Care Quality Commission Third Party Review of CQC’S Regulatory Approach Final Report

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.

The Audit, Risk and Assurance Tel: +44 (0) 161 832 3555 Committee www.deloitte.co.uk 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 We have assumed that the information provided to us and management's In accordance with the terms of the purchase order dated 10 September representations are complete, accurate and reliable; we have not 2012 (the ‘Contract’), for the third party review of the regulatory approach independently audited, verified or confirmed their accuracy, at the Care Quality Commission (‘CQC’), we enclose our final report dated completeness or reliability. In particular, no detailed testing regarding the 23 January 2012 (the ‘Final Report’). accuracy of the financial information has been performed. The Final Report has been prepared for the sole use of the CQC and is The matters raised in this report are only those that came to our attention subject to the restrictions on use specified in the Contract. No party, other during the course of our work and are not necessarily a comprehensive than the Care Quality Commission is entitled to rely on the Final Report for statement of all the strengths or weaknesses that may exist or all any purpose whatsoever and we accept no responsibility or liability to any improvements that might be made. Any recommendations for other party in respect of the contents of this Final Report. improvements should be assessed by CQC for their full impact before they are implemented. 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 Yours faithfully 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. Deloitte LLP

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Contacts and contents

Page The contacts at Deloitte in connection with this report are: Introduction and scope 4

Steve Bundred Executive Summary 7 Lead reviewer Findings and commentary 11 Dr. Jay Bevington Partner Recommendations 36

Nicky Cooke Appendix 1: Terms of Reference 40 Director Appendix 2: Section 48 of the Health & Social Care Act 2008 43

Introduction and scope

Project scope Our approach This report sets out the findings of our independent review of the Our approach to delivering the project scope has consisted of: Care Quality Commission’s (‘CQC’) use of its investigation powers as 1. Reviewing documentation which included: set out in Section 48 of the Health and Social Care Act 2008 in relation to NHS Hospital Trusts and Foundation Trusts to provide • The results of compliance reviews, inspections and assurance to the Audit, Risk and Assurance Committee (‘ARAC’) of: investigations undertaken between April 2010 to August 2012 for each Trust; • the reasonableness and proportionality of CQC’s regulatory • CQC Judgement Framework; activity using investigatory powers (and the procedures underpinning those) using the cases noted as studies; • CQC Guidance about Compliance; • CQC enforcement policy; • the adequacy and proportionality of the use of investigation powers; and • Chronologies for each Trust prepared by CQC; and • Relevant internal policies and Board and • where appropriate, to make recommendations regarding areas management team minutes; and for improvement. • Other relevant information, including risk summit The detailed terms of reference are included in Appendix 1 and the minutes. scope is in line with the Purchase Order dated 10 September 2012. 2. Conducting semi-structured interviews with key CQC Our review focused on three case study acute hospital trusts: personnel; Barking, Havering and Redbridge University Hospitals NHS Trust (‘BHRT’); University Hospitals Morecambe Bay NHS Foundation 3. Conducting semi-structured interviews with representatives Trust (‘UHMB’) and Basildon and Thurrock University Hospitals NHS from the 2 of the Trusts; Foundation Trust (‘BTT’). CQC had undertaken an investigation at 4. Conducting semi-structured interviews with external both BHRT and UHMB, but although there had been a history of stakeholders including relevant SHAs, other healthcare regulatory concern at BTT the S.48 power had not been used. UHMB regulators including Monitor; and BTT are NHS Foundation Trusts and hence are also subject to 5. Analysing and evaluating the evidence; regulatory powers conferred upon Monitor. 6. Undertaking a feedback session with the ARAC on 30

November 2012 and Board on 12 December 2012. The We would like to thank CQC Board members, staff, and external purpose of these sessions was to provide verbal preliminary stakeholders for their engagement during this project. 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. 5 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings │ Recommendations │Appendices

Introduction (continued)

Structure of the report Glossary of terms used throughout this report Our detailed findings in respect of all these matters are set out below under the following headings: • Board oversight of regulatory activity; CQC = The Care Quality Commission • Preliminary decision making; BHRT = Barking, Havering and Redbridge University • Resourcing, methodology and conduct of the investigations; Hospitals NHS Trust • Reporting and impact of the investigations; UHMB = University Hospitals Morecambe Bay NHS Foundation Trust • Liaison with other stakeholders; • Other issues. BTT = Basildon and Thurrock University Hospitals NHS Foundation Trust Our findings comprise a description of what we found in relation to each area along with an series of recommendations. A summary SHA = Strategic Health Authority statement is provided within the Executive Summary. NPA = National Professional Advisors The findings have been mapped against the terms of reference in HCC = The Healthcare Commission Appendix 1. S.48 = Section 48 of the Health & Social Care Act 2008 Next steps S.52 = Section 52 of the National Health Service Act 2006 We recommend that CQC should create an Action Plan that SUIs = Serious Untoward Incidents incorporates how CQC proposes to implement the various recommendations detailed in this report, by when and how the Board will monitor progress.

Executive Summary

Executive Summary │Introduction │ Findings │ Recommendations │ Appendices Executive Summary

CQC was established in October 2008 and became operationally We would advise that there should be stronger and clearer oversight active on 1 April 2009, when it merged with and replaced the by the CQC Board of strategically significant regulatory decisions of regulatory functions of the previous three regulators: the Healthcare this kind. This would have the added advantage of ensuring that the Commission; the Commission for Social Care Inspection; and the reasons for the decisions are fully documented and the decisions Mental Heath Act Commission. properly recorded.

Section 48 of the Health & Social Care Act 2008 gives CQC a useful In the case of BTT, the decision not to launch an investigation was in and potentially very powerful strategic regulatory tool. CQC has our view correct, and remains so, although an investigation could undertaken four investigations under S.48 of the 2008 Act, since NHS nevertheless have been justified on the basis of the criteria applied providers were first registered on 1 April 2010, and has learned to such decisions at several points. BTT is an example of the rapidly from its experience. Therefore it has already taken many of the importance of allowing maximum flexibility for the exercise of actions we might otherwise have suggested based on our review of judgement within a transparent regulatory framework and the CQC the two case study investigations. However, there are further framework provides for this. 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 The key decision in respect of BTT rested on the fact that Monitor recommendations. has powers CQC does not possess. CQC has argued for additional powers in its evidence to the Francis Inquiry and we believe these Decision to investigate are needed. However, we also believe that CQC could make more creative use of the powers it currently has. In both cases where investigations have occurred the decisions to investigate were properly authorised and can clearly be justified by Resourcing of the investigations reference to criteria set out in the CQC Enforcement Policy applicable at the time. They are also justified by the current Enforcement Policy The investigations were adequately resourced and the teams were which differs in important respects. The new policy is a significant led by competent and experienced inspectors who were able to draw improvement on its predecessor, but the criteria set out in both on expert external and internal advice as required. The inspection polices are transparent and appropriate. teams were large and in both cases included clinicians and a chief executive. We regard all of this as good practice. We nevertheless However, in neither case was an investigation strictly necessary. The consider that it would have been better if all members of the team decision to investigate appears in both cases to have been prompted had been present throughout the whole of the two investigations. It more by frustration of the slow pace of improvement at the trust would also represent better financial management if a budget for the concerned and the pressure of external events rather than any careful investigations had been determined in advance. consideration of what purpose an investigation might serve. As such, we do not consider these decisions to represent examples of good regulatory decision making.

Introduction │ Executive Summary │ Findings │ Recommendations │ Appendices

Executive Summary (continued)

Methodology and reporting In order to conduct effective investigations which address wider systemic issues or worries about leadership, governance and The teams should have been given more time to allow them to culture, CQC needs to develop appropriate methodologies which prepare for the investigations. They should have been more would provide guidance to staff undertaking investigations of this thoroughly and formally briefed as to the purpose of the investigations kind. In particular, CQC needs to be able to articulate a view about and the distinction between investigations and normal compliance how to drive improvement in an acute hospital trust where reviews. Also more thought should have been given to the terms of leadership, governance and cultural issues are at the core of its reference and methodology adopted with this distinction in mind. As it concerns. was, the investigations were undertaken and reported in a way which was too similar to normal compliance reviews. In their own terms, We believe that CQC needs to understand and articulate at all levels they were well conducted and served a useful purpose, but they that S.48 of the 2008 Act confers upon it a very broad and strategic revealed very little about the two trusts that was not already known. power. We are not persuaded that the new Framework for The results were therefore sub-optimal. The perceived benefits also Investigations and the Decision to Investigate guidance fully reflect came at a high cost to the trusts themselves. this, but both represent a significant advance. In particular, in order to get behind the concerns that are likely to We do not have any concerns about the judgements expressed in prompt an investigation and ensure that wider systemic, governance, the investigation reports concerning the services provided to leadership and cultural issues are adequately addressed, CQC needs patients, which were accepted as valid by the trusts. We to go beyond the outcome standards used for compliance reviews in nevertheless consider that the Quality Assurance arrangements for approaching both the conduct and the reporting of investigations. We reports of this kind could usefully be strengthened. understand that in future investigation reports will be more clearly We consider that CQC could usefully adopt the practice of other referenced to the original Terms of Reference. We applaud this. We regulators in making known its concerns about a regulated body. In also consider that it would be more helpful if recommendations particular, we believe it should consider engaging more directly with contained in investigation reports were fewer in number, more clearly boards. focused on the key issues and prioritised wherever possible.

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.

Findings and commentary

11 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices Findings and commentary

Summary of 1. Board oversight of regulatory activity 13 contents 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

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 Deloitte commentary: Chief Executive and the Executive team to account for delivering CQC’s strategic aims and We note that CQC have delegated objectives. This reflects a proper understanding of the distinction between strategic and operational the decision to conduct an roles and of the clear responsibility of the Board for strategic leadership and decision making. investigation under S.48 to the However, we would comment that some regulatory decisions may be strategic as well as Chief Executive on this basis that operational; and we consider that a decision to exercise the S.48 powers falls within this category. this is an operational matter. There are no widely recognised criteria determining what constitutes a strategic regulatory decision. We would question this premise as It is a matter for judgement, but we would suggest that among the tests to be applied are: we consider the decision to • whether the decision would commit a significant amount of the organisation’s resources and exercise S.48 powers to be a involve a level of activity not envisaged in the originally approved budget, which might thereby strategic regulatory decision. impact on other planned activity; We consider that both the Board • whether the decision would require the exercise of novel or unusual powers and hence involve a and senior management of CQC greater than usual risk of poor judgement or decision making; need to exercise stronger oversight • whether the decision might lead the regulator into commenting on the actions (or inactions) of of strategic regulatory decision bodies it does not regulate (such as the SHA or commissioners) and hence impose a risk of making and that there should be damage to relationships with key stakeholders; and better and fuller recording of strategic regulatory decisions. • 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. .

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

Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 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 Deloitte recommendations: (although it is worth noting that no such arguments have been put to us by CQC staff). In particular 1. The Board should identify we are mindful of the importance that regulators rightly attach to the reality and the perception of those regulatory matters it their independence, both from the bodies they regulate and from the possibility of political influence. considers to be strategic. We have observed that the latter is secured within CQC by substantial delegation of regulatory 2. Decisions relating to these powers. In principle, a high level of delegation is good practice, but we would question whether there powers should be reserved to is adequate oversight by Board members and senior management of the exercise of delegated the Board. 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.

14 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 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 Deloitte commentary: (Annex 1, page 40, paragraph 45) the decision to order an investigation under S.48 of the Health We consider it would be preferable and Social Care Act 2008 “after receiving advice from the Director of Operations, Deputy Directors for there to be a clear written record of Operations or Heads of Regional Compliance”. of the reasons for a We have been advised that its predecessor(s) documents contained identical, or essentially the recommendation to investigate and, same, provisions and we are satisfied that the two investigations we have focused on were properly if different, the reasons for its authorised by the then Chief Executive in accordance with these arrangements. We have also been acceptance. While providing better assured that the Chief Executive had at no time prior to our review been advised by the Director of protection for all those involved in Operations, or others referred to in the Scheme of Delegation, to initiate an investigation at BTT, the decision making process, and although active thought had on occasion been given to this possibility by the relevant CQC staff. for the reputation of CQC itself, this would have the added advantage of However, we have been unable to examine the detailed advice that was received by the Chief ensuring a clear audit trail between Executive at the time the two investigations were decided upon, although we have seen an e-mail in the reasons for the decision, the relation to UHMB, which recommends the Chief Executive authorises an investigation. The detailed approved terms of reference and advice, which lays out the reasons for the investigation does not appear to have been given in the substance of the investigation writing, or if it was, this cannot now be recalled by those involved and no record of it can now be report traced by the CQC staff who have been supporting us in this review. Recommendation: In consequence, the reasons for conducting an investigation in the two cases we have looked at, 3. The decision to carry out an and in the case of BHRT the issues which the investigation was intended to shed light on, can now investigation under S.48, only be inferred from the memory of those involved, the approved terms of reference and the together with the reasons for the previous history of compliance activity at the two trusts. recommendation should be We would comment that if the Board were to withhold the decision to investigate as discussed in made in writing. The final basis section 1, some of the issues we raise above would also be addressed. There would be a paper to of the decision should be clearly the Board setting out the reasons for the recommendation and a minute of the Board discussion documented and both should be recording the reasons for its decision. This would then also enable the reasons for the decision to be retained. clearly matched to the terms of reference of the investigation and to the investigation report.

15 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 2. Decision to investigate

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 Deloitte commentary: investigation set out in Appendix A of the CQC Enforcement Policy. This is the Enforcement Policy We have examined the extent to dated October 2010 which was applicable at the time. The current Enforcement Policy, dated April which the decisions taken satisfied 2012, sets out the criteria for an investigation in Section 5 and Appendix D. Although the provisions the criteria set out in the of the two documents are similar in some respects, there are important differences in the wording Enforcement Policy dated October and we have therefore tested the decision making not just against the rules that were in force at the 2010 and October 2012 and have time but also against those that currently apply. concluded that in both the case We consider that the later version of the policy is a significant improvement on its predecessor in study investigations they did or that the criteria are expressed with greater clarity and are more in keeping with the apparent intent of would have done so. the 2008 Act that investigations should look more widely than routine compliance activity. The We have also concluded that a provisions contained within the earlier document nevertheless appear to be appropriate having been decision to launch an investigation adopted as the criteria used by the predecessor body, the Healthcare Commission. at BTT could have been defended Both give CQC a wide degree of discretion, recognising that the circumstances will differ in each at various points in time by case and apparently similar circumstances may nevertheless warrant different judgements about the reference to the approved criteria, value of an investigation. The current Enforcement Policy states that an investigation is appropriate including the currently approved when “one or more of the following criteria are met: criteria, although given the appropriately wide degree of • Providers have failed to respond to conventional enforcement activity with the required discretion accorded to CQC, at no improvements in a reasonable timescale. point would an investigation have • Further enforcement activity will result in adverse consequences for people using services, for been required at any of the three example as a result of geographical isolation. trusts. • 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.”

Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 2. Decision to investigate

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 Deloitte commentary: intended to permit CQC to examine systemic failings, including failings in bodies it does not regulate, Although the two investigations and/or to get behind poor outcomes for patients at an individual provider to look at the governance, were properly authorised and leadership and cultural issues which may be contributing to these poor outcomes. It is a power justifiable, the decision to which enables CQC to conduct an investigation with a focus which goes beyond the outcome investigate appears in both cases to standards which are at the core of normal compliance reviews. This is reinforced in the new have been prompted more by a Framework for Investigations which has a section (pages 5-6) headed “Differences between perceived need to be seen to be regulatory compliance work and an investigation”. taking action in response to The provisions in Appendix A of the October 2010 Enforcement Policy were less strategic in their external events rather than any focus. At the time the decisions were taken to launch an investigation into BHRT, and the later careful consideration of what decision to conduct an investigation at UHMB, the policy in force was that: purpose an investigation might serve. As such, we do not consider ‘Factors which might trigger us to commence a formal investigation include: these decisions to represent • A higher number than anticipated of unexplained deaths. examples of good regulatory decision making. • Serious injury or permanent unnecessary harm to people, whether physical, psychological or emotional We consider some of the alternative actions that CQC could have • Events which put at risk public confidence in care provided, or in the NHS, independent sector or considered to achieve the adult social services generally. objectives of the investigations • A pattern of adverse outcomes for people or other evidence of high-risk activity. based on our experience of working • A pattern of failures on the part of a service or services; or team or teams, or concerns about with other regulators in Section 4.2. 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.

Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 2. Decision to investigate

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.

18 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 2. Decision to investigate

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.

19 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 2. Decision to investigate

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.

20 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 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 Deloitte commentary: predecessor bodies, the HCC, and with it the methodology for such investigations adopted by HCC, Within their own terms, and set at an early stage in its life, although it did maintain the criteria to investigate within the 2010 against the criteria applicable at the Enforcement Policy. The decision was controversial internally at the time and remains so. We do time, the two investigations we not question this decision, not least because we recognise that CQC began life with fewer resources have looked at were well led by and more responsibilities than its predecessor bodies and therefore has to use its resources more highly competent CQC staff and sparingly. However, a regional based approach with far fewer investigations than previously were conducted by teams made up undertaken by HCC had the effect of diluting the inherited experience and expertise. We understand of experienced and suitably that HCC undertook fifteen investigations in the four year period from 2005 to 2009, whereas CQC qualified people. In both cases they has undertaken only four in the three years from 2009 to 2012. included people external to CQC The investigation at United Lincolnshire Hospitals NHS Trust was the first within an acute hospital with clinical or senior administrative setting that had been undertaken by the CQC and the investigation at BHRT commenced while the experience in the NHS. United Lincolnshire investigation was still in progress. Neither had been envisaged at the time the The short timescales imposed on CQC budget and operational plans for 2011/12 were set and so prior to the decision to launch an the investigation teams to investigation at BHRT (the first of our two case study investigations) there is no evidence to support commence the site visit once the that there had been adequate consideration as to how it should be resourced or conducted. investigation was announced had In consequence, there was no approved budget for either of our two case study investigations, but consequences for the way in which equally there was no resource constraint. We understand that CQC has quantified the direct cost of the investigations were conducted the investigation at BHRT as being £88,831. We have not audited this figure so cannot verify it, and both in relation to the resource we note that it refers only to the direct cost rather than the full cost of the investigation. We consider available and the methodology that it would represent better financial management if a budget for the investigations had been used. 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.

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3.1. Resourcing the investigation (continued)

The tight timescale imposed on the investigation impacted on the resources available. For example, Deloitte recommendations: in the case of BHRT it proved impossible to assemble a sufficiently senior investigation team who 4. Determine in advance a budget could devote two full weeks (the length of the site visit) to the investigation. This meant that in the for the investigation, which first week there were 15 or 16 team members involved and in the second 8 or 10. There was some includes both the direct costs of overlap, but several of those engaged during the first week were not involved in the second, and vice the investigation, for example versa. Hence there was no clearly defined team that collectively shared and challenged the expenses, fees to external evidence emerging from the investigation and took ownership of the final report. This approach experts and the internal staff places an unusually high premium on the internal quality assurance arrangements within CQC and costs. the wisdom and judgement of the Compliance Manager responsible for leading the investigation team. 5. Put in place a dedicated team for each investigation, who are There was also pressure for the team to get on site as quickly as possible at UHMB, but in this case, involved across all stages of the although there were some team members who contributed only briefly, there was a core team investigation. The team should present throughout the whole period including expert external advisers. The team at UHMB be involved in reviewing relevant comprised 13 or 14 people. sections of the draft report. In both cases, there were daily briefings for the team on site each evening on the issues that had 6. The clinical and non clinical arisen during the day and the report was shared in draft with some of the team members for their external advisors should review comment, which included the external clinical advisors at BHRT. We consider that these should and comment on the findings broadly be the expected arrangements for any future investigation. draft investigation reports. 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.

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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 Deloitte commentary: place within CQC. The planning and design of the methodology was mainly left to the two lead There was no investigation investigators with only limited central support. For example, whilst both had previous experience of methodology in place at the time undertaking investigations as part of investigation teams within the predecessor regulators, they the two case study investigations were not provided with specific training in relation to the conduct of an investigation within CQC or were undertaken. 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 The timetables that had been set to timetables under which the two case study investigations were conducted provided no opportunity be on site quickly once the for detailed consideration of the most appropriate methodology, and we have seen no evidence of investigation was announced, this matter being discussed within any governance forum or among the most senior staff of CQC. meant that there was limited opportunity to develop a more Ultimately, as we were told by a number of different sources, this resulted in the investigation teams considered methodology which having to develop the methodology themselves, although UHMB did draw upon the approach used would be able to address some of at BHRT. This does not invalidate the conclusions they reached in either case, but it did in practice the wider concerns at the trust. For limit the scope of the investigations. In particular, it did not permit the investigations to be designed example, underlying cultural issues in such a way as to clearly distinguish them from normal compliance reviews and to enable them to or wider health economy concerns. 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’.

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3.2 Methodology (continued)

For example, we note that the terms of reference of the investigation at BHRT did not require any Deloitte commentary: consideration of the financial difficulties faced by the trust and the extent to which this was impacting There has been significant on concerns about staffing, although there is mention in the report of the scale of the deficit being improvement in the guidance and part of the context. Further, in both cases the contribution to poor clinical practices played by poor policy documents in relation to relations with commissioners was clearly an issue, and was touched upon in the report, but did not investigations, since the 2 case feature strongly in the recommendations. Indeed it is not clear to us how this issue could have been study investigations were carried addressed in any depth without considerable thought being given beforehand to the criteria against out. For example, CQC has which the relationships would be judged. recently (September 2012) adopted Equally, it is apparent from our review that the pressure on maternity services at both BHRT and at a new Framework for Investigations BTT needs to be seen in the context of substantial population growth and a rising birth rate affecting which addresses some of the gaps hospitals throughout East London and Essex, but an investigation of these matters would require a in previous arrangements which very different approach to the one adopted. have been evident from our review, especially in relation to the In respect of a number of the concerns we identified, CQC has already made significant advances guidance available to staff. since the investigations were conducted, and has continued to do so since our review was commissioned. Specifically: However, the new guidance does not contain what we would • it has reviewed the criteria for launching an investigation, expressed these criteria in more recognise as a methodology for strategic terms, to match the apparent intention of the 2008 Act, and published them in a revised conducting investigations aimed at version of its Enforcement Policy; systemic or leadership and • it has convened meetings of those involved to consider the lessons learned; governance issues. • 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.

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3.2 Methodology (continued)

We have already commented that we regard the new Enforcement Policy as a significant Deloitte recommendations: improvement on its predecessor. We also consider that the Framework for Investigations and the 7. Develop a methodology/ Decision to Investigate guidance will prove helpful to staff. However, we have a concern about the toolkit which investigation teams degree of consistency between these three documents and we would comment that none of them can draw upon when scoping contain what we would recognise as a methodology for conducting investigations aimed at systemic and planning an investigation. In or leadership and governance issues, along the lines of that set out in Part 2 of “Essential standards particular these should include of quality and safety”, CQC’s guidance about compliance. guidance on how to investigate The Decision to Investigate guidance could more usefully reflect the fact that an investigation might governance and leadership from not arise directly from compliance activity at a particular regulated body, but might result from issues Board to Ward. arising at a number of bodies. In the circumstances alluded to above, for example, it would be open 8. Further consider how CQC can to CQC to investigate pressure on maternity services across the whole of a region or sub-region and use the work from other the likelihood of the supply of midwives matching future demand. In our view, both the new regulators and in relation to Enforcement Policy and the Framework for Investigations are clearer in their recognition that the Monitor look at the where the two S.48 power is very broad and permits CQC to undertake investigations that are not directly regulatory frameworks meet and connected to its enforcement activity. This understanding of the nature of the power needs to be how the two can be dovetailed to clearly expressed in all communications to staff. 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.

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3.3 Quality Assurance processes

CQC did have a Quality Assurance process in place for the two investigations and whilst there were Deloitte recommendations: no problems in these particular instances, we nevertheless consider that CQC could benefit from a 11. For each investigation, as more rigorous approach to the quality assurance of reports of this kind. part of the quality assurance As part of the internal process, the draft reports were initially reviewed by the Regional Director or in process, ensure the draft report the case of UHMB, the Head of Regulatory Risk and Quality. There was then a second review is reviewed and challenged by a undertaken by senior managers within CQC including the Director of Operations and the Head of suitably experienced manager Regulatory Risk and Quality who were able to question the evidence base for some of the who is independent of the judgements reached and to satisfy themselves that the degree of concern expressed was investigation. 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.

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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 Deloitte commentary: directly from our consideration of the way they were conducted and the reports were structured. The The reports were structured in such two investigations we have looked at were conducted by reference to the outcome standards used a way that gave them the look and for compliance reviews and the reports and recommendations were grouped under these same feel of a more comprehensive headings. This has a clear advantage in that the approach is familiar to CQC staff and did not compliance review, which was in require any special training or preparation in advance of going on site, which was clearly important part due to the methodology used. given the tight timetable. However, this benefit is outweighed, in our view, by several disadvantages. This meant that they did not provide First, as the reports had the look and feel of a more intensive compliance review, there was no additional analysis and information obvious reason why they should be taken any more seriously by the trusts concerned than they that would go significantly beyond would a normal compliance review report. Indeed there is a good reason why they might have the remit of a compliance review, regarded the investigations as being less significant, since the recommendations contained within which S.48 powers are designed to them are not associated with any enforcement powers. At both trusts there were Warning Notices in address. force at the time the investigations were authorised and outstanding Compliance Actions from earlier There were a significant number of regulatory activity. These were mandatory for the trusts; the recommendations in the investigation recommendations raised within reports were not. both of the investigation reports (79 at BHRT and 40 at UHMB), which Second, the outcome standards against which the investigations were conducted and reported apply were not prioritised. We consider only to regulated bodies but, as we have already noted, a specific purpose of the S.48 power is to that it would have been more allow CQC to examine wider systemic issues which go beyond regulated bodies. It is not clear to us helpful and effective for the how this could have been satisfactorily achieved using the approach adopted. attention of the trusts concerned to Third, even within the regulated trusts a clear purpose of the power to conduct investigations is to be focused on a small number of examine weaknesses in governance, leadership and culture which are impacting on users of issues which had been identified as services. We have been advised that this was approached, using the compliance framework, underlying causes. 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.

Introduction │Executive Summary │ Findings and commentary │Recommendations │Appendices 4. Reporting and impact of the investigations

4.1. Reporting (continued)

Moreover, there have been major concerns expressed in relation to outcome 16 at BTT where no Deloitte recommendations: investigation took place. To address the wider governance and leadership issues directly it would, in 12. We note that the new our view, have been necessary to adopt a methodology that had this objective specifically in mind. framework of investigation We would comment too that in our view the S.48 power exists to enable CQC to report on the things reports states that the reports that really matter and which would not emerge with the same clarity from an intensive compliance should be written against the review. However, the BHRT investigation report contained 79 recommendations and the UHMB terms of reference and agree report 40. In neither case were they clearly prioritised and we were instead told that any with this approach. However, in recommendation in the report was to be regarded as a priority for the trust. We consider that it would order for this to lead to a more have been more helpful and effective for the attention of the trusts concerned to be focused on a strategic approach the small number of issues which had been identified as underlying causes. recommendations raised in the methodology section above Similarly, we understand that dissemination of the investigation reports to the two trusts was would also need to be identical to that of a normal compliance review in that they were simply emailed and/or posted to the implemented. 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 13. Reports should focus on a regulators exercising powers of this kind would send an individual copy of the report to every smaller number of member of the board of the trust and might insist on presenting it at a specially convened board recommendations that tackle the meeting. In the event, although the investigation reports were in fact discussed by the boards of the underlying causes of the issues trusts, CQC staff leading the investigation teams had no further involvement at the trusts once their at the trusts. report was finalised. 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

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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 Deloitte commentary: suggesting that the investigations lacked impact. However there are mixed views about whether the The general consensus from the impact they undoubtedly had merited the distraction and loss of morale they caused or could not interviews and our review of the have been achieved in other ways. The distraction was real and substantial. The investigations evidence provided was that the two caused a degree of confusion for both CQC and the trusts concerned as compliance actions and case study investigations did not warning notices could not be followed up while the investigations were taking place, and therefore result in any significant new lapsed. More importantly, they caused disruption to improvement plans at the trusts that had already information being uncovered. 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 The investigations did have some trusts concerned. benefits, in that they brought together the issues for each trust in Although they were not welcomed for these reasons, the trusts nevertheless tried to make the best a coherent way and they provided use they could of the investigations once they became inevitable and did so to good effect. They the new leadership team with a were seen, both within the trusts and by CQC, as providing new Chief Executives with an mandate for change. unambiguous mandate for change internally, helping to align key external stakeholders behind the However, there were negative improvement plans and lending support to those plans more generally. This was useful although it impacts on the trusts involved, in was also felt that these benefits did not justify the cost to the trusts of the downside referred to above particular significant disruption and as they could have been achieved in less disruptive ways. distraction at a time when the new The investigations were also regarded as having been helpful in bringing all the issues of concern leadership teams were trying to together in a coherent way. There is, however, very wide agreement that CQC learned very little implement improvements. 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.

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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 Deloitte commentary: 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 We are not fully convinced by the 2011 during the period following the conclusion of the work on site and before the publication of the view of staff within CQC that the investigation report in October, we understand that this was prompted by a CQC decision that month main impact of the investigations to restrict maternity services at the trust arising from a compliance review and was not specifically was that it galvanised the local an outcome of the investigation. health economy, particularly the SHAs into taking action. This is We would add that if galvanising others into action was a prime purpose of the investigations, there mainly because in relation to both were other actions open to CQC to raise the profile of its concerns, both prior to the decision to Trusts significant action had already investigate and when presenting the investigation reports. been taken, such as changing the leadership teams, prior to the For example, it is the normal practice at Monitor when there are concerns that a Foundation Trust investigations being announced. 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 From our experience of working Executive of the Trust and the Chair and Chief Executive of the regulator. If this does not lead to the with other regulators, we also concerns being taken more seriously, Monitor will occasionally insist on a special meeting with the consider that there are other full board of the trust concerned. actions that CQC could take which would raise the profile of its CQC adopts a similar approach but in a lower level way. Chief Executives of trusts causing concern concerns. For example, the Chair are occasionally invited in to discuss the concerns, but it is rare for Chairs to be involved in such and Chief Executive of CQC having meetings and in the past the CQC presence has not normally involved the Chief Executive of CQC escalation meetings with the Chair or her deputy. We welcome the fact that the new CQC Chief Executive has chosen to join Monitor and Chief Executive of the trust or at the next of a series of regular monthly meetings with BTT, which Monitor has been holding with organisation involved. 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.

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4.2. Impact of the investigations (continued)

Deloitte recommendation: 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 15. CQC needs to develop and than committing substantial CQC resources to an investigation, it might first suggest to the trust articulate a view about how to concerned that it should commission its own review of governance, or call upon other external drive improvement in an support, thereby ensuring that any recommendations are more likely to be owned by the trust. organisation where leadership, Suggestions of this kind would carry even more weight if CQC felt able to adopt a more creative use governance and cultural issues of its power to impose conditions on registration, including retrospectively. We understand that CQC are at the core of its concerns. 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.

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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 Deloitte commentary: 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 Overall we have seen evidence of of our case study trusts were risk summits convened by CQC and involving a wide range of good communication with other stakeholders at which the issues of concern were fully aired and actions to be taken by each of the stakeholders and particularly other relevant authorities were agreed. We have noted that in respect of Foundation Trusts there is regulators. 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).

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5.1. Liaison with other stakeholders

We have not detected any similar conflict in the position taken by Monitor. Two of our case study Deloitte recommendations: 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 16. CQC should review how it the nature of the concerns about performance, and an understanding by both parties of which of the engages with local authorities, bodies had the most appropriate powers and evidence base to justify intervention. especially in relation to their new powers and responsibilities in The nature of the liaison between CQC and Monitor is especially evident in the case of BTT, which the future. 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.

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: Deloitte recommendations:

The teams that conducted the two case study investigations were well led and highly competent. 17. CQC should question its However questions have arisen in a few of our interviews with external stakeholders about the generic approach to inspection quality, consistency and proportionality of some of the judgements made by CQC inspectors during and take steps to satisfy itself routine compliance work. In particular, we have been made aware of a concern about the use of that this generic approach inspectors at NHS trusts who have a background solely in social care and the problems this creates across the whole of health and for their credibility with clinicians. We consider that CQC should question its generic approach to social care, with acute hospitals inspection and take steps to satisfy itself that this generic approach across the whole of health and being inspected by people who social care, with acute hospitals being inspected by people who have never worked in the NHS, is have never worked in the NHS, is valid. valid. National Professional Advisors (‘NPA’): 18. CQC should consider, at an appropriate point, a review of its National Professional Advisers are an important clinical resource for CQC, however until very access to professional clinical recently, they appear to be have been used in a sub-optimal way. Although they were involved in advice and the use that it makes the investigations, either directly or indirectly by recommending clinical specialist support, their role of this advice. 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.

6.1. Other issues

Internal communication Deloitte recommendations:

We also consider that there are issues for the new Chief Executive to address in relation to 19. CQC should review the communications within CQC itself. We have observed above that many aspects of regulatory communication channels across decision making within CQC are highly devolved. The risks associated with this were managed at a the organisation to ensure there national level during the period we have been primarily concerned with by a Risk and Escalation is appropriate two-way Committee, which has subsequently been replaced by a new Regulatory Risk Committee. It is communication between the intended that the new committee should have a more strategic focus than its predecessor, but it has senior management team and the been in existence for too short a time to know whether this is likely to be the case. operational teams in the regions. 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.

Recommendations

Ref. Section Recommendation(s) Suggested Completion owner date 1.1 Strategic versus 1. The Board should identify those regulatory matters it considers to operational power be strategic. 2. Decisions relating to these powers should be reserved to the Board. 2.1 Evidence and 3. The decision to carry out an investigation under S.48, together propriety of with the reasons for the recommendation should be made in decision to writing. The final basis of the decision should be clearly investigate documented and both should be retained. 3.1 Resourcing the 4. Determine in advance a budget for the investigation, which investigation 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.

Recommendations (continued)

Ref. Section Recommendation(s) Suggested Completion owner 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 11. For each investigation, as part of the quality assurance process, processes 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

Recommendations (continued)

Ref. Section Recommendation(s) Suggested Completion owner date 4.2 Impact of the 15. CQC needs to develop and articulate a view about how to drive investigations improvement in an organisation where leadership, governance and cultural issues are at the core of its concerns. 5.1 Liaison with other 16. CQC should review how it engages with local authorities, stakeholders 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.

40 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │ Executive Summary │ Findings and commentary │ Recommendations │ Appendices 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  Section 2.1 and 2.3 – and where the trigger point was for investigation ii. Whether a reasonable degree of inspection and investigation of the Trusts was specified and  Section 3.2 undertaken taking account of the level of assessed risk and resources required 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  Section 3.2 and 3.3 specification

iv. Whether sufficient and appropriately skilled resources were allocated to collate information  Section 3.1 received, observe and draw conclusions

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  Section 4.2 control over the follow up was appropriate.

vii. Overall, whether the CQC regulation of NHS Trusts is proportionate and reasonable given the  Section 1.1 and 2.2 legal, regulatory and geographical context of the Trust; and the organisation context of CQC  (context of this is in relation to during the period April 2009 to July 2012 investigations)

viii. What changes, if any, should be made to CQC’s policies and procedures to improve the  Recommendations, Section 4.2, 5.1 and handling of similar cases in the future. 6.1

List of people interviewed as part of the review: List of people interviewed as part of the review:

CQC staff National Professional Advisors Director of Operations – Amanda Sherlock Ann Farenden Head of Regulatory Risk & Quality – Louise Dineley Dr Nick Bishop Deputy Chief Executive– Jill Finney External Stakeholders Deputy Director of Operations– Matthew Trainer Chief Operating Officer Monitor - Stephan Hay Compliance managers – Tony Allen, Rob Assall, Janet Ortega, and Chief Nurse NHS London – Trish Morris-Thompson Joanne Wildman Compliance Inspectors – Beverley Gray, Sue Fraser-Betts and BTT interviewees Marian Whittam Chief Executive – Clare Panniker Lead investigators – Adam Brown and Mandy Musgrave Medical Director – Dr Stephen Morgan Head of Regional Compliance – Vicky Wells and Ann Ford Director of Nursing – Diane Sarker Regional Lead - Debbie Westhead BHRT interviewees Head of Regulatory Design – Rachel Dodgson Chief Executive – Averil Dongworth Design Team Leader – Sarah Bell Medical Director – Dr Mike Gill Board members Director of Nursing – Flo Panel-Coates Chair – Dame Jo Williams Chair of ARAC – Prof. Deidre Kelly Commissioner – Kay Sheldon

43 Care Quality Commission Third party review of CQC regulatory approach © 2013 Deloitte LLP Introduction │ Executive Summary │ Findings and commentary │ Recommendations │ Appendices 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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