‘(a) views expressed by or on behalf of members of the public about health and social care services, (b) experiences of people who use health and social care services and their families and friends, (c) views expressed by Local Healthwatch organisations or Local Healthwatch contractors about the provision of health and social care services, (d) the need to protect and promote the rights of people who use health and social care services (including, in particular, the rights of children, of persons detained under theMental Health Act 1983 , of persons who are deprived of their liberty in accordance with theMental Capacity Act 2005 (c 9), and of other vulnerable adults), (e) the need to ensure that action by the Commission in relation to health and social care services is proportionate to the risks against which it would afford safeguards and is targeted only where it is needed, (f) any developments in approaches to regulatory action, and (g) best practice among persons performing functions comparable to those of the Commission (including the principles under which regulatory action should be transparent, accountable and consistent).’
‘We will not publish the stage in the operating model that providers are at currently, or the stages they may have been at previously. The Market Oversight Scheme is not acting as a credit rating agency; our legal duty is to inform Local Authorities only when a potential business failure is likely to cause a regulated activity to cease. Providing an external commentary on potential risk could precipitate failure which would put people who use services in a vulnerable position. This is the very situation which the Scheme is intended to avoid. Each specific provider will have particular risks and merely confirming the stage in the model is crude and open to misinterpretation if all facts are not known.’
‘“Likely” means that, on a balance of probabilities, a registered care provider satisfies the “business failure” and “unable to carry on a regulated activity” conditions (see above). We do not have to prove conclusively that the conditions will be satisfied, only that the conditions are more probable to occur than not. The decision will be based on a reasonable, fair and proportionate assessment of the information available from our assessment activity. There is, however, a possibility that actual business failure may never occur or the provider may never reach a position where it becomes unable to carry on a regulated activity even after Local Authorities have been notified by us that these events are likely. At all stages of the assessment of financial sustainability, we maintain open dialogue with providers and are transparent with them. There is always the opportunity for them to challenge us at any stage in the process by presenting new information about past performance and future strategy which could alter the views we may form. Before we make a decision on whether a provider is likely to become unable to carry on a regulated activity because of business failure, we will give providers the opportunity to confirm the accuracy of the information on which we intend to base the ultimate decision on financial sustainability.’
‘Providing an external commentary on potential risk could precipitate failure which would put people who use services in a vulnerable position. This is the very situation which the Scheme is intended to avoid.’
‘We adopt a 6-stage approach to the assessment of financial sustainability, as set out in Figure 1 below. Providers progress through the stages on the basis of our assessment of their financial sustainability. This allows us to come to a decision about the likelihood of business failure and of this leading to the cessation of at least one regulated service. Where providers are part of a wider corporate group, we engage with senior representatives of that group and focus our requests for information (in the context of its finances, operations and business) at the appropriate corporate level – for example, the executive team of the group. This enables us to assess the sustainability of registered providers in the Scheme in the most effective and least burdensome way. This diagram illustrates how our activities and engagement with providers will change if concerns about financial sustainability increase. This is a useful illustration, but the assessment process is not a “one size fits all” approach. Each provider and each individual scenario require different approaches at each stage. The length of time providers spend at each stage will also vary. It is best to think of this as an ‘evolving conversation’, which grows more complex and focused as the process moves up the stages. We also recognise that providers may pass through stages quickly and that some stages may be missed out in a fast-moving situation. We will not publish the stage in the operating model that providers are at currently, or the stages they may have been at previously. Each specific provider will have particular risks, and simply confirming the stage in the model is crude and open to misinterpretation if all facts are not known. Therefore, CQC will only disclose its assessment of financial risk to local authorities where it is under a duty to do so under the Care Act, or where it is necessary to protect and promote the health, safety and welfare of people using services.’
‘This stage is to identify and notify providers that will enter the Scheme. There is no suggestion at this stage that providers are at any risk of financial failure, only that they meet the thresholds set out in law which suggest they would be difficult to replace’. (2) Stage 2 – ‘Regular/standard monitoring’: ‘To carry out routine monitoring of providers’ finances and quality’
‘Where potential concerns have been identified at Stage 2. To carry out more in-depth analysis of providers’ finances and quality and to engage further with the provider as and when necessary’
‘Where concerns have been identified at Stages 2 or 3, further information will be requested from the provider. Heightened engagement will be necessary’
‘The statutory criteria set out withinSection 56 of the Care Act 2014 are met. A notification made under Section 56 seeks to provide advance warning to local authorities and NHSEI (where possible) that the business of a provider in the Scheme is likely to fail and that this failure is likely to cause cessation of one or more regulated activities.’
‘We do not have to prove conclusively that business failure will occur, and regulated activity will cease as a result. The primary purpose of CQC’s duty is to give local authorities advance warning that they may be required to discharge their duties under the Act. CQC will need to be satisfied that both conditions are ‘likely’, i.e. there is a real possibility of business failure and a real possibility that the provider will become unable to carry on the regulated activity as a result. (…) Notification to local authorities will only take place when we think that they may need to step in and carry out their duty under Section 48(2) because a regulated activity is likely to cease as a result of business failure. For example, if CQC is satisfied that the services will be continued by another provider following a transfer of the business, local authorities will not be required to perform their duties under section 48 and we will not be required to serve a notice. Decisions will be made on a case-by-case basis and the specific facts will determine whether we will notify local authorities. This does not mean that we must second-guess the ultimate decision of a local authority; the decision to trigger the local authority’s duty to ensure continuity of care is a decision solely for the local authority to make. (…) At all stages of the assessment of financial sustainability, we maintain open dialogue with the provider and are transparent with them. There is always the opportunity for them to challenge us at any stage in the process by presenting new information which could alter the views we may form. Before we make a decision on whether a provider is likely to become unable to carry on a regulated activity because of business failure, we will normally give providers the opportunity to confirm the accuracy of the information on which we intend to base the ultimate decision on financial sustainability. However, if we are concerned that further delay may pose a risk to people using services, we will not delay matters, particularly if the information has been verified by other means.’
‘The notification will provide as full a picture as possible as to what we believe will be the impact and timescales of the likely business failure on the registered provider’s ability to carry on the regulated activity. In the notification, we will explain why we believe that the local authority’s temporary duty to ensure care continuity may be triggered. It will explain CQC’s statutory duties under Section 56(1) and 56(2) of the Care Act, why the conditions for notification are met, as well as a brief summary of the requirements of local authorities under Section 48(2). Notifications will contain an assessment of the current situation and likely outcome and will highlight to local authorities where failure is not inevitable. We will clearly set out the risks of local authorities’ actions pre-empting actual failure and will promote close cooperation between them and the provider and its advisors. The notification will also remind local authorities that the act of notification itself is highly sensitive, and that it contains sensitive information that should not be shared more widely by them. Our notification to local authorities will always include: (a) A clear statement that this provides as much notice as possible given the circumstances specific to the provider, giving them the opportunity to prepare to implement contingency plans, and that the next steps are for the local authority to engage with the provider/Insolvency Practitioner (IP). (b) What the known intentions of any IPs are, for example, which specific care homes are at risk of closure. (c) A paragraph summarising how we came to our decision that the conditions for notification (as set out above under Stage 6) have been met. (d) Which business failure activity (appointment of an administrator or receiver, for instance) is considered likely to happen and when this is likely to occur. (e) Which registered providers and what regulated activities are affected, and in which local authority areas they deliver care; local authorities will then be aware of which other local authorities have received the notification. (f) Details on how to contact specific individuals at the provider and within CQC for further information or advice.’
‘To deliver the aims of the Scheme it may be appropriate in the circumstances to share the fact of notification with key partners who will need to support any contingency planning, such as the Department of Health and Social Care (‘DHSC’), Local Government Association (‘LGA’), the Association of Directors of Adult Social Services (‘ADASS’) and NHSEI, who will inform necessary clinical commissioning groups. Where it has been deemed appropriate for CQC to share the notification with other key partners, we will set out risks and reminders consistent with those set out above (in relation to local authorities). We may also publish the fact of notification to the wider public to prevent people who use services and their carers and families getting different accounts of the facts. Whether we do this and the timing of it will be very carefully considered. For example, CQC will consider whether it is appropriate to delay any public announcement of a notification to reduce the risk of disruption that an announcement may cause. The potential impact on the people using the services will be at the heart of the decision to publish a notification and when to publish it. While we are clear there are advantages in sharing the notification, there are also important aspects that would need to be handled carefully to avoid any action being taken that will pre-empt or precipitate failure. The notification is of likely failure and not definite failure. There is a very real risk that, if not handled and communicated properly, wider sharing of a notification could pre-empt a failure that may not otherwise have happened or could increase the impact of a failure. It is important that the process of notification is shared in a consistent manner and from a single source. We will always inform the Department of Health and Social Care, and where appropriate in the circumstances, other regulators (for example, Care Inspectorate Scotland, Care Inspectorate Wales, and the Regulation and Quality Improvement Authority in Northern Ireland. Beyond that, in deciding when and with whom we share the fact of notification, we will act in a fair, reasonable and proportionate way, taking account of the specific circumstances in each case. In particular, we will consider the impact of failure and whether wider notification may adversely impact on people using the services: for instance, whether we would be likely to jeopardise the success of a restructuring plan and, in doing so, have a negative effect on a provider’s ability to deliver care.’
‘In everyday usage one meaning of the word likely, perhaps its primary meaning, is probable, in the sense of more likely than not. This is not its only meaning. If I am going walking on Kinder Scout and ask whether it is likely to rain, I am using likely in a different sense. I am inquiring whether there is a real risk of rain, a risk that ought not to be ignored.’
‘Secondly, the section requires the court to be “satisfied” of the company’s actual or likely insolvency but only to “consider” that the order would be likely to achieve one of the stated purposes. There must have been a reason for this change in language and I think it was to indicate that a lower threshold of persuasion was needed in the latter case than the former. … Thirdly, some of the stated purposes are mutually exclusive and the probability of any one of them being achieved may be less than 0.5 but the probability of one or other of them being achieved may be more than 0.5. I doubt whether Parliament intended the courts to embark on such calculations of cumulative probabilities. Fourthly, … section 8(1) only sets out the conditions to be satisfied before the court has jurisdiction. It still retains a discretion as to whether or not to make the order. It is therefore not unlikely that the legislature intended to set a modest threshold of probability to found jurisdiction and to rely on the court’s discretion not to make orders in cases in which, weighing all the circumstances, it seemed inappropriate to do so.’
‘It is to be observed that section 72(1) refers to likelihood rather than to risk, and I agree with May LJ that “likely” in this context means “more probable than not”. This construction of the phrase is, I think, one which not only accords with the natural meaning of the words according to ordinary English usage, but also with what may be presumed to have been the intention of Parliament.’
‘As it seems to me, a real as opposed to a remote risk of insolvency is a significantly lower threshold than being either on the verge of insolvency or likely to become insolvent.’
‘To put a company into administration is a serious matter. Creditors, as well as the company itself, can apply. To expose the company to all the expense, danger, and problems associated with administration is a serious matter. It is most unlikely that Parliament intended this when there was only a real prospect of insolvency rather than where insolvency was more probable than not.’
‘Even where particular words used in a statute appear at first sight to have an apparently clear and unambiguous meaning, it is always necessary to resolve differences of interpretation by setting the particular provision in its context as part of the relevant statutory framework, by having due regard to the historical context in which the relevant enactment came to be made and, to the extent that its purpose can be identified (which may require examination of admissible travaux préparatoires), to arrive at an interpretation which serves, rather than frustrates, that purpose.’
‘An important element in the construction of a provision in a statute is the context in which that provision was enacted. It is plain that those affected by the statute when it comes into force are better placed to appreciate that context than those subject to it 30 years later’
‘… we understand the damage that could be done to a provider from any disclosure that it is in financial difficulties and therefore may not be able to continue with its business. There will always be a clear audit trail of the decision made and CQC’s thought process behind any such step taken. This is not intended to be a blanket power for CQC to disclose commercially sensitive information to any party it chooses. The decision will always be based on the specific facts of each case, and providers will be given advance notice of a decision to disclose, unless exceptional circumstances require disclosure without notice.’