MPs question CQC’s ability to monitor financial health of care providers

MPs have called for the task of assessing the financial health of large care providers to be handed to Monitor rather than the Care Quality Commission (CQC).

In its annual report on the CQC, Parliament’s health select committee raised doubts about the health and social care regulator’s ability to keep tabs on the financial situation of large care providers and urged the government to instead give the task to Monitor, which carries out a similar role in the NHS.

Committee chair Stephen Dorrell MP said: “The CQC regulates care quality and not financial performance. We recommend that the government should reconsider the proposal that the CQC should widen its remit in this way.”

However the CQC, which this week published its plans for implementing the new role, rejected the committee’s view.

“I do not believe that it is possible to separate finances from issues of quality – they are two sides of the same coin,” said CQC chair David Prior.

“In adult social care we will work with partners on this issue. In the NHS it is very important that Monitor, the NHS Trust Development Authority and CQC work closely together. If an organisation is struggling financially it is likely to be struggling to maintain quality.”

The plan to have the CQC assessing care provider finances is part of the Care Bill and is set to take effect from April 2015.

It would see the regulator tasked with monitoring the financial wellbeing of large care operators whose collapse could lead to crises in care, alerting local authorities to potential risks and co-ordinating responses to mitigate the effects of a collapse of a provider.

The proposal follows the collapse in 2011 of care home operator Southern Cross, which was looking after 31,000 residents in 750 homes at the time.

In its plan for implementing the new duty, the CQC said carrying out financial checks would require complex and specialist skills that it currently lacked and envisaged the creation of new roles and the use of external providers to fill that gap.

However Martin Green, chief executive of care provider association Care England, dismissed the plan to get regulators to start monitoring care home finances as “nonsense”.

“It is all to do with politicians wanting to be seen as doing something after what happened with Southern Cross,” he said.

“No one has turned on the auditors of Southern Cross who gave that company a complete audit. I could not believe that the auditors got away scot free. There is not necessarily a need for new legislation and processes.

“But if there are going to be new processes the question is who has the competency to do it. In my view neither Monitor or the CQC have that competency within their organisation at the moment so whichever one does it is going to have to do a lot of capacity building to deal with that.

“I can see where politicians are coming from in suggesting Monitor because they are the financial regulator of the health service’s independent parts so on some levels it would make a bit more sense because they’ve already got a bit more of a specialist remit in that area.”

While the health committee questioned the CQC’s role in financial assessments of care providers it concluded that the regulator was making progress in improving its methods and approach.

“The CQC has been a case study in how not to run a regulator, but essential reforms implemented by the new management are turning the CQC around,” said Dorrell.

“Putting in place systems to inspect hospitals and care homes proved too much for the CQC in previous years. Inspections were superficial and produced reports which bore little relation to reality, but the CQC now has a coherent plan to make sure providers are properly examined.”

Prior said the committee’s recognition that the CQC is turning itself around was “an important milestone” for the organisation.