Agenda Item: 11
Paper No: CM/02/12/10
MEETING:
PUBLIC BOARD MEETING
DATE:
16 MAY 2012
TITLE OF PAPER: Regulatory Risk and Quality Framework
SUMMARY:
This paper updates the Board on the recent changes to risk and quality arrangements and
how these will support future regulation of the NHS.
RECOMMENDED ACTION:
The Board is asked to NOTE and DISCUSS the ongoing approach and the identified
priorities.
Executive Decision/
Board for
information
Executive and Board
decision
Executive and Board
shared decision
Executive and Board
discussion/Board
decision
The Executive Team has
made a decision and the
Board has been informed
The Board has been
consulted in order for the
Executive Team to make
a decision
This is a shared decision
between the Executive
Team and Board
This is for when it is clear
that it is a specific Board
decision (under statutory
and legal requirements)
ie. signing off the annual
accounts
* Check box as required
LEAD DIRECTOR:
AUTHOR:
DIRECTORATE:
DATE:
SUPPORTING
PAPERS:
Amanda Sherlock, Director of Operations
Louise Dineley, Head of Quality & Regulatory Risk
Operations
1 May 2012
None
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Agenda Item: 11
Paper No: CM/02/12/10
GOVERNANCE
AUDIT TRAIL:
This paper was commissioned as a supporting paper to
the paper in relation to the Regulation of the NHS 2 years
on, which was received by the Board on 18 April 2012.
LINK TO STRATEGIC
OBJECTIVES AND
BUSINESS PLAN
The review and strengthening of Risk and Quality
arrangements will enable us to focus our regulation more
effectively going forward, and deliver better regulation for
people.
There is direct relationship to the recommendations
contained in the DH Capability Review as they relate to
understanding the impact of the generic regulatory model
and understanding of risk in the system.
IMPLICATIONS FOR NCSC
None directly
FINANCIAL IMPACT:
Potential resource implications depending on direction
given.
RISK IMPACT:
The successful management of regulatory risk and
quality issues arising from regulation is a key issue which
carries significant reputational risk for the CQC.
REPUTATION IMPACT:
All of CQC’s operations and regulatory activity carries
reputational risk for the CQC.
LEGAL IMPLICATIONS:
The parameters under which we regulate all sectors are
determined by the regulations and we need to ensure
that these are not only met but as a regulator all our
actions are timely and proportionate.
HEALTHWATCH IMPACT:
None directly
EQUALITY IMPACT
ASSESSMENT:
Not required
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Agenda Item: 11
Paper No: CM/02/12/10
1.
Introduction
1.1
This paper has been produced to provide Board members with an update on the
operational changes made to strengthen Risk and Quality arrangements and
processes. The paper also identifies a commitment to measure success through
the effectiveness of regulatory action in addressing poor performance as well as the
performance of internal systems as providing the levers for change.
1.2
The report specifically focuses on management, assurance and governance
systems. Actions being taken to further test and develop the regulatory model,
including training for staff, will be covered, and reported to the Boar, via the Scrutiny
Review.
2.
Background
2.1.
Over the last six months, the Operations Directorate has reviewed the current
arrangements for the identification and management of regulatory risk as part of its
ongoing programme of continual improvement to strengthen the management of
risk, as well as consistency in the application of the regulatory model. At the same
time this work has reviewed and developed internal assurance, regulatory
judgements and the effective regulation of registered providers.
2.2
Regulatory quality and assurance tools should assist CQC in assessing the
effectiveness of action taken both in terms of outcomes and also tools used to lever
the required change by providers. Revised reporting has commenced to the Audit
and Risk Assurance Committee on the themes and trends of regulatory risk and this
work will continue to evolve with the support of the committee. For example,
assurance on the consistency surrounding regulatory judgements as well as
consistent application of the regulatory model across all regional compliance teams.
2.3
Key issues to address through the Risk and Quality Framework and revised
arrangements include:






2.4
Consistency in the application of the regulatory model to all sectors
Consistent use of evidence of non compliance in taking timely and proportionate
action including the use of the full range of enforcement powers.
Innovative use of the Commission’s enforcement powers to avoid adding to the
impact of poor quality
Perceived tolerance of non compliance and concerns relating to care delivery
through assurance and action
Robust rationale to judgements at all stages of the process as well as action taken
to support transparency and a focus on factual accuracy through provider
challenge.
Effective reporting and assurance through the Risk and Escalation Committee and
Audit and Risk Assurance Committee.
In addition to these common issues, there are also a number of specific challenges
in regulating the NHS:

Legislative constraints, for example time frames for representation before the
regulator can put information of its concerns about a service into the public
domain.
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Paper No: CM/02/12/10



2.5
The reality of quickly closing down key front line services such as A&E and
maternity.
Assessing the level of risk to the general public and the threshold for taking
urgent actions: ‘how bad does a service have to be before it’s closed?’
Influencing commissioner behaviour and patient choice.
Enhanced Regulatory Quality & Risk
The move to “Four Regions” , has provided an opportunity to strengthen the management
and assurance arrangements for regulatory risk and quality. Figure 1 details the reporting
arrangements.
Figure 1: Operations Risk & Quality Structure – April 2012
Head of Regulatory
Risk and Quality
Senior Risk
Manager
Regulatory Risk
and Quality Officer
Senior Quality
Manager
Regulatory Risk
and Quality Officer
Specialist Areas:
IR(ME)R,
Pharmacy
&Controlled Drugs
Regulatory Risk
and Quality Officer
Enforcement
Advisor x 2
(North & Central,
London & South)
National Advisor:
Safeguarding x 1
HCAI &Risk x 1
Corporate Provider
Compliance
Manager
(Team Leader)
Quality, Assurance
& Risk Manager
x5
(Lon, Central, North,
South, NCSC)
Corporate Provider
Compliance
Inspector
x4
Key changes and developments include:

Establishing two lead roles – Quality Manager and Risk Manager to lead on the
development and implementation of a Quality and Risk Framework. The framework
will provide for the consistent management, assessment and reporting of risk and
assurance of the response to non compliance and corresponding regulatory action.
The framework also provides a structure to challenge the quality of regulatory
actions from registration through to judgements, report publication and the
effectiveness of action taken in addressing the impact of poor standards of care.

Development of a Quality and Risk Manager role to include an assurance function.
Line management of this role has also transferred to a central operations function to
strengthen independent and constructive challenge of regulatory decision making
by regional compliance teams.

Refocus on Corporate Provider Compliance through the establishment of a
corporate compliance team. The team will provide strategic oversight to the
performance and compliance of corporate providers to assist in the identification of
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risks relating to the quality and safety of service provision. This provides the
opportunity to horizon scan and proactively address emerging themes of non
compliance either with a provider or through sector led improvements; consider
systemic issues of a corporate provider as a whole rather than through repetitive
location based activity as well as focus the attention of regional regulatory activity to
areas of risk.

Enforcement Advice has been enhanced with two dedicated roles supporting the
regions risk panels, enabling regions to pursue enforcement action in a timely
manner and streamline enforcement processes.

Regulatory Risk and Quality Officer resource has also increased to strengthen the
interface with Operations Intelligence and the operational use of intelligence and
information collated from the myriad of data sources. For risk this will support the
work of identifying themes and trends in non compliance and regulatory activity as
well as the deployment of resources whilst for quality this role will be essential to
the oversight of risk across corporate providers.
2.6
The strengthening of the central resource will support the translation of the national
agenda and priorities relating to risk and quality at a regional level, improving
elements such as:






Functionality of regional risk and quality boards
Increased consistency in the application of the regulatory model across all regulated
sectors
Clear rationale for regulatory action and the use of regulatory powers selected
Timely and proportionate enforcement action in response to the identified impact on
service users
Use of intelligence and emerging themes and trends to help target inspection
activity
Oversight of the compliance of corporate providers and potential systemic issues
will help focus inspection action and ensure a proportionate response through either
location specific or provider level action
2.7
Figure 2 details a proposed model combining reporting and assurance
responsibilities and strengthened governance arrangements for Regulatory Risk
and Quality. The revised Risk & Quality Boards will provide a critical function in the
development of the assurance function at a team, regional and national level. A
pivotal group, the regional board will seek assurance on the effective application of
the regulatory model (through activity and action) as well as promoting the
accountabilities of Heads of Regional Compliance, Compliance Managers and
Compliance Inspectors in the management of risk and quality issues.
2.9
In addition to the key functions of the model at a regional level, the model also
offers a strategic oversight on the management of regulatory risk and quality
standards in relation to the application of the regulatory model. The Risk and
Escalation Committee and Audit and Risk Assurance Committees will receive a
strategic oversight of regulatory risk in the context of identified or emerging themes
and trends of non compliance, deployment of resources, use of regulatory powers.
Unlike the current arrangements the committee structures will move away from the
operational detail which regions will be accountable for and move towards what
does the information tell the CQC on regulatory performance, areas of highest risk
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and the assurance available in the management of these risks or the effectiveness
of the model.
Figure 2: Regulatory Risk and Quality Governance Arrangements – Proposed Model
Escalation of risks with Regions
maintaining oversight and
responsibility for regulatory
decisions whilst the supporting
governance structure (eg REC
and ARAC) seek further
assurance on the model,
strategic management
of risk and resource
deployment
Audit & Risk Assurance
Committee
Feedback of identified themes
and trends as well as potential
areas of focus inspections or
operational improvements
Risk & Escalation Committee
Regional Risk & Quality Board
Sub Region Risk & Quality Panel
Compliance Manager / Team Risk Register
Compliance Inspector Portfolios
2.9
Enhancing Regulation of Individual Sectors
In addition to the improvements that the revised structure for risk and quality offer internal
systems and regional frontline arrangements, the changes also develop the Commission’s
regulation of individual sectors.
2.9.1 NHS
The refocus of the risk panels supports tighter regulation of providers of persistent
non compliance or struggling performance as well as considering the quality of
regulatory decisions from registration to enforcement through to publication.
Over the next 2 years, there will need to be a specific focus on the remaining NHS
Trusts in the Foundation Trust pipeline. Aligned to routine regulatory activity, a
dedicated “assurance team” consisting of four compliance managers will work will
regional teams to ensure that the regulatory actions, decisions and judgements
associated with aspiring Foundation Trusts are robust. In addition this team will
work closely with Monitor, the DH and other stakeholders to identify, manage (within
the CQC’s powers) and escalate the risks as appropriate, of Trusts that fail to
become Foundation Trusts. The CQC’s role within this process will be to regulate
services in line with the required standards for quality and safety care.
2.9.2 Adult Social Care and Independent Healthcare
Over the last 12 months there have been a number of examples where the scrutiny
of corporate providers has been required for example Southern Cross and
Castlebeck as two examples. The establishment of a Corporate Provider
compliance team provides the opportunity for the regular review and oversight of
patterns of compliance and non compliance, consideration of other factors such as
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market behaviours - commissioning patterns and funding and for information to be
used proactively in focussing the remit of inspections as well as feeding emerging
themes into provider groups for engagement in sector led improvement.
2.10
Measures of Success
Key measures of success of the structure, its implementation and the differences that it
makes to regulation have been identified. These measures will exist at a Directorate level
as well as a macro indicator on the corporate score card. The corporate scorecard
currently identifies a number of risk and quality indicators which measure performance of
stages of the regulatory process. Additional indicators have been identified, the data
definitions and data collection needs to be finalised; these include:
Regional Metrics
 Number of location / providers identified as non compliant / compliant
 Number of locations / providers where the regulatory action proposed to the
Management Review Meeting is pursued
 Percentage of location / providers where the CQC’s first regulatory intervention is
successful in achieving compliance
Directorate Metrics
 All regions (inc Operational Improvement & Planning) have operational risk and
quality boards meeting on a monthly basis
 Proportion of locations / providers whose services are identified through the
judgement framework as having a major, moderate or minor impact on service
users
 Distribution of enforcement action by sector and by outcome
Corporate Metrics
 Distribution and effectiveness of enforcement action across sectors and in
addressing non compliance
 Correlation of inspection activity against themes and trends identified across
available information sources
3.
Next Steps
3.1 The Board are asked to agree the model
3.2 To embed the structure through the completion of recruitment and the delivery of the
identified key priorities at three, six and twelve months milestones.
Name:
Title:
Date
Louise Dineley
Head of Regulatory Risk & Quality
1 May 2012
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