Accountability of providers' directors

Accepted in principle.
In cases where there are reasonable grounds that a person is not fit to hold such a post, we would expect this view to be reflected in the references provided by the employer to a prospective new employer. Prospective employers have a responsibility to seek references from previous employers. NHS Employers are working on how to support organisations so that all information relating to recruitment into Board positions is presented, known and used by employers. Rather than use a regulatory intermediary as a register of concerns about a person’s fitness of the kind identified by this recommendation, we therefore believe it would be better to make references and recruitment processes more effective.
We agree that the public has the right to expect that people in leading positions in NHS organisations are fit and proper persons; and that where it is demonstrated that a person is not fit and proper, they should not be able to occupy such a position. Monitor’s licence conditions for providers of NHS services already prevents licensees from allowing unfit persons to become or continue as governors or directors (or those performing equivalent functions). They are also required to ensure that their contracts of service with its Directors contain a provision permitting summary termination in the event of a Director being or becoming an unfit person. The Licensee is also required to ensure that it enforces that provision promptly upon discovering any Director to be an unfit person.
In order to strengthen this, the Government issued in July 2013 a consultation on Strengthening corporate accountability in health and social care. This proposes a new requirement that all Board Directors (or equivalents) of providers registered with Care Quality Commission must meet a new fitness test. We are proposing that this test includes checks about whether the person is of good character including past employment history, if the individual has the qualifications, skills and experience necessary for the work or office, as well as the more traditional consideration of criminal and financial matters.
The Government proposes that the fit and proper persons test will now be used as a mechanism for introducing a scheme for barring Directors who are unfit from individual posts by Care Quality Commission at the point of registration. Where a Director is considered by Care Quality Commission to be unfit it could either refuse registration, in the case of a new provider, or require the removal of the Director on inspection, or following notification of a new appointment. Further details will be set out in the response to the consultation on corporate accountability which will be published shortly. We plan to publish the draft regulations for consultation at the same time.

This recommendation has been superseded by recommendation 3 of the Kark Review.

A standardised board member reference has been published as part of the Fit and Proper Person Test Framework (August 2023). Relevant information on FPP compliance is captured in the board member reference, which the recruiting organisation should request from the former organisation in advance of the individual taking up their new post. NHS organisations need to request board member references, and store information relating to these references so that it is available for future checks; and use it to support the full FPPT assessment on initial appointment. This does not appear to implement the elements of Recommendation 3 relating to settlement/confidentiality agreements, in that the FPPT Framework states where such an agreement is in place, NHS organisations should seek permission for all parties before including such information in a reference.

CQC guidance on implementing the Fit and Proper Person Regime states the provider is responsible for the appointment, management and dismissal of its directors. The provider must be able to show evidence that appropriate systems and processes are in place to ensure that all new and existing directors are, and continue to be, fit and that no appointments meet any of the unfitness criteria set out in Schedule 4 of the regulations.

Since this recommendation, the Kark Review made further recommendations in relation to the Fit and Proper Persons test under Regulation 5 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 as it applies to directors.

Duty of Candour

In November 2014, the government introduced a statutory (organisational) duty of candour for NHS trusts and NHS foundation trusts with regulation 20 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014. The duty places a direct obligation upon trusts to be open and honest with patients and service users, and their families, when something goes wrong that appears to have caused or could lead to moderate harm or worse in the future (known as a ‘notifiable safety incident’).

From April 2015, the duty extended to all other health and social care providers registered with the CQC including care homes.

The duty of candour is enforced by CQC with consequences for health and care providers who are found to be non-compliant. This can include CQC’s ability to:

- impose conditions - issue warning notices and fines - remove a provider’s registration - bring criminal prosecutions without needing to first serve a warning notice

The Department of Health has consulted on a new registration requirement that all directors of providers registered with the Care Quality Commission must meet a fit and proper person test. The Care Quality Commission will be able to insist on the removal of directors that fail this test. The consultation included how the revised fit and proper person requirement will work, and questions about the impact of the new regulations. The consultation ran from 27 March to 25 April 2014.The Fit and Proper Persons Test Regulations have been passed by Parliament and are in place in November 2014 for NHS organisations and from April 2015 for other organisations.

This recommendation was accepted in principle by the Government.

In the January 2014 Hard Truths report, the Government said that it would expect this to be reflected in references provided by the employer to any prospective new employer, rather than by using a regulatory intermediary as a register of concerns about a person’s fitness.