Recommendation 218

Non-compliance with standards for leaders

Accepted
Serious non-compliance with the code, and in particular, non-compliance leading to actual or potential harm to patients, should render board-level leaders and managers liable to be found not to be fit and proper persons to hold such positions by a fair and proportionate procedure, with the effect of disqualifying them from holding such positions in future.

The Care Quality Commission will work with other organisations and interested parties to determine how the fit and proper person test will be applied in practice so that it draws on the standards set out in Standards for members of NHS boards and Clinical Commissioning Group governing bodies in England.  We will support NHS organisations to make better use of recruitment and referencing processes to ensure that appointment processes are clear about whether or not an applicant is a fit and proper person of good standing.

The public have the right to expect that people in leading positions in NHS organisations are fit and proper persons; and that where it is demonstrated that a person is not fit and proper, they should not be able to occupy such a position.  Monitor and the Care Quality Commission are committed to ensuring that, taken together, their processes for registration and licensing reflect these principles.  The Care Quality Commission’s inspection regime will include a focus on whether or not an organisation is ‘well-led’.

Monitor’s licence conditions already require providers to ensure that no person who is an unfit person may become or continue as a Director and that they ensure that its contracts of service with its Directors contain a provision permitting summary termination in the event of a Director being or becoming an unfit person.

In order to strengthen this, the government issued in July 2013 a consultation on Strengthening corporate accountability in health and social care. This proposes a new requirement that all board directors (or equivalents) of providers registered with the Care Quality Commission must meet a new fitness test. We are proposing that this test includes checks about whether the person is of good character including past employment history, and if the individual has the qualifications, skills and experience necessary for the work or office as well as the more traditional consideration of criminal and financial matters.

The government proposes that the fit and proper persons test will now be used as a mechanism for introducing a scheme for barring directors who are unfit from individual posts by the Care Quality Commission at the point of registration.  Where a director is considered by the Care Quality Commission to be unfit it could either refuse registration, in the case of a new provider, or require the removal of the director on inspection, or following notification of a new appointment.

The government believes that this will be a robust method of ensuring that directors whose conduct or competence makes them unsuitable for these roles are prevented from securing them. The scheme will be kept under review to ensure that it is effective, and we will legislate in the future if the barring mechanism is not having its desired impact.  Further details will be set out in the response to the consultation on corporate accountability which will be published shortly. We plan to publish the draft regulations for consultation at the same time.

Update

The Department of Health held a consultation on a new registration requirement that all directors of providers registered with the Care Quality Commission must meet the fit and proper person test. The Care Quality Commission will be able to insist on the removal of directors that fail this test.

Fit and Proper Persons Test Regulations have been passed by Parliament and are in place in November 2014 for NHS organisations and from April 2015 for other organisations. The Care Quality Commission held a consultation between July and October 2014 setting out proposals on how organisations can meet the fit and proper person test.