The CQC - The Fit and Proper Persons Requirement for Directors - Updated Guidance and Background

The updated guidance follows on from changes outlined in the CQC's recent ‘next phase of regulation’ consultation. The FPPR was initially introduced under Regulation 5 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 (the Regulations).

Overview

1. Who Does This Apply to?
2. The General Rule
3. Requirements Under the Regulations
4. Disclosure Barring Checks (DBS Checks)
5. Obligations on Service Providers
6. Notification of Changes
7. Enforcement for a Breach of the Regulations
8. CQC Guidance
9. How We Can Help You

Who Does This Apply to?

This regulation applies to all providers that are not individuals or partnerships (other than limited liability partnerships). This would include limited companies, for example GP federations or dental corporates. Individuals and partnerships are governed by the existing Regulation 4. This means that GP practices run by traditional GP partnerships will not be covered by FPPR.

Within the Regulations, the FPPR is defined as extending to individuals acting as:

• a director of the service provider, or
• performing the functions of, or functions equivalent or similar to the functions of a director

Guidance from the CQC narrows this down to include a provider's:

• board directors,
• board members, and
• equivalents.

Equivalents are described as persons who are responsible and accountable for delivering care, including associate directors and any other individuals who are members of the board, irrespective of their voting rights. Directors are the group of people constituted (formally or informally) as the decision-making body of the organisation. Importantly the FPPR applies to interim positions as well as permanent appointments.

Where multiple providers are working together in collaboration, without a single entity, the FPPR applies to the directors of each legal entity. This may be particularly important for GPs working in collaboration, using new models of care.

The General Rule

Providers must not have an unfit director in position. The onus lies with the provider to establish which individuals fall under the FPPR. The CQC will then consider whether the provider has done this effectively.

Requirements Under the Regulations

Unless all of these are met, a person should not be appointed as a "director". The requirements are that:

1. the individual is of good character;
2. the individual has the qualifications, competence, skills and experience which are necessary for the relevant office or position or the work for which they are employed;
3. the individual is able by reason of their health, after reasonable adjustments are made, of properly performing tasks which are intrinsic to the office or position for which they are appointed or to the work for which they are employed;
4. the individual has not been responsible for, been privy to, contributed to or facilitated any serious misconduct or mismanagement (whether unlawful or not) in the course of carrying on a regulated activity or providing a service elsewhere which, if provided in England, would be a regulated activity; and
5. none of the grounds of “unfitness” apply

The regulations contain definitions of "unfitness" and "good character" in Schedule 4 Part 1 and Schedule 4 Part 2 respectively. The CQC guidance note expands on the above providing examples of conduct, which would amount to the following:

• mismanagement - e.g. fraud or theft
• good character - e.g. an individual who has received a criminal conviction or who has been struck off a professional register maintained by a regulator of health care/social work will not be of "good character"

Certain categories of persons cannot become a director at all and these include, for example, a person who is undischarged bankrupt. 

Disclosure Barring Checks (DBS Checks)

The CQC expect providers to undertake an enhanced DBS check for directors. In addition, where a director meets the eligibility criteria, providers should establish whether the person is on the children's and/or adults safeguarding barred list and whether they are prohibited from holding the office in question under other laws such as the Companies Act or Charities Act.

Obligations on Service Providers

The obligation is on providers to regularly review the fitness of directors in respect of the regulations (this will mean the remainder of the directors). This is a continuing obligation and providers must ensure persons remain fit for their roles by reviewing fitness "based on the assessed risk to the business delivery and/or to the people using the service posed by the individual and/or role".

• Arrangements must be in place to respond to concerns about a person's fitness
• Providers must instigate in a "timely manner" any concerns raised regarding a person’s ability to carry out their duties
• Where a person's fitness to carry out their role is being investigated, appropriate interim measures may be required to minimise any risk to people who use the service
• Where providers identify that a director is no longer fit they must take “appropriate and timely action to rectify the matter”

Notification of Changes

Following a merger or takeover, the merging or acquiring provider must notify the CQC to any director changes. This applies to adult social care, primary medical and dental, and independent healthcare service providers.

Enforcement for a Breach of the Regulations

The CQC cannot prosecute for a breach of this regulation or any of its parts, but they can take regulatory action in respect of breaches. Where a provider is looking to register for the first time, the registration will be rejected if the provider is unable to demonstrate compliance with the FPPR or if they cannot show that they have made appropriate checks.

If there are concerns relating to a board as whole, albeit individual directors may be fit, the CQC may address this as a governance issue and in serious cases revert to special measures. Each situation will be reviewed on a case by case basis and the guidance suggests the CQC will need to consider the most "appropriate, relevant and proportionate approach in meeting this regulation".

CQC Guidance

Click here to view the full FPPR guidance document, and click here for more information on the Regulations.

How We Can Help You

We have specialist regulatory lawyers who are able to assist you in dealing with the CQC and understanding their requirements or enforcement action and take you through the overall process.

For more information, please contact a member of our Healthcare team, or complete the form below.