Care Quality Commission€¦ · This final report has been prepared for the Audit, Risk and Assurance Committee at the Care Quality Commission. No party, other than the Care Quality

Care Quality Commission Third party review of CQC’s regulatory approach Final report

23 January 2013

This final report has been prepared for the Audit, Risk and Assurance Committee at the Care Quality Commission. No party, other than the Care

Quality Commission is entitled to rely on the Final Report for any purpose whatsoever and we accept no responsibility or liability to any other

party in respect of the contents of this Final Report.

© 2013 Deloitte LLP

The Audit, Risk and Assurance Committee Care Quality Commission Finsbury Tower 103 - 105 Bunhill Row London EC1Y 8TG 23 January 2013

Dear Sirs,

Third party review of the Care Quality Commission’s regulatory

approach

In accordance with the terms of the purchase order dated 10 September

2012 (the ‘Contract’), for the third party review of the regulatory approach

at the Care Quality Commission (‘CQC’), we enclose our final report dated

23 January 2012 (the ‘Final Report’).

The Final Report has been prepared for the sole use of the CQC and is

subject to the restrictions on use specified in the Contract. No party, other

than the Care Quality Commission is entitled to rely on the Final Report for

any purpose whatsoever and we accept no responsibility or liability to any

other party in respect of the contents of this Final Report.

The Final Report must not, save as expressly provided for in the Contract

be recited or referred to in any document, or copied or made available (in

whole or in part) to any other person.

The Audit, Risk and Assurance Committee is responsible for determining

whether the scope of our work is sufficient for its purposes and we make

no representation regarding the sufficiency of these procedures for CQCs

purposes. If we were to perform additional procedures, other matters

might come to our attention that would be reported to CQC.

We have assumed that the information provided to us and management's

representations are complete, accurate and reliable; we have not

independently audited, verified or confirmed their accuracy,

completeness or reliability. In particular, no detailed testing regarding the

accuracy of the financial information has been performed.

The matters raised in this report are only those that came to our attention

during the course of our work and are not necessarily a comprehensive

statement of all the strengths or weaknesses that may exist or all

improvements that might be made. Any recommendations for

improvements should be assessed by CQC for their full impact before

they are implemented.

Yours faithfully

Deloitte LLP

Deloitte LLP

2 Hardman Street

Manchester

M3 3HF

Tel: +44 (0) 161 832 3555

www.deloitte.co.uk

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (‘DTTL’), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk\about for a detailed description of the legal structure of DTT L and its member firms.

© 2013 Deloitte LLP 2 Care Quality Commission Third party review of CQC regulatory approach

3

Contacts and contents

The contacts at Deloitte in

connection with this report are:

Steve Bundred

Lead reviewer

Dr. Jay Bevington

Partner

Nicky Cooke

Director

Page

Introduction and scope 4

Executive Summary 7

Findings and commentary 11

Recommendations 36

Appendix 1: Terms of Reference 40

Appendix 2: Section 48 of the Health & Social Care Act 2008 43

© 2013 Deloitte LLP Care Quality Commission Third party review of CQC regulatory approach

Deloitte UK print A4 (21.00 cm x 29.70 cm)

Introduction and scope


5

Introduction and scope

Project scope

This report sets out the findings of our independent review of the

Care Quality Commission’s (‘CQC’) use of its investigation powers as

set out in Section 48 of the Health and Social Care Act 2008 in

relation to NHS Hospital Trusts and Foundation Trusts to provide

assurance to the Audit, Risk and Assurance Committee (‘ARAC’) of:

• the reasonableness and proportionality of CQC’s regulatory

activity using investigatory powers (and the procedures

underpinning those) using the cases noted as studies;

• the adequacy and proportionality of the use of investigation

powers; and

• where appropriate, to make recommendations regarding areas

for improvement.

The detailed terms of reference are included in Appendix 1 and the

scope is in line with the Purchase Order dated 10 September 2012.

Our review focused on three case study acute hospital trusts:

Barking, Havering and Redbridge University Hospitals NHS Trust

(‘BHRT’); University Hospitals Morecambe Bay NHS Foundation

Trust (‘UHMB’) and Basildon and Thurrock University Hospitals NHS

Foundation Trust (‘BTT’). CQC had undertaken an investigation at

both BHRT and UHMB, but although there had been a history of

regulatory concern at BTT the S.48 power had not been used. UHMB

and BTT are NHS Foundation Trusts and hence are also subject to

regulatory powers conferred upon Monitor.

We would like to thank CQC Board members, staff, and external

stakeholders for their engagement during this project.

Our approach

Our approach to delivering the project scope has consisted of:

1. Reviewing documentation which included:

• The results of compliance reviews, inspections and

investigations undertaken between April 2010 to

August 2012 for each Trust;

• CQC Judgement Framework;

• CQC Guidance about Compliance;

• CQC enforcement policy;

• Chronologies for each Trust prepared by CQC; and

• Relevant internal policies and Board and

management team minutes; and

• Other relevant information, including risk summit

minutes.

2. Conducting semi-structured interviews with key CQC

personnel;

3. Conducting semi-structured interviews with representatives

from the 2 of the Trusts;

4. Conducting semi-structured interviews with external

stakeholders including relevant SHAs, other healthcare

regulators including Monitor;

5. Analysing and evaluating the evidence;

6. Undertaking a feedback session with the ARAC on 30

November 2012 and Board on 12 December 2012. The

purpose of these sessions was to provide verbal preliminary

feedback on the results of our work; and

7. Designing and facilitating a 2hr workshop with the key

senior internal stakeholders in the CQC regulatory process

to discuss the key issues identified by our review and to test

and work through sensible, realistic and pragmatic actions in

response to recommendations made. This will take place in

early 2013.

Care Quality Commission Third party review of CQC regulatory approach

Introduction │Executive Summary │ Findings │ Recommendations │Appendices


6

Introduction (continued)

Introduction │Executive Summary │ Findings │ Recommendations │Appendices

Glossary of terms used throughout this report

CQC = The Care Quality Commission

BHRT = Barking, Havering and Redbridge University

Hospitals NHS Trust

UHMB = University Hospitals Morecambe Bay NHS

Foundation Trust

BTT = Basildon and Thurrock University Hospitals NHS

Foundation Trust

SHA = Strategic Health Authority

NPA = National Professional Advisors

HCC = The Healthcare Commission

S.48 = Section 48 of the Health & Social Care Act 2008

S.52 = Section 52 of the National Health Service Act 2006

SUIs = Serious Untoward Incidents

Structure of the report

Our detailed findings in respect of all these matters are set out below

under the following headings:

• Board oversight of regulatory activity;

• Preliminary decision making;

• Resourcing, methodology and conduct of the investigations;

• Reporting and impact of the investigations;

• Liaison with other stakeholders;

• Other issues.

Our findings comprise a description of what we found in relation to

each area along with an series of recommendations. A summary

statement is provided within the Executive Summary.

The findings have been mapped against the terms of reference in

Appendix 1.

Next steps

We recommend that CQC should create an Action Plan that

incorporates how CQC proposes to implement the various

recommendations detailed in this report, by when and how the Board

will monitor progress.

Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP


Executive Summary



Executive Summary

CQC was established in October 2008 and became operationally

active on 1 April 2009, when it merged with and replaced the

regulatory functions of the previous three regulators: the Healthcare

Commission; the Commission for Social Care Inspection; and the

Mental Heath Act Commission.

Section 48 of the Health & Social Care Act 2008 gives CQC a useful

and potentially very powerful strategic regulatory tool. CQC has

undertaken four investigations under S.48 of the 2008 Act, since NHS

providers were first registered on 1 April 2010, and has learned

rapidly from its experience. Therefore it has already taken many of the

actions we might otherwise have suggested based on our review of

the two case study investigations. However, there are further

improvements which can be made and CQC has not yet made use of

this tool to its best effect. We set out below our key findings and

recommendations.

Decision to investigate

In both cases where investigations have occurred the decisions to

investigate were properly authorised and can clearly be justified by

reference to criteria set out in the CQC Enforcement Policy applicable

at the time. They are also justified by the current Enforcement Policy

which differs in important respects. The new policy is a significant

improvement on its predecessor, but the criteria set out in both

polices are transparent and appropriate.

However, in neither case was an investigation strictly necessary. The

decision to investigate appears in both cases to have been prompted

more by frustration of the slow pace of improvement at the trust

concerned and the pressure of external events rather than any careful

consideration of what purpose an investigation might serve. As such,

we do not consider these decisions to represent examples of good

regulatory decision making.

We would advise that there should be stronger and clearer oversight

by the CQC Board of strategically significant regulatory decisions of

this kind. This would have the added advantage of ensuring that the

reasons for the decisions are fully documented and the decisions

properly recorded.

In the case of BTT, the decision not to launch an investigation was in

our view correct, and remains so, although an investigation could

nevertheless have been justified on the basis of the criteria applied

to such decisions at several points. BTT is an example of the

importance of allowing maximum flexibility for the exercise of

judgement within a transparent regulatory framework and the CQC

framework provides for this.

The key decision in respect of BTT rested on the fact that Monitor

has powers CQC does not possess. CQC has argued for additional

powers in its evidence to the Francis Inquiry and we believe these

are needed. However, we also believe that CQC could make more

creative use of the powers it currently has.

Resourcing of the investigations

The investigations were adequately resourced and the teams were

led by competent and experienced inspectors who were able to draw

on expert external and internal advice as required. The inspection

teams were large and in both cases included clinicians and a chief

executive. We regard all of this as good practice. We nevertheless

consider that it would have been better if all members of the team

had been present throughout the whole of the two investigations. It

would also represent better financial management if a budget for the

investigations had been determined in advance.

Executive Summary │Introduction │ Findings │ Recommendations │ Appendices

8 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP


Executive Summary (continued)

Methodology and reporting

The teams should have been given more time to allow them to

prepare for the investigations. They should have been more

thoroughly and formally briefed as to the purpose of the investigations

and the distinction between investigations and normal compliance

reviews. Also more thought should have been given to the terms of

reference and methodology adopted with this distinction in mind. As it

was, the investigations were undertaken and reported in a way which

was too similar to normal compliance reviews. In their own terms,

they were well conducted and served a useful purpose, but they

revealed very little about the two trusts that was not already known.

The results were therefore sub-optimal. The perceived benefits also

came at a high cost to the trusts themselves.

In particular, in order to get behind the concerns that are likely to

prompt an investigation and ensure that wider systemic, governance,

leadership and cultural issues are adequately addressed, CQC needs

to go beyond the outcome standards used for compliance reviews in

approaching both the conduct and the reporting of investigations. We

understand that in future investigation reports will be more clearly

referenced to the original Terms of Reference. We applaud this. We

also consider that it would be more helpful if recommendations

contained in investigation reports were fewer in number, more clearly

focused on the key issues and prioritised wherever possible.

9

In order to conduct effective investigations which address wider

systemic issues or worries about leadership, governance and

culture, CQC needs to develop appropriate methodologies which

would provide guidance to staff undertaking investigations of this

kind. In particular, CQC needs to be able to articulate a view about

how to drive improvement in an acute hospital trust where

leadership, governance and cultural issues are at the core of its

concerns.

We believe that CQC needs to understand and articulate at all levels

that S.48 of the 2008 Act confers upon it a very broad and strategic

power. We are not persuaded that the new Framework for

Investigations and the Decision to Investigate guidance fully reflect

this, but both represent a significant advance.

We do not have any concerns about the judgements expressed in

the investigation reports concerning the services provided to

patients, which were accepted as valid by the trusts. We

nevertheless consider that the Quality Assurance arrangements for

reports of this kind could usefully be strengthened.

We consider that CQC could usefully adopt the practice of other

regulators in making known its concerns about a regulated body. In

particular, we believe it should consider engaging more directly with

boards.


Introduction │ Executive Summary │ Findings │ Recommendations │ Appendices



Executive Summary (continued)

Other issues

We have felt it necessary to comment in this report on a small number

of matters that arose during the course of our review which were

beyond our terms of reference. The matters we have felt it appropriate

to include in our report are as follows:

• CQC should give careful thought to how it engages with local

authorities, given their new powers and responsibilities in relation

to health;

• We consider that CQC should question its generic approach to

inspection;

• CQC could benefit from having greater clarity about the role of its

National Professional Advisors; and

• more attention needs to be paid by CQC to downward and

horizontal communication with its staff.

Introduction │ Executive Summary │ Findings │ Recommendations │ Appendices



Findings and commentary


Findings and commentary

Summary of

contents 1. Board oversight of regulatory activity 13

2. Decision to investigate 15

3. Resourcing, methodology and conduct of the investigations 21

4. Reporting and impact of the investigations 27

5. Liaison with other stakeholders 32

6. Other issues 34

12 Care Quality Commission Third party review of CQC regulatory approach

Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices


1. Board oversight of regulatory activity

1.1. Strategic versus operational power:

The use of Section 48 powers have been considered an operational matter within CQC, but the powers are strategic

in nature.

The CQC Board delegates all regulatory decisions to the Chief Executive so that it can hold the

Chief Executive and the Executive team to account for delivering CQC’s strategic aims and

objectives. This reflects a proper understanding of the distinction between strategic and operational

roles and of the clear responsibility of the Board for strategic leadership and decision making.

However, we would comment that some regulatory decisions may be strategic as well as

operational; and we consider that a decision to exercise the S.48 powers falls within this category.

There are no widely recognised criteria determining what constitutes a strategic regulatory decision.

It is a matter for judgement, but we would suggest that among the tests to be applied are:

• whether the decision would commit a significant amount of the organisation’s resources and

involve a level of activity not envisaged in the originally approved budget, which might thereby

impact on other planned activity;

• whether the decision would require the exercise of novel or unusual powers and hence involve a

greater than usual risk of poor judgement or decision making;

• whether the decision might lead the regulator into commenting on the actions (or inactions) of

bodies it does not regulate (such as the SHA or commissioners) and hence impose a risk of

damage to relationships with key stakeholders; and

• whether the decision would attract a high level of media and/or political interest, and hence

involve a more than usual degree of risk to reputational damage.

Satisfying any of these tests would in our view make it more likely than not that the decision should

be regarded as strategic and it appears to us that the exercise of the S.48 powers satisfies all of

them.

.

Deloitte commentary:

We note that CQC have delegated

the decision to conduct an

investigation under S.48 to the

Chief Executive on this basis that

this is an operational matter.

We would question this premise as

we consider the decision to

exercise S.48 powers to be a

strategic regulatory decision.

We consider that both the Board

and senior management of CQC

need to exercise stronger oversight

of strategic regulatory decision

making and that there should be

better and fuller recording of

strategic regulatory decisions.

13

* Recommendations are highlighted in bold. In addition, actions agreed at the workshop are included in this section.




1. Board oversight of regulatory activity

1.1. Strategic versus operational power (continued):

The Board at CQC were informed, but not involved in the decision to exercise S.48 powers in line with the Scheme of

Delegation

We have considered possible arguments which might be advanced in opposition to this conclusion

(although it is worth noting that no such arguments have been put to us by CQC staff). In particular

we are mindful of the importance that regulators rightly attach to the reality and the perception of

their independence, both from the bodies they regulate and from the possibility of political influence.

We have observed that the latter is secured within CQC by substantial delegation of regulatory

powers. In principle, a high level of delegation is good practice, but we would question whether there

is adequate oversight by Board members and senior management of the exercise of delegated

functions. CQC staff do not exercise their powers in a personal capacity. Unlike doctors, police

officers or some other professionals, they are not personally liable for their actions. The regulator of

the quality of health and social care provision is CQC itself, operating through its Board which is

appointed by and accountable to the Secretary of State. All the regulatory functions are therefore

vested in the Board and delegated by it to CQC officers only to the extent that the Board considers

appropriate, which may change over time or vary in relation to particular issues.

Although the CQC Board was informed by the Chief Executive of the decision to initiate

investigations soon after the decisions were taken, there was no prior discussion with the Board

about the likelihood of such actions or their possible implications. There was also no subsequent

detailed discussion by the Board of the investigation reports and the wider lessons to be learned

from them, although such discussion did take place within CQC’s management. As these decisions

were clearly matters for the Chief Executive, under the Scheme of Delegation, there was no breach

of procedure in this respect; however we would observe that within other regulators of which we

have knowledge and experience there would be stronger and clearer oversight by the Board of

decisions of this kind. Indeed, it is unusual that the CQC Board has not reserved to itself a decision

to exercise the powers given to it under S.48 of the 2008 Act.

Deloitte recommendations:

1. The Board should identify

those regulatory matters it

considers to be strategic.

2. Decisions relating to these

powers should be reserved to

the Board.




2. Decision to investigate

2.1. Evidence and propriety of decision to investigate :

In line with the Scheme of Delegation the Chief Executive, on advice from the Director of Operations, made the

decision to investigate at the two case study trusts. This advice was not documented.

The current CQC Scheme of Delegation, dated March 2012, clearly delegates to the Chief Executive

(Annex 1, page 40, paragraph 45) the decision to order an investigation under S.48 of the Health

and Social Care Act 2008 “after receiving advice from the Director of Operations, Deputy Directors

of Operations or Heads of Regional Compliance”.

We have been advised that its predecessor(s) documents contained identical, or essentially the

same, provisions and we are satisfied that the two investigations we have focused on were properly

authorised by the then Chief Executive in accordance with these arrangements. We have also been

assured that the Chief Executive had at no time prior to our review been advised by the Director of

Operations, or others referred to in the Scheme of Delegation, to initiate an investigation at BTT,

although active thought had on occasion been given to this possibility by the relevant CQC staff.

However, we have been unable to examine the detailed advice that was received by the Chief

Executive at the time the two investigations were decided upon, although we have seen an e-mail in

relation to UHMB, which recommends the Chief Executive authorises an investigation. The detailed

advice, which lays out the reasons for the investigation does not appear to have been given in

writing, or if it was, this cannot now be recalled by those involved and no record of it can now be

traced by the CQC staff who have been supporting us in this review.

In consequence, the reasons for conducting an investigation in the two cases we have looked at,

and in the case of BHRT the issues which the investigation was intended to shed light on, can now

only be inferred from the memory of those involved, the approved terms of reference and the

previous history of compliance activity at the two trusts.

We would comment that if the Board were to withhold the decision to investigate as discussed in

section 1, some of the issues we raise above would also be addressed. There would be a paper to

the Board setting out the reasons for the recommendation and a minute of the Board discussion

recording the reasons for its decision. This would then also enable the reasons for the decision to be

clearly matched to the terms of reference of the investigation and to the investigation report.


We consider it would be preferable

for there to be a clear written record

of the reasons for a

recommendation to investigate and,

if different, the reasons for its

acceptance. While providing better

protection for all those involved in

the decision making process, and

for the reputation of CQC itself, this

would have the added advantage of

ensuring a clear audit trail between

the reasons for the decision, the

approved terms of reference and

the substance of the investigation

report

Recommendation:

3. The decision to carry out an

investigation under S.48,

together with the reasons for the

recommendation should be

made in writing. The final basis

of the decision should be clearly

documented and both should be

retained.





2.2. Criteria for an investigation

The Enforcement policy which includes the criteria for an investigation was updated in April 2012. We consider this

version to be an improvement to its predecessor as it more clearly reflects the strategic nature of the S.48 powers.

The terms of reference for the two investigations refer to them as satisfying the criteria for an

investigation set out in Appendix A of the CQC Enforcement Policy. This is the Enforcement Policy

dated October 2010 which was applicable at the time. The current Enforcement Policy, dated April

2012, sets out the criteria for an investigation in Section 5 and Appendix D. Although the provisions

of the two documents are similar in some respects, there are important differences in the wording

and we have therefore tested the decision making not just against the rules that were in force at the

time but also against those that currently apply.

We consider that the later version of the policy is a significant improvement on its predecessor in

that the criteria are expressed with greater clarity and are more in keeping with the apparent intent of

the 2008 Act that investigations should look more widely than routine compliance activity. The

provisions contained within the earlier document nevertheless appear to be appropriate having been

adopted as the criteria used by the predecessor body, the Healthcare Commission.

Both give CQC a wide degree of discretion, recognising that the circumstances will differ in each

case and apparently similar circumstances may nevertheless warrant different judgements about the

value of an investigation. The current Enforcement Policy states that an investigation is appropriate

when “one or more of the following criteria are met:

• Providers have failed to respond to conventional enforcement activity with the required

improvements in a reasonable timescale.

• Further enforcement activity will result in adverse consequences for people using services, for

example as a result of geographical isolation.

• There are indications that there are capacity issues either within the provider itself or across the

local care system, which impede the required improvements.

• We become aware of evidence of a significant problem affecting a whole local care system.

• Local commissioning and performance management authorities are not effectively supporting the

required improvements in terms of leadership, skills and expertise.

• Broader systemic failures which lie outside the remit of our routine inspection and enforcement

powers.”


We have examined the extent to

which the decisions taken satisfied

the criteria set out in the

Enforcement Policy dated October

2010 and October 2012 and have

concluded that in both the case

study investigations they did or

would have done so.

We have also concluded that a

decision to launch an investigation

at BTT could have been defended

at various points in time by

reference to the approved criteria,

including the currently approved

criteria, although given the

appropriately wide degree of

discretion accorded to CQC, at no

point would an investigation have

been required at any of the three

trusts.





2.2. Criteria for an investigation (continued)

The emphasis of these criteria and of the provisions of S.48 itself is that the investigation power is

intended to permit CQC to examine systemic failings, including failings in bodies it does not regulate,

and/or to get behind poor outcomes for patients at an individual provider to look at the governance,

leadership and cultural issues which may be contributing to these poor outcomes. It is a power

which enables CQC to conduct an investigation with a focus which goes beyond the outcome

standards which are at the core of normal compliance reviews. This is reinforced in the new

Framework for Investigations which has a section (pages 5-6) headed “Differences between

regulatory compliance work and an investigation”.

The provisions in Appendix A of the October 2010 Enforcement Policy were less strategic in their

focus. At the time the decisions were taken to launch an investigation into BHRT, and the later

decision to conduct an investigation at UHMB, the policy in force was that:

‘Factors which might trigger us to commence a formal investigation include:

• A higher number than anticipated of unexplained deaths.

• Serious injury or permanent unnecessary harm to people, whether physical, psychological or

emotional

• Events which put at risk public confidence in care provided, or in the NHS, independent sector or

adult social services generally.

• A pattern of adverse outcomes for people or other evidence of high-risk activity.

• A pattern of failures on the part of a service or services; or team or teams, or concerns about

them.

• Allegations of abuse, neglect or discrimination affecting people who use services, particularly

those less able to speak for themselves or defend their rights.’

The absence of documentation recording the reasons for the decisions to investigate has prompted

us to study the chronology of events in an attempt to match the timing of the decision to the

emergence of information satisfying the criteria above. The following section outlines the key

findings from our review in relation to decision to investigate or not at each of the case study trusts.


Although the two investigations

were properly authorised and

justifiable, the decision to

investigate appears in both cases to

have been prompted more by a

perceived need to be seen to be

taking action in response to

external events rather than any

careful consideration of what

purpose an investigation might

serve. As such, we do not consider

these decisions to represent

examples of good regulatory

decision making.

We consider some of the alternative

actions that CQC could have

considered to achieve the

objectives of the investigations

based on our experience of working

with other regulators in Section 4.2.





2.3. Our review of the decision to investigate for each case study

The issues at BHRT met the CQC criteria to investigate at the point the investigation was announced, however the

timing of the decision to investigate appears to have been heavily influenced by external pressures:

In the case of BHRT there had been a long history of concern about the trust dating back to before the creation of CQC. It was

registered in April 2010 with eight conditions. On 24 February 2011, CQC issued four Warning Notices following an inspection at

Queen’s Hospital in January 2011 which was assessing progress against the registration conditions. Further inspections were

undertaken at both Queen’s and King George Hospitals in late March and early April of 2011 to assess compliance with these notices.

The reports of these inspections were published in July 2011. They noted improvement in some areas and deterioration in others, which

resulted in a number of further compliance actions being imposed. But by this time the investigation was in progress.

The failure to detect more rapid improvement since the Warning Notices were issued was clearly a key element of the decision to

investigate. Nevertheless, it was also explained that the increasing level of publicity that BHRT was receiving was a factor in the

decision to commence a formal investigation, as this met one of the criteria in the 2010 Enforcement Policy: an “event which put at risk

public confidence in care provided, or in the NHS … generally”. For example, although not specifically cited by CQC staff, the House of

Commons adjournment debate secured by a prominent local MP, Margaret Hodge, on 22 June 2011, attracted considerable local and

national publicity.

Although the investigation at BHRT was primarily prompted by understandable frustration within CQC at the slow pace of improvement

in relation to the concerns there had been about the trust for several years, the timing of the decision appears to have been heavily

influenced by these external pressures.

This view is reinforced by the fact that as a result of the history of concerns the Strategic Health Authority, NHS London, had

orchestrated the appointment of a new, experienced Chief Executive in February 2011; the same month the Warning Notices were

issued. She took the Warning Notices very seriously, despite concerns among some of her staff that they overstated the problems.

Therefore, at the point the investigation was announced an action plan for improvement had already been devised and was in the

process of being implemented.

We understand that within the SHA there was a feeling that the new Chief Executive should have been given time to make the changes

necessary to effect improvement rather than being distracted by an investigation at such an early point in her tenure. This would have

been a reasonable view for CQC to take also. It is a judgement of the kind that all regulators are commonly called upon to make and it is

a view that CQC has in fact taken at another trust facing similar challenges. But CQC did not feel able to take this view about BHRT in

the circumstances prevailing in June 2011.





2.3. Our review of decision to investigate for each case study (continued)

The investigation into UHMB satisfied the criteria set out in the Enforcement Policy applicable at the time and was

justifiable. However, the decision to investigate appears to have been more a reaction to events than part of a

considered strategy to secure improvement for patients; and there may have been an earlier missed opportunity.

UHMB was registered by CQC in April 2010 without conditions and was authorised by Monitor as a Foundation Trust in October 2010.

Although there had been previous concerns about the Trust including 12 Serious Untoward Incidents (‘SUIs’) over two years, five of them

relating to maternity services, it was believed at the time that the underlying issues had been addressed. But during 2011 it became

apparent from several sources, including a coroner’s letter to CQC arising from a child death and the discovery that the Trust had withheld

relevant information from regulators during the registration and FT authorisation processes, that serious problems persisted. This was

confirmed by a compliance review which reported in September and resulted in a Warning Notice being issued to the Trust.

As a result, in October 2011, UHMB was declared by Monitor to be in significant breach of its terms of authorisation as an NHS

Foundation Trust. Monitor then commissioned or instructed the Trust to commission: a peer review of maternity services from clinicians at

the Central Manchester University Hospitals NHS Foundation Trust; a review of governance, including clinical governance; and a further

report which related to a significant backlog in outpatient follow-up appointments. These became available to Monitor in December 2011

and confirmed that the problems at the Trust were more deep-seated than the concerns about maternity services that had originally

prompted intervention. When shared with the Trust they caused the resignation of the Chairman. CQC was informed of this on 13

December 2011 and immediately decided to launch an investigation.

On 6 February 2012, the day the investigation began, Monitor intervened at UHMB, using powers granted to it under section 52 of the

National Health Service Act 2006. It removed the Acting Interim Chair of the Board and appointed Sir David Henshaw as Chair to drive the

recovery of the trust; it required the trust to appoint a Turnaround Director and to create a Programme Management Office to support the

director; and appoint a Chief Operating Officer, acceptable to Monitor, to run the day to day activities of the trust across all of its sites. In

the light of this it is not clear to us what the investigation was intended to add, although we are satisfied that the investigation team took

pains not to duplicate the work of the reviews commissioned by Monitor. We also accept that the focus of the CQC investigation was on

outcomes for patients whereas Monitor’s focus was on leadership and governance; however by December 2011 it was already well

known that outcomes for patients at UHMB were poor, which was why Monitor had taken action under its S.52 powers and CQC had

issued a Warning Notice. Indeed, CQC issued a further Warning Notice on 25 January 2012, arising from an inspection conducted at the

Royal Lancaster Hospital on 21 December 2011.

It is worth noting that Monitor also commissioned a review by KPMG of the decision to grant the trust FT status which found that the

issues of concern should have surfaced at the time the FT application was being considered. It is therefore possible that a CQC

investigation at a much earlier stage might have proved useful. Due to the short time period that CQC had been established, there had not

been sufficient compliance activity or associated enforcement action to justify an earlier investigation. CQC was aware of the SUIs in May

2009 and of the fact that UHMB was a statistical outlier in respect of complaints and mortality, so might have felt able to justify an earlier

investigation on these grounds, but this has to be considered in the context of the maturity of the organisation at that time.





2.3. Our review of decision to investigate for each case study (continued)

A decision to launch an investigation at BTT could have been defended at various points in time by reference to

the approved criteria, although given the appropriately wide degree of discretion accorded to CQC, at no point

would an investigation have been required.

As part of our review, we have been made aware that there were at least two occasions on which an investigation at BTT might have

been justified by concerns about the quality of its services.

The first was prior to registration and has therefore not been considered here as it is outside our scope, but the second arose in June

2012 when the possibility of an investigation was actively considered by CQC staff and a judgement was made that this should not be

recommended. As a result of the concerns previously identified by the Healthcare Commission (‘HCC’) and a prosecution of the trust by

the Health and Safety Executive following a legionella outbreak, the trust had been registered in March of 2010 with five conditions and

these had been followed up by compliance reviews in May and July of that year which had identified moderate concerns and resulted in

compliance actions being imposed. Arising from concerns about SUIs a fuller reactive review of Basildon Hospital was conducted in

September 2010 which identified major concerns in two areas. Over the course of the next year and a half, during which time a further

seven inspections took place, a pattern then developed of problems emerging in one area which the trust took effective action to

address, only for identical or other problems to emerge elsewhere within the hospital. This had been the subject of several risk summits,

and meetings with the trust at a more senior level than that associated with normal compliance work, but the pattern had not been

broken.

By June of 2012 therefore, when a further inspection took place which resulted in a Warning Notice being issued the following month,

there was a real and well evidenced concern within CQC that improvements that had often been observed within the trust over many

months had not proved to be sustainable and the trust had at no time been fully compliant with all outcome standards. Compliance staff

and some professional advisers therefore considered that an investigation was called for. This advice was taken very seriously by the

Director of Operations but rejected because of the substantial involvement that Monitor already had in addressing the concerns at the

trust and the action it had already taken.

We consider that this judgement was, in all the circumstances, the right one to make, but we would not have been overly critical had it

gone the other way. It was made following a proper review of the position and reflected CQC’s recognition that Monitor was in the best

position to take action and had the most appropriate powers to do so. We have not examined whether the action actually taken by

Monitor was sufficiently swift and effective, but we note that there is now an almost entirely new leadership team, at both executive and

non-executive level, at BTT, in which the respective regulators appear to have a high degree of confidence. Although there are

continuing problems at the trust, sufficient still to satisfy some of the criteria for an investigation, there is a general view that it is now

moving in the right direction.




3. Resourcing, methodology and conduct of the investigations

3.1. Resourcing the investigations

The investigations were resourced by experienced teams, who could draw on specialist internal and external

resources.

CQC took the decision to disband the national investigations team that existed within one of its

predecessor bodies, the HCC, and with it the methodology for such investigations adopted by HCC,

at an early stage in its life, although it did maintain the criteria to investigate within the 2010

Enforcement Policy. The decision was controversial internally at the time and remains so. We do

not question this decision, not least because we recognise that CQC began life with fewer resources

and more responsibilities than its predecessor bodies and therefore has to use its resources more

sparingly. However, a regional based approach with far fewer investigations than previously

undertaken by HCC had the effect of diluting the inherited experience and expertise. We understand

that HCC undertook fifteen investigations in the four year period from 2005 to 2009, whereas CQC

has undertaken only four in the three years from 2009 to 2012.

The investigation at United Lincolnshire Hospitals NHS Trust was the first within an acute hospital

setting that had been undertaken by the CQC and the investigation at BHRT commenced while the

United Lincolnshire investigation was still in progress. Neither had been envisaged at the time the

CQC budget and operational plans for 2011/12 were set and so prior to the decision to launch an

investigation at BHRT (the first of our two case study investigations) there is no evidence to support

that there had been adequate consideration as to how it should be resourced or conducted.

In consequence, there was no approved budget for either of our two case study investigations, but

equally there was no resource constraint. We understand that CQC has quantified the direct cost of

the investigation at BHRT as being £88,831. We have not audited this figure so cannot verify it, and

we note that it refers only to the direct cost rather than the full cost of the investigation. We consider

that it would represent better financial management if a budget for the investigations had been

determined in advance.

The real constraint was the expectation that the investigation team, at least in the case of BHRT,

would report no later than 16 weeks after the investigation had been announced. This was a tight

timescale but reflected the fact that the CQC approach to investigations was, in our view

appropriately, less intensive than that of HCC. The latter typically took between six and eight months

to complete, although we note that the UHMB investigation report was also published nearly six

months after the investigation began.


Within their own terms, and set

against the criteria applicable at the

time, the two investigations we

have looked at were well led by

highly competent CQC staff and

were conducted by teams made up

of experienced and suitably

qualified people. In both cases they

included people external to CQC

with clinical or senior administrative

experience in the NHS.

The short timescales imposed on

the investigation teams to

commence the site visit once the

investigation was announced had

consequences for the way in which

the investigations were conducted

both in relation to the resource

available and the methodology

used.





3.1. Resourcing the investigation (continued)

The tight timescale imposed on the investigation impacted on the resources available. For example,

in the case of BHRT it proved impossible to assemble a sufficiently senior investigation team who

could devote two full weeks (the length of the site visit) to the investigation. This meant that in the

first week there were 15 or 16 team members involved and in the second 8 or 10. There was some

overlap, but several of those engaged during the first week were not involved in the second, and vice

versa. Hence there was no clearly defined team that collectively shared and challenged the

evidence emerging from the investigation and took ownership of the final report. This approach

places an unusually high premium on the internal quality assurance arrangements within CQC and

the wisdom and judgement of the Compliance Manager responsible for leading the investigation

team.

There was also pressure for the team to get on site as quickly as possible at UHMB, but in this case,

although there were some team members who contributed only briefly, there was a core team

present throughout the whole period including expert external advisers. The team at UHMB

comprised 13 or 14 people.

In both cases, there were daily briefings for the team on site each evening on the issues that had

arisen during the day and the report was shared in draft with some of the team members for their

comment, which included the external clinical advisors at BHRT. We consider that these should

broadly be the expected arrangements for any future investigation.

Overall we would conclude that within their own terms, and set against the criteria applicable at the

time, the two investigations we have looked at were well led by competent and experienced CQC

staff and were conducted by teams made up of experienced and suitably qualified people. In both

cases they included people external to CQC with clinical or senior administrative experience in the

NHS. The team leaders also had access to legal advice and communications experts. We comment

below on the impact of the investigations at the trusts concerned but we have heard no major

concerns about the composition of the investigation teams or the validity of the conclusions they

reached, and we have heard very positive comments about specific team members.


4. Determine in advance a budget

for the investigation, which

includes both the direct costs of

the investigation, for example

expenses, fees to external

experts and the internal staff

costs.

5. Put in place a dedicated team

for each investigation, who are

involved across all stages of the

investigation. The team should

be involved in reviewing relevant

sections of the draft report.

6. The clinical and non clinical

external advisors should review

and comment on the findings

draft investigation reports.





3.2 Methodology

There was limited guidance available to the investigation teams at the time of the case study investigations. CQC

have subsequently made significant improvements in this area, but there are further improvements that can be

made.

At the time the two case study investigations took place, there was no investigation methodology in

place within CQC. The planning and design of the methodology was mainly left to the two lead

investigators with only limited central support. For example, whilst both had previous experience of

undertaking investigations as part of investigation teams within the predecessor regulators, they

were not provided with specific training in relation to the conduct of an investigation within CQC or

any formal briefing (albeit: they were both provided with some background information in relation to

the trust itself and they both arranged to speak to the relevant compliance teams). Further, the

timetables under which the two case study investigations were conducted provided no opportunity

for detailed consideration of the most appropriate methodology, and we have seen no evidence of

this matter being discussed within any governance forum or among the most senior staff of CQC.

Ultimately, as we were told by a number of different sources, this resulted in the investigation teams

having to develop the methodology themselves, although UHMB did draw upon the approach used

at BHRT. This does not invalidate the conclusions they reached in either case, but it did in practice

limit the scope of the investigations. In particular, it did not permit the investigations to be designed

in such a way as to clearly distinguish them from normal compliance reviews and to enable them to

address the criteria itemised in the Enforcement Policy as laid out in Section 2.2, although we accept

that they satisfied the criteria applicable at the time.

Our observation is that while both of the investigations we looked at served a useful purpose, their

utility would have been strengthened by a clearer initial view of what they were intended to achieve

and more thought being given to how best to identify and evidence the actions needed to address

these issues. For example, we have heard differing views of the extent to which the two

investigations were able to address underlying cultural issues within the relevant trusts, but from our

review of the information already available to CQC at the time each investigation was authorised,

and from our examination of the investigation reports themselves, our impression is that the

investigations did not tell CQC much that it did not already know and were not designed in a way

which would enable them to do so. We consider that more might have been achieved had the

investigations been framed with clearer regard to the issues itemised in the section of the new

Enforcement Framework for Investigations headed ‘Differences between regulatory compliance

work and an investigation’.


There was no investigation

methodology in place at the time

the two case study investigations

were undertaken.

The timetables that had been set to

be on site quickly once the

investigation was announced,

meant that there was limited

opportunity to develop a more

considered methodology which

would be able to address some of

the wider concerns at the trust. For

example, underlying cultural issues

or wider health economy concerns.





3.2 Methodology (continued)

For example, we note that the terms of reference of the investigation at BHRT did not require any

consideration of the financial difficulties faced by the trust and the extent to which this was impacting

on concerns about staffing, although there is mention in the report of the scale of the deficit being

part of the context. Further, in both cases the contribution to poor clinical practices played by poor

relations with commissioners was clearly an issue, and was touched upon in the report, but did not

feature strongly in the recommendations. Indeed it is not clear to us how this issue could have been

addressed in any depth without considerable thought being given beforehand to the criteria against

which the relationships would be judged.

Equally, it is apparent from our review that the pressure on maternity services at both BHRT and at

BTT needs to be seen in the context of substantial population growth and a rising birth rate affecting

hospitals throughout East London and Essex, but an investigation of these matters would require a

very different approach to the one adopted.

In respect of a number of the concerns we identified, CQC has already made significant advances

since the investigations were conducted, and has continued to do so since our review was

commissioned. Specifically:

• it has reviewed the criteria for launching an investigation, expressed these criteria in more

strategic terms, to match the apparent intention of the 2008 Act, and published them in a revised

version of its Enforcement Policy;

• it has convened meetings of those involved to consider the lessons learned;

• it has published a detailed handbook for staff titled “A framework for investigations”;

• it has supplemented this with a document for staff titled “Decision to investigate guidance”; and

• during the course of our review it has given close consideration to the possibility of an

investigation at BTT but has, for the time being at least, decided instead to adopt a different

approach which is in our view more likely to drive improvement for patients as quickly as possible

while in no way understating the degree of CQC’s concerns about the trust.


There has been significant

improvement in the guidance and

policy documents in relation to

investigations, since the 2 case

study investigations were carried

out. For example, CQC has

recently (September 2012) adopted

a new Framework for Investigations

which addresses some of the gaps

in previous arrangements which

have been evident from our review,

especially in relation to the

guidance available to staff.

However, the new guidance does

not contain what we would

recognise as a methodology for

conducting investigations aimed at

systemic or leadership and

governance issues.





3.2 Methodology (continued)

We have already commented that we regard the new Enforcement Policy as a significant

improvement on its predecessor. We also consider that the Framework for Investigations and the

Decision to Investigate guidance will prove helpful to staff. However, we have a concern about the

degree of consistency between these three documents and we would comment that none of them

contain what we would recognise as a methodology for conducting investigations aimed at systemic

or leadership and governance issues, along the lines of that set out in Part 2 of “Essential standards

of quality and safety”, CQC’s guidance about compliance.

The Decision to Investigate guidance could more usefully reflect the fact that an investigation might

not arise directly from compliance activity at a particular regulated body, but might result from issues

arising at a number of bodies. In the circumstances alluded to above, for example, it would be open

to CQC to investigate pressure on maternity services across the whole of a region or sub-region and

the likelihood of the supply of midwives matching future demand. In our view, both the new

Enforcement Policy and the Framework for Investigations are clearer in their recognition that the

S.48 power is very broad and permits CQC to undertake investigations that are not directly

connected to its enforcement activity. This understanding of the nature of the power needs to be

clearly expressed in all communications to staff.


7. Develop a methodology/

toolkit which investigation teams

can draw upon when scoping

and planning an investigation. In

particular these should include

guidance on how to investigate

governance and leadership from

Board to Ward.

8. Further consider how CQC can

use the work from other

regulators and in relation to

Monitor look at the where the two

regulatory frameworks meet and

how the two can be dovetailed to

prevent duplication.

9. Ensure that staff understand

the strategic nature of the

investigation powers and the key

differences to a compliance

review.

10. Ensure all communication to

staff (all 3 policy documents)

clearly express the nature of the

S.48 power.





3.3 Quality Assurance processes

CQC did have a Quality Assurance process in place for the two investigations and whilst there were

no problems in these particular instances, we nevertheless consider that CQC could benefit from a

more rigorous approach to the quality assurance of reports of this kind.

As part of the internal process, the draft reports were initially reviewed by the Regional Director or in

the case of UHMB, the Head of Regulatory Risk and Quality. There was then a second review

undertaken by senior managers within CQC including the Director of Operations and the Head of

Regulatory Risk and Quality who were able to question the evidence base for some of the

judgements reached and to satisfy themselves that the degree of concern expressed was

proportionate in the context of other CQC interventions. The draft reports were also sent to the Trust

to check for factual accuracy.

All of this proved effective in ensuring that the reports were of generally a good quality, but the large

number of recommendations and their lack of a clear focus does not seem to have been questioned

through this approach.

If CQC is to undertake more complex investigations in the future we consider that there would be

value in adopting the practice of some other bodies with the draft reports being subject also to a

rigorous peer challenge from suitably experienced individuals unconnected with the investigation.


11. For each investigation, as

part of the quality assurance

process, ensure the draft report

is reviewed and challenged by a

suitably experienced manager

who is independent of the

investigation.




4. Reporting and impact of the investigations

4.1. Reporting

The reports grouped the findings by reference to the outcome standards, which limited the opportunity for a more

strategic narrative, which could explain the underlying causes of the issues at each Trust.

Many of our observations set out above on the methodology used for the two investigations arise

directly from our consideration of the way they were conducted and the reports were structured. The

two investigations we have looked at were conducted by reference to the outcome standards used

for compliance reviews and the reports and recommendations were grouped under these same

headings. This has a clear advantage in that the approach is familiar to CQC staff and did not

require any special training or preparation in advance of going on site, which was clearly important

given the tight timetable. However, this benefit is outweighed, in our view, by several disadvantages.

First, as the reports had the look and feel of a more intensive compliance review, there was no

obvious reason why they should be taken any more seriously by the trusts concerned than they

would a normal compliance review report. Indeed there is a good reason why they might have

regarded the investigations as being less significant, since the recommendations contained within

them are not associated with any enforcement powers. At both trusts there were Warning Notices in

force at the time the investigations were authorised and outstanding Compliance Actions from earlier

regulatory activity. These were mandatory for the trusts; the recommendations in the investigation

reports were not.

Second, the outcome standards against which the investigations were conducted and reported apply

only to regulated bodies but, as we have already noted, a specific purpose of the S.48 power is to

allow CQC to examine wider systemic issues which go beyond regulated bodies. It is not clear to us

how this could have been satisfactorily achieved using the approach adopted.

Third, even within the regulated trusts a clear purpose of the power to conduct investigations is to

examine weaknesses in governance, leadership and culture which are impacting on users of

services. We have been advised that this was approached, using the compliance framework,

through examining compliance with outcome 16. This refers to the way in which providers assess

and monitor the quality of service provision. However, in interviews CQC staff have acknowledged

that there is a distinction to be made between clinical governance and corporate governance and

leadership in its wider sense, and that outcome 16 focuses on the former. We note that at no time

have concerns in respect of outcome 16 been expressed through compliance activity at BHRT,

although there were clearly weaknesses in corporate governance which have prompted action to

remedy them.


The reports were structured in such

a way that gave them the look and

feel of a more comprehensive

compliance review, which was in

part due to the methodology used.

This meant that they did not provide

additional analysis and information

that would go significantly beyond

the remit of a compliance review,

which S.48 powers are designed to

address.

There were a significant number of

recommendations raised within

both of the investigation reports (79

at BHRT and 40 at UHMB), which

were not prioritised. We consider

that it would have been more

helpful and effective for the

attention of the trusts concerned to

be focused on a small number of

issues which had been identified as

underlying causes.





4.1. Reporting (continued)

Moreover, there have been major concerns expressed in relation to outcome 16 at BTT where no

investigation took place. To address the wider governance and leadership issues directly it would, in

our view, have been necessary to adopt a methodology that had this objective specifically in mind.

We would comment too that in our view the S.48 power exists to enable CQC to report on the things

that really matter and which would not emerge with the same clarity from an intensive compliance

review. However, the BHRT investigation report contained 79 recommendations and the UHMB

report 40. In neither case were they clearly prioritised and we were instead told that any

recommendation in the report was to be regarded as a priority for the trust. We consider that it would

have been more helpful and effective for the attention of the trusts concerned to be focused on a

small number of issues which had been identified as underlying causes.

Similarly, we understand that dissemination of the investigation reports to the two trusts was

identical to that of a normal compliance review in that they were simply emailed and/or posted to the

Chief Executive of the trust concerned. While the investigation team leaders gave verbal feedback to

the Chief Executives and senior staff of the trusts before writing the report, in our experience other

regulators exercising powers of this kind would send an individual copy of the report to every

member of the board of the trust and might insist on presenting it at a specially convened board

meeting. In the event, although the investigation reports were in fact discussed by the boards of the

trusts, CQC staff leading the investigation teams had no further involvement at the trusts once their

report was finalised.


12. We note that the new

framework of investigation

reports states that the reports

should be written against the

terms of reference and agree

with this approach. However, in

order for this to lead to a more

strategic approach the

recommendations raised in the

methodology section above

would also need to be

implemented.

13. Reports should focus on a

smaller number of

recommendations that tackle the

underlying causes of the issues

at the trusts.

14. Consider how investigation

reports are fed back to the

Trusts. For example, CQC could

attend a Board meeting at the

trust to present and challenge

the Board members around the

key findings





4.2. Impact of the investigations

The investigations did have some benefits, however there were also negative consequences on the trusts involved.

In making the observations in Section 4.1 in relation to the reporting of the investigations we are not

suggesting that the investigations lacked impact. However there are mixed views about whether the

impact they undoubtedly had merited the distraction and loss of morale they caused or could not

have been achieved in other ways. The distraction was real and substantial. The investigations

caused a degree of confusion for both CQC and the trusts concerned as compliance actions and

warning notices could not be followed up while the investigations were taking place, and therefore

lapsed. More importantly, they caused disruption to improvement plans at the trusts that had already

been put in place, they caused delay in recruitment to key executive positions, and they placed huge

strain on management capacity at a critical period in the effort to turn round the performance of the

trusts concerned.

Although they were not welcomed for these reasons, the trusts nevertheless tried to make the best

use they could of the investigations once they became inevitable and did so to good effect. They

were seen, both within the trusts and by CQC, as providing new Chief Executives with an

unambiguous mandate for change internally, helping to align key external stakeholders behind the

improvement plans and lending support to those plans more generally. This was useful although it

was also felt that these benefits did not justify the cost to the trusts of the downside referred to above

as they could have been achieved in less disruptive ways.

The investigations were also regarded as having been helpful in bringing all the issues of concern

together in a coherent way. There is, however, very wide agreement that CQC learned very little

from the investigations that it did not already know.

The generally held view within CQC is that the major impact of the investigations was that the

publicity they generated caused action to be taken, especially by the SHA in both cases, which

resulted in improvements taking place. However, we would question the belief within CQC that it

was the investigations which prompted action by others. As we have noted, in the case of UHMB

decisive action had already been initiated by Monitor from the point at which the trust was deemed

to be in significant breach of its terms of authorisation.


The general consensus from the

interviews and our review of the

evidence provided was that the two

case study investigations did not

result in any significant new

information being uncovered.

The investigations did have some

benefits, in that they brought

together the issues for each trust in

a coherent way and they provided

the new leadership team with a

mandate for change.

However, there were negative

impacts on the trusts involved, in

particular significant disruption and

distraction at a time when the new

leadership teams were trying to

implement improvements.





4.2. Impact of the investigations (continued)

Also at BHRT, the SHA had already taken action to strengthen the leadership of the trust before the

decision to investigate was taken, including the appointment of a new Chief Executive and new non-

executive directors. Further, although more decisive action was taken by the SHA in September

2011 during the period following the conclusion of the work on site and before the publication of the

investigation report in October, we understand that this was prompted by a CQC decision that month

to restrict maternity services at the trust arising from a compliance review and was not specifically

an outcome of the investigation.

We would add that if galvanising others into action was a prime purpose of the investigations, there

were other actions open to CQC to raise the profile of its concerns, both prior to the decision to

investigate and when presenting the investigation reports.

For example, it is the normal practice at Monitor when there are concerns that a Foundation Trust

may be about to be declared in significant breach of its terms of authorisation, or has not taken

adequate steps to remedy such a breach, to convene an escalation meeting with the Chair and Chief

Executive of the Trust and the Chair and Chief Executive of the regulator. If this does not lead to the

concerns being taken more seriously, Monitor will occasionally insist on a special meeting with the

full board of the trust concerned.

CQC adopts a similar approach but in a lower level way. Chief Executives of trusts causing concern

are occasionally invited in to discuss the concerns, but it is rare for Chairs to be involved in such

meetings and in the past the CQC presence has not normally involved the Chief Executive of CQC

or her deputy. We welcome the fact that the new CQC Chief Executive has chosen to join Monitor

at the next of a series of regular monthly meetings with BTT, which Monitor has been holding with

the trust since declaring it to be in significant breach of its terms of authorisation as a Foundation

Trust.

We are aware that CQC’s express legal powers are limited and differ from those of Monitor, but we

believe that it is unlikely that any Chair of a body providing essential public services would feel able

to decline a request from their quality regulator for a high level meeting.


We are not fully convinced by the

view of staff within CQC that the

main impact of the investigations

was that it galvanised the local

health economy, particularly the

SHAs into taking action. This is

mainly because in relation to both

Trusts significant action had already

been taken, such as changing the

leadership teams, prior to the

investigations being announced.

From our experience of working

with other regulators, we also

consider that there are other

actions that CQC could take which

would raise the profile of its

concerns. For example, the Chair

and Chief Executive of CQC having

escalation meetings with the Chair

and Chief Executive of the trust or

organisation involved.





4.2. Impact of the investigations (continued)

There are other practices adopted by Monitor and other regulators which we consider that CQC

could usefully adopt. For example when there are significant concerns about governance, rather

than committing substantial CQC resources to an investigation, it might first suggest to the trust

concerned that it should commission its own review of governance, or call upon other external

support, thereby ensuring that any recommendations are more likely to be owned by the trust.

Suggestions of this kind would carry even more weight if CQC felt able to adopt a more creative use

of its power to impose conditions on registration, including retrospectively. We understand that CQC

is beginning to do so, although it is understandably cautious as it recognises that further steps in this

direction would increase the risk of facing litigation. Ultimately the appetite for risk in this regard is a

matter for the CQC Board to consider and we are not aware that it has yet done so.

We have tested these views in interviews with senior staff at case study trusts and have found that

they would in general favour a more open high level engagement with CQC and would be receptive

to suggestions, drawing on CQC’s experience, as to how best to drive improvement especially

where this requires a change of culture.

In relation to both routine compliance work and investigations, trusts are required to produce an

action plan, which lays out how they will respond to the recommendations within the CQC report.

The action plans are followed up by CQC as part of its compliance work at the trusts after the

timeframe that has been set by the Trust. If CQC regard the action plan to be insufficient, it will ask

the relevant trust to amend its proposed actions or timelines. However, overall CQC provide very

little feedback on the actions plans that trusts produce and the understandable focus of CQC on its

powers and duties under the Act and the Regulations defining the outcome standards means that it

has not been required to develop or articulate a model of how change takes place in organisations

as large and complex as acute hospitals.

Deloitte recommendation:

15. CQC needs to develop and

articulate a view about how to

drive improvement in an

organisation where leadership,

governance and cultural issues

are at the core of its concerns.




5. Liaison with other stakeholders

5.1. Liaison with other stakeholders (continued)

There is regular engagement between CQC and other relevant stakeholders

We have observed during the course of our review that CQC regularly undertakes inspections jointly

with professional bodies such as the Nursing and Midwifery Council or other regulators such as the

Health and Safety Executive. We have noted too that part of the decision making process at all three

of our case study trusts were risk summits convened by CQC and involving a wide range of

stakeholders at which the issues of concern were fully aired and actions to be taken by each of the

relevant authorities were agreed. We have noted that in respect of Foundation Trusts there is

information sharing and joint decision making with Monitor on a weekly or even daily basis as

necessary, and that the information shared includes “soft” intelligence as well as planned regulatory

activity and other more formal matters. We regard all of this as examples of good practice. But the

quality of the liaison with SHAs and with Monitor (in respect of Foundation Trusts) is of such

importance that the relationship with these bodies merits separate and deeper comment.

We are of course aware that SHAs will not be a part of the new landscape of NHS bodies created by

the Health and Social Care Act 2012. But we expect that regional emanations of the NHS National

Commissioning Board will play a similar role, so the NHS reforms do not negate the value of

examining the role of the SHA in promoting improvement at our case study trusts. This is because,

as noted above, it has been reported to us that the SHA was not in favour of an investigation at

either of the two trusts where one took place. We consider that there are arguably good reasons for

this, especially as it is apparent from what we have learned about the risk summit that preceded the

investigation at UHMB that none of the other stakeholders were in favour of it. This does, however

raise questions in our mind about the dual, and possibly conflicting, nature of the role of an SHA,

which is likely to be replicated within the NHS National Commissioning Board and which CQC needs

to remain conscious of.

SHAs have had a vital role in monitoring and managing the performance of NHS trusts and ensuring

the delivery of high quality services, but they have also been a key part of the management

hierarchy of the NHS, with a responsibility to protect its reputation from unwarranted attack. As such,

they have not been in the same position as independent regulators of the NHS, such as CQC and

Monitor, and nor will any successor bodies to them. We therefore believe CQC should consider

engaging more directly with Boards rather than relying on the role of SHAs (or any successor bodies

to them).


Overall we have seen evidence of

good communication with other

stakeholders and particularly other

regulators.




5. Liaison with other stakeholders

5.1. Liaison with other stakeholders

We have not detected any similar conflict in the position taken by Monitor. Two of our case study

trusts, UHMB where an investigation occurred and BTT where the S.48 power was not used, are

Foundation Trusts. In both cases there was good and regular liaison with Monitor, a shared view of

the nature of the concerns about performance, and an understanding by both parties of which of the

bodies had the most appropriate powers and evidence base to justify intervention.

The nature of the liaison between CQC and Monitor is especially evident in the case of BTT, which

is discussed in section 2.3.

Finally, in relation to liaison with other stakeholders, we have some observations for CQC to

consider about its engagement with local authorities. We have not interviewed any representatives

of local authorities during the course of our review but the role of local authorities has featured

several times in our interviews, yet we have noted that there was very little comment about them in

the investigation reports we have examined. We are aware too that the role of local government in

the health sector is changing and becoming more important. Local authorities will soon be

responsible for public health, the establishment of the health and wellbeing boards and sponsorship

of local healthcare watchdog groups, which will be supported at a national level by Healthwatch

England, a statutory committee within CQC. Moreover there are already some concerns at a local

level about the integration of the CQC and local authority policies. In particular, we have been told

that the approach to the safeguarding of vulnerable people evidenced by the CQC interventions at

one of the case study trusts is at variance with that adopted by the Council across the county as a

whole. We have not looked into this more deeply as it was not within our terms of reference, but we

consider that CQC would be wise to give careful thought to how it engages with local authorities and

their new powers and responsibilities in the future.


16. CQC should review how it

engages with local authorities,

especially in relation to their new

powers and responsibilities in

the future.




6. Other issues

6.1. Other issues

Other issues have arisen during the course of our review which were outside our terms of reference, those which

have been sufficiently close to our core purpose or of sufficient importance to warrant mention in this report are

included below.

Generic Inspectors:

The teams that conducted the two case study investigations were well led and highly competent.

However questions have arisen in a few of our interviews with external stakeholders about the

quality, consistency and proportionality of some of the judgements made by CQC inspectors during

routine compliance work. In particular, we have been made aware of a concern about the use of

inspectors at NHS trusts who have a background solely in social care and the problems this creates

for their credibility with clinicians. We consider that CQC should question its generic approach to

inspection and take steps to satisfy itself that this generic approach across the whole of health and

social care, with acute hospitals being inspected by people who have never worked in the NHS, is

valid.

National Professional Advisors (‘NPA’):

National Professional Advisers are an important clinical resource for CQC, however until very

recently, they appear to be have been used in a sub-optimal way. Although they were involved in

the investigations, either directly or indirectly by recommending clinical specialist support, their role

in on-going compliance activity is ill-defined and communication between the NPAs and senior CQC

management has not always been good. We were told that this has improved dramatically in recent

months and that there are now regular and constructive meetings with the Chair of the Commission.

We were also told that although the new Chief Executive has been in post for only a short period of

time he appears to attach some importance to his meetings with the NPA and to regard them more

as an opportunity to listen and reflect than to convey information (which was the practice in the

past). This is welcome, but we nevertheless feel that CQC could benefit from having greater clarity

about the role of its NPAs and we believe the advisers would welcome this. We would therefore

suggest that CQC should consider, at an appropriate point, a review of its access to professional

clinical advice and the use that it makes of this advice.


17. CQC should question its

generic approach to inspection

and take steps to satisfy itself

that this generic approach

across the whole of health and

social care, with acute hospitals

being inspected by people who

have never worked in the NHS, is

valid.

18. CQC should consider, at an

appropriate point, a review of its

access to professional clinical

advice and the use that it makes

of this advice.




6. Other issues


6.1. Other issues

Internal communication

We also consider that there are issues for the new Chief Executive to address in relation to

communications within CQC itself. We have observed above that many aspects of regulatory

decision making within CQC are highly devolved. The risks associated with this were managed at a

national level during the period we have been primarily concerned with by a Risk and Escalation

Committee, which has subsequently been replaced by a new Regulatory Risk Committee. It is

intended that the new committee should have a more strategic focus than its predecessor, but it has

been in existence for too short a time to know whether this is likely to be the case.

However, regardless of the way in which the new management structures are defined, we believe

they need to address a concern that has repeatedly been reported to us about weaknesses in

feedback to front-line staff about decisions taken at a national level concerning trusts in which they

are directly involved. Staff in day to day contact with the case study trusts were not consulted about

the terms of reference of the investigations that were conducted and the perception of some of them

is that they diligently and regularly reported their concerns about these trusts upwards, but did not

receive feedback the other way. For example often the staff concerned were invited to make

presentations to national level committees, but were not invited to participate in the subsequent

decision-making and on several occasions it was not clear to them where or why key decisions had

been taken.

CQC is very far from being unusual in this respect. It is an everyday problem confronting all national

organisations with a highly dispersed workforce and there is no easy solution to it. It is also a more

difficult problem for public bodies which are likely to attract a high degree of media criticism of

expenditure on actions to bring staff together to share experiences and receive nationally important

messages. However it is precisely because of this that we consider more attention needs to be paid

by CQC to downward and horizontal communication with its staff than we have observed from our

review.


19. CQC should review the

communication channels across

the organisation to ensure there

is appropriate two-way

communication between the

senior management team and the

operational teams in the regions.



Recommendations


Recommendations

Ref. Section Recommendation(s) Suggested

owner

Completion

date

1.1 Strategic versus

operational power

1. The Board should identify those regulatory matters it considers to

be strategic.

2. Decisions relating to these powers should be reserved to the

Board.

2.1 Evidence and

propriety of

decision to

investigate

3. The decision to carry out an investigation under S.48, together

with the reasons for the recommendation should be made in

writing. The final basis of the decision should be clearly

documented and both should be retained.

3.1 Resourcing the

investigation

4. Determine in advance a budget for the investigation, which

includes both the direct costs of the investigation, for example

expenses, fees to external experts and the internal staff costs.

5. Put in place a dedicated team for each investigation, who are

involved across all stages of the investigation. The team should

be involved in reviewing relevant sections of the draft report.

6. The clinical and non clinical external advisors should review and

comment on the findings draft investigation reports.


Introduction │ Executive Summary │ Findings and commentary │ Recommendations │ Appendices


Recommendations (continued)


owner

Completion

date

3.2 Methodology 7. Develop a methodology/ toolkit which investigation teams can

draw upon when scoping and planning an investigation. In

particular these should include guidance on how to investigate

governance and leadership from Board to Ward.

8. Further consider how CQC can use the work from other

regulators and in relation to Monitor look at the where the two

regulatory frameworks meet and how the two can be dovetailed

to prevent duplication.

9. Ensure that staff understand the strategic nature of the

investigation powers and the key differences to a compliance

review.

10. Ensure all communication to staff (all 3 policy documents) clearly

express the nature of the S.48 power.

3.3 Quality assurance

processes

11. For each investigation, as part of the quality assurance process,

ensure the draft report is reviewed and challenged by a suitably

experienced manager who is independent of the investigation.

4.1 Reporting 12. We note that the new framework of investigation reports states

that the reports should be written against the terms of reference

and agree with this approach. However, in order for this to lead

to a more strategic approach the recommendations raised in the

methodology section above would also need to be implemented.

13. Reports should focus on a smaller number of recommendations

that tackle the underlying causes of the issues at the trusts.

14. Consider how investigation reports are fed back to the Trusts.

For example, CQC could attend a Board meeting at the trust to

present and challenge the Board members around the key

findings





owner

Completion

date

4.2 Impact of the

investigations

15. CQC needs to develop and articulate a view about how to drive

improvement in an organisation where leadership, governance

and cultural issues are at the core of its concerns.

5.1 Liaison with other

stakeholders

16. CQC should review how it engages with local authorities,

especially in relation to their new powers and responsibilities in

the future.

6.1 Other issues 17. CQC should question its generic approach to inspection and take

steps to satisfy itself that this generic approach across the whole

of health and social care, with acute hospitals being inspected by

people who have never worked in the NHS, is valid.

18. CQC should consider, at an appropriate point, a review of its

access to professional clinical advice and the use that it makes

of this advice.

19. CQC should review the communication channels across the

organisation to ensure there is appropriate two-way

communication between the senior management team and the

operational teams in the regions.



Recommendations (continued)


Appendix 1 : Terms of reference


Appendix 1: Terms of references


Purpose of the review

To review CQC’s use of its investigation powers set out in section 48 of the Health and Social Care Act 2008 in relation to NHS Hospital Trusts

where they have been unable to meet, or meet and then sustain, essential standards of quality and safety.

CQC wishes to review the use of its powers including the production of public information use of investigation as a tool, effectiveness in deciding

when to use investigation and our ability to implement the investigation tool.

The review will include consideration of the effectiveness in deciding when to use these powers and CQC’s ability to use its powers and resources

proportionately and effectively to protect and promote the health, safety and welfare of people who use the services of the bodies being

investigated.

Investigation powers have been used in relation to a number of NHS Trusts and the reports of these investigations have now been published,

making them available as case studies.

Following conclusion and publication of these investigation reports, CQC wish to commission a third party review of its use of different regulatory

powers as part of its ongoing focus upon and commitment to quality assurance and improvement.

Scope

The scope of the review is to consider how regulatory approaches may be improved by examining case studies of completed investigations into

NHS Trusts where they have been unable to meet or sustain essential standards of quality and safety, considering:

Scope Considered within the report in section:

i. Whether the assessment of risk before investigation powers were utilised was broadly correct

– and where the trigger point was for investigation Section 2.1 and 2.3

ii. Whether a reasonable degree of inspection and investigation of the Trusts was specified and

undertaken taking account of the level of assessed risk and resources required Section 3.2

Iii. Whether appropriate and sufficient information was received from the Trusts and appropriate

inspection and investigation was undertaken to achieve the degree of assurance in the

specification

Section 3.2 and 3.3

iv. Whether sufficient and appropriately skilled resources were allocated to collate information

received, observe and draw conclusions Section 3.1



Appendix 1: Terms of references (continued)



Scope Considered within the report in section:

v. Whether appropriate and proportionate action was required of the Trusts Section 4.2

vi. Whether follow up of the required actions were sufficiently robust, and the management

control over the follow up was appropriate. Section 4.2

vii. Overall, whether the CQC regulation of NHS Trusts is proportionate and reasonable given the

legal, regulatory and geographical context of the Trust; and the organisation context of CQC

during the period April 2009 to July 2012

Section 1.1 and 2.2

(context of this is in relation to

investigations)

viii. What changes, if any, should be made to CQC’s policies and procedures to improve the

handling of similar cases in the future.

Recommendations, Section 4.2, 5.1 and

6.1

List of people interviewed as part of the review:

CQC staff

Director of Operations – Amanda Sherlock

Head of Regulatory Risk & Quality – Louise Dineley

Deputy Chief Executive– Jill Finney

Deputy Director of Operations– Matthew Trainer

Compliance managers – Tony Allen, Rob Assall, Janet Ortega, and

Joanne Wildman

Compliance Inspectors – Beverley Gray, Sue Fraser-Betts and

Marian Whittam

Lead investigators – Adam Brown and Mandy Musgrave

Head of Regional Compliance – Vicky Wells and Ann Ford

Regional Lead - Debbie Westhead

Head of Regulatory Design – Rachel Dodgson

Design Team Leader – Sarah Bell

Board members

Chair – Dame Jo Williams

Chair of ARAC – Prof. Deidre Kelly

Commissioner – Kay Sheldon

List of people interviewed as part of the review:

National Professional Advisors

Ann Farenden

Dr Nick Bishop

External Stakeholders

Chief Operating Officer Monitor - Stephan Hay

Chief Nurse NHS London – Trish Morris-Thompson

BTT interviewees

Chief Executive – Clare Panniker

Medical Director – Dr Stephen Morgan

Director of Nursing – Diane Sarker

BHRT interviewees

Chief Executive – Averil Dongworth

Medical Director – Dr Mike Gill

Director of Nursing – Flo Panel-Coates


Appendix 2 : Section 48 of the Health & Social Care Act 2008


Appendix 2: Section 48 of the Health & Social Care Act 2008



Section 48 - Special reviews and investigations

(1) The Commission may conduct any special review or investigation, and must do so if the Secretary of State so requests.

(2) A special review or investigation is a review (other than a periodic review) of or an investigation into:-

a) the provision of NHS care;

b) the provision of adult social services; or

c) the exercise of functions by English Health Authorities.

(3) Such a review or investigation may relate:-

a) to the overall provision of NHS care or adult social services or to the provision of NHS care or adult social services of a particular

description;

b) to the overall exercise of functions or to the exercise of functions of a particular description; or

c) to the provision of care or services or the exercise of functions by bodies or persons generally or by particular bodies or persons.

(4) Where the Commission conducts a review or investigation under this section, it must publish a report.

(5) The Commission must consider whether the report raises anything on which it ougth to give advice to the Secretary of State under section

53(2).

(6) If the review or investigation gives rise to a duty to act under section 50(2) or (3) in respect of an English local authority, subsection (5)

does not apply in relation to so much of the report as relates to that local authority.

(7) The Secretary of State may, after consulting the Commission, by regulations make provision as to the procedure to be followed in respect

of the making of representations to the Commission before the publication of a report under subsection (4).

(8) In this section “English Health Authority” means:-

a) a Strategy Health Authority; or

b) a Special Health Authority performing functions only or mainly in respect of England.


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