Recommendation 84

Reporting of executive and non-executive contract termination

Accepted in principle
Where the contract of employment or appointment of an executive or non-executive is terminated in circumstances in which there are reasonable grounds for believing that he or she is not a fit person to hold such a post, licensed bodies should be obliged by the terms of their licence to report the matter to Monitor, the Care Quality Commission and the NHS Trust Development Authority.

In cases where there are reasonable grounds that a person is not fit to hold such a post, we would expect this view to be reflected in the references provided by the employer to a prospective new employer.  Prospective employers have a responsibility to seek references from previous employers.  NHS Employers are working on how to support organisations so that all information relating to recruitment into Board positions is presented, known and used by employers.  Rather than use a regulatory intermediary as a register of concerns about a person’s fitness of the kind identified by this recommendation, we therefore believe it would be better to make references and recruitment processes more effective.

We agree that the public has 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’s licence conditions for providers of NHS services already prevents licensees from allowing unfit persons to become or continue as governors or directors  (or those performing equivalent functions).  They are also required to ensure that their contracts of service with its directors contain a provision permitting summary termination in the event of a director being or becoming an unfit person.  The licensee is also required to ensure that it enforces that provision promptly upon discovering any Director to be an unfit person.

In order to strengthen this, the government issued in July 2013 a consultation onStrengthening 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 includeschecks about whether the person is of good character including past employment history, 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. 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 has consulted on a new registration requirement that all directors of providers registered with the Care Quality Commission must meet a fit and proper person test. The Care Quality Commission will be able to insist on the removal of directors that fail this test. The consultation included how the revised fit and proper person requirement will work, and questions about the impact of the new regulations. The consultation ran from 27 March to 25 April 2014.The 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.