to support the CQC's new approach of "ongoing assessment" – with a likely more frequent movement of providers' CQC ratings.

The new SAF, together with the CQC's increased enforcement activity, gives the overall impression of a more proactive regulator and one that is focused on streamlining its function to deliver a more dynamic, patient-led approach. The CQC could also continue to exert its "hard power" to prosecute and impose penalties on providers that are not meeting the required standards.

The UK government has consulted on whether to amend the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014, which set out the scope of regulated activities and fundamental standards. The consultation sought views relating to the expiry date of the regulations, including whether to abolish and replace them with a yearly review and whether to increase the scope of regulated healthcare provision at sporting events and the scope of notifications by mental health service providers to the CQC. The government is currently analysing feedback received as part of the consultation – and this remains an area to watch. 

'Fit for purpose'?

The CQC, however, is not without its ailments. The UK's new secretary of state for health, Wes Streeting, stated that the CQC is "not fit for purpose", following a scathing interim report by Dr Penelope Dash that had a remit to investigate the implementation of the SAF. The terms of reference for the review stated that it was to "examine the suitability of the SAF methodology for inspection and rating". This followed widespread criticism of the CQC's implementation of the SAF. 

The interim report considered the rollout and approach of the SAF and identified six key concerns. Among other factors, it criticised: a lack of consistency in how care is assessed (with no description of what "good" or "outstanding" care looks like in practice), a lack of focus on outcomes, poor communication of the SAF (both internally and externally) and ambiguity relating to data used to understand the experience from the perspective of the user (patients, for example).

More broadly, it found, as reported by the BBC, that certain CQC inspectors lacked experience, including some care home inspectors who had "never met a person with dementia". The report also identified a lack of consistency with some large care home providers and GPs "left confused after receiving different ratings across multiple sites".

Shortly after the interim report, the CQC began to take action in response to the numerous criticisms. The commission has appointed a new chief executive. It has also acknowledged the work it has to do to rebuild trust with the public, providers and staff. It has also stated that it will review longer-term improvements to the SAF and noted that it will assess how its operations managers can manage teams in specific sectors.

Dash's final report

Dr Dash's final report was published on 15 October and brings additional detail and data. As expected, the final report is critical and found "significant failings in the internal workings of CQC which have led to a substantial loss of credibility within the health and social care sectors." A significant contributing factor to the CQC's poor performance appears to be that significant changes were implemented too quickly. This follows an internal restructuring in 2023. One senior CQC executive described changing team structure, changing IT and introducing a new framework all at the same time as "bonkers".

Dr Dash's final report is centred around 10 (broadly negative) topics ranging from poor operational performance and poor-quality reports to a lack of clarity around how ratings are calculated. The final report is highly critical of the fact that the overall ratings for a care provider may be calculated by aggregating the outcomes from inspections over several years – an approach that the review says "cannot be credible or right".

Also of significant interest is the report's concerns relating to the SAF and its application, particularly given how recently the new framework was introduced. The final report builds upon the six key concerns identified in the initial report, and also raises a new concern regarding the SAF's limited reference to, and acknowledgment of, balancing risk and ensuring high-quality care across an organisation or wider health and care system.

Seven recommendations

Unsurprisingly, review of the SAF to make sure it is fit for purpose is listed as one of the final report's seven recommendations. The report also recommends that the CQC:

• rapidly improves operational performance, fix the provider portal and improve the use of date within the CQC, and improve the quality of reports;
• rebuild expertise within the organisation and relationships with providers in order to restore credibility;
• clarify how ratings are calculated and make the results more transparent;
• continue to improve and evolve local authority assessments;
• formally pause integrated care system assessments; and
• strengthen sponsorship arrangements to facilitate the CQC's provision of accountable, efficient and effective services to the public.

The CQC will need to quickly focus on implementing the final report's recommendations.  The report expects the Department of Health and Social Care (DHSC) to help support the CQC in progressing the next steps. The CQC will need to take action within the next six months, specifically to improve operational performance, rebuild expertise and foster stronger relationships with providers. The final report also expects a fundamental enhancement of the SAF, with a "far greater emphasis on effectiveness, outcomes, innovation and use of resources".

More government oversight

An increased level of government oversight of the CQC looks almost certain. The interim report called for "more regular performance review conversations…to check progress against the recommendations in this [interim] report". Expressing a similar sentiment, the final report called on the DHSC to "support the CQC in progressing the next steps". 

The new Health Secretary Wes Streeting has commissioned Dr Dash to lead two more reviews as part of a wider investigation into the entire system of health and social care regulation. This will inform a new 10-year NHS plan that is due to be published in spring 2025. Writing for The Times on 15 October, Mr Streeting made it clear that he believes that having six overlapping regulators in the health and social care sector is hampering effective regulation and that "external regulation needs simplification". He expects the two upcoming reviews to give him "the ammunition [he] need[s] to root out poor performance and to guarantee patients safe, quality care".

Businesses operating in the health and care sector would be well advised to "watch this space" closely.

Lord Darzi's report

Similarly critical, Lord Darzi published his investigation of the state of the NHS in England in September 2024. However, Lord Darzi's report is not a direct assessment of the CQC, although it does suggest that the healthcare regulator has not been effective in driving high-quality healthcare outcomes via its regulatory assessments.

In particular, Lord Darzi is critical of the CQC's approach to problem solving, finding that "there appears to be no problem for which the CQC believes the solution is something other than to add more staff".  

Penalties and enforcement rising

In parallel to the troubled rollout of the SAF, the CQC has been launching prosecutions against health and care providers in record numbers. The number of CQC prosecutions has risen from 11 cases during the years between 2009 and 2013 to 88 cases during the years 2019-2023 – an increase of 700%. 

In addition to the increased frequency of enforcement action, the value of the  financial penalties resulting from CQC enforcement action has, on average, doubled. Between 2009 and 2013, the 11 CQC prosecutions resulted in total penalties of £650,973 being paid by health and social care providers, an average of £59,179. This figure has risen to a staggering £10.6 million across 88 CQC prosecutions between 2019 and 2023, an average of £120,454.

Seemingly, it has never been more important for health and social care providers to tread the right side of the line. Failure to do so, risks exposure to an increased likelihood of prosecution with significant financial penalties.

Osborne Clarke comment

These are uncertain times for businesses and individuals operating in the healthcare sector, who are only just getting to grips with the CQC's new SAF. The recent public criticism of the CQC, combined with the secretary of state's comments, suggests that we may see a new approach to health and social care regulation. At the same time, businesses face a material risk of increased fines from regulatory enforcement action.

Ongoing rapid developments in the healthcare sector, including advances with wearable medtech, the use of AI in diagnostics and proposed digitalisation of the NHS, add further pressure to the need for a health and social care regulator that is fit for purpose and can appropriately regulate novel healthcare services.

Whether we see changes to healthcare regulation through further refinements to the CQC's powers, remit or approach as a regulator or whether we may even see the emergence of a new healthcare regulator, it remains to be seen. One thing, however, is for certain: an improvement to the UK's health and care regulation is just what the doctor ordered.

James Lister, a Solicitor Apprentice at Osborne Clarke, contributed to writing this Insight.