National Care Standards Commission Regulations 2001

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The Minister of State, Department of Health (Jacqui Smith): This is a two-day process, and I am sure that some of the points made today will be repeated tomorrow. The comments of the hon. Member for North-East Hertfordshire (Mr. Heald) ranged beyond registration and fees. Unfortunately, he over-emphasised the subject of care home beds. Once again, he used figures that were wrong.

I share the concerns of local authorities and others about capacity in the care home sector. That is why the Government have invested more money in social services departments to enable them to maintain and improve fee levels for their residents. Moreover, through the £300 million building capacity grant, we have ensured that local authorities can take action to stabilise the care home sector and reduce delayed discharges from hospital, as they are already successfully doing.

However, I would like to put the meat of the regulations in a different context. They will ensure that there is a comprehensive and consistent framework of regulation throughout the social care services, which has been clearly laid down by the Government since

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the publication of the 1997 White Paper, ''Modernising Social Services''. That policy has been extended to encompass most independent health care services. Although we shall be looking in more detail tomorrow at the registration of private and voluntary health care services, I shall respond to the points that the hon. Member for North-East Hertfordshire made.

It is important that we provide a consistent framework of standards for independent health care and social care, which we have achieved through the National Care Standards Commission. As my right hon. Friend the Secretary of State has made clear, we will also consider how we can ensure that regulation delivers higher quality and safe services for users and patients with the minimum level of registration, regulation and duplication.

The context of the regulations is an old system riddled with gaps and anomalies for social care and independent health care services. It is set and administered in different ways by different authorities. Some providers are not regulated, which is why the need for reform and improvements in the regulatory framework was recognised and supported by all parties during proceedings in the Care Standards Bill.

The Care Standards Act 2000, and the new independent National Care Standards Commission will enable us to regulate all such services and to apply regulations and national minimum standards consistently to all providers of services. They put the service user's needs at the heart of the regulatory system. I make no apology for that, because we are discussing services provided by establishments and agencies often to the most vulnerable people who need those services. Those people are entitled to the assurance that those who provide or manage the services are fit to do so and that they are financially secure and not subject to sudden closure. That is a big part of the framework.

The regulatory framework recognises that the interests of providers and users often overlap. Good, well-run services should be allowed to continue providing care for service users. However, as in the NHS, we must ensure that services are organised around the needs of users and not providers. That is why we consulted widely on all the regulations and national minimum standards and listened to the views of the wide variety of interested parties who responded. We have subsequently made appropriate amendments to regulations following consultation. [Interruption.]

The Chairman: Order. I am sorry to have to remind the Committee that the use of personal organisers and hand-held computers in Committee has been expressly disallowed by the Chairman of Ways and Means.

Jacqui Smith: The hon. Member for North-East Hertfordshire made a point about the reports of the Joint Committee on Statutory Instruments. I am aware of its criticism of the drafting of regulation 11 in relation to regulation 10 and perhaps I can outline the reasoning behind regulation 11. The Joint Committee suggested that there was a conflict between regulation 11, which requires the

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commission to issue a notice setting out that regulation 10 has been breached, and regulation 10, which requires a registered person to return a certificate of registration to the commission not later than the day of cancellation of registration. However, section 11 of the Care Standards Act 2000 requires the commission to issue a notice giving a period within which action must be taken to comply with the regulation. The Joint Committee questioned how regulation 11 could apply, as a registered person is required to return a certificate by a specific date. On that basis, a further period for compliance is impossible.

While I recognise that regulation 11 is flawed in its drafting, as the Joint Committee suggested, it was included for the best possible motives. We are conscious that it might be harsh to go directly to prosecution in relation to non-return of a certificate under regulation 10 when there might be extenuating circumstances. Regulation 11 was intended to give providers the opportunity to explain why they had not met the specified date for return and to comply with regulation 10 before proceedings had started.

As that is the policy intention, we must consider how the regulations might be amended so that regulation 11 works effectively with regulation 10 and the flexibility that regulation 11 was intended to achieve is maintained.

Mr. Heald: Can the Minister give us some insight into how that happened? It is obviously a substantial error and seems to have happened three times.

Jacqui Smith: It is the same error, which—dare I say it—has happened three times; the hon. Gentleman obviously wants to make the most of that. I explained to the Committee that it happened because we responded to the need for flexibility in the administration of the regulations—the hon. Gentleman spent considerable time during his opening speech demanding that flexibility of the Government. That is how the problem arose, but we shall ensure that the original flexibility and responsiveness is reflected in the amendments to the regulations.

The registration regulations provide a single gateway for registration with the National Care Standards Commission. They have been drafted to set out common processes for achieving registration for all providers and, where necessary, managers of services. The commission will apply the regulations to all in the same way.

The main requirements in the regulations mirror those already in place under the Registered Homes Act 1984 and the Children Act 1989. However, there are some new elements, including requirements relating to financial viability, to which the hon. Member for North-East Hertfordshire alluded. They require providers to demonstrate how their services will be viable at the time of registration and in future. They also provide the commissioner with the power to obtain detailed information about the finances of a provider if necessary. We would expect those powers to be used in only a small minority of cases.

The hon. Gentleman asked why the financial requirements were necessary. The regulations require

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providers to demonstrate that they have the resources to operate securely the services that they intend to run at the time of registration and in the longer term. The new requirements stem from the case of the registered homes tribunal ex parte Hertfordshire county council, in a judicial review in the High Court. The case was about the financial viability of an applicant for registration at the time of the application, and their continuing viability. The court ruled in favour of Hertfordshire and made clear statements that continuing financial viability was essential and an important issue on which regulators must be able to make a judgment. We have sought to reflect that in the regulations.

It is essential that providers seeking registration give appropriate information about the long-term financing of their services, and that the NCSC has the power to take action where the viability of a provider is not secure. I am sure that hon. Members will be aware, as I am, of home closures, sometimes caused by the undisclosed financial problems of providers, and the impact that that has on service users. It is entirely right that providers should demonstrate that they are secure financially.

The hon. Member for North-East Hertfordshire asked about accounts. The running accounts of a home must be kept on a regular basis. They include rent, mortgage payments and expenditure on food, heating, salaries and staff wages, and should be made available to NCSC inspectors as required. The NCSC may require annual accounts each year; other financial data will be required as necessary, in what we expect will be a relatively small number of cases.

Mr. Heald: Clearly, what the Minister has said could mean that a huge number of small businesses are subject to unnecessary and burdensome inquiries from the commission. Will there be guidance, or something else, to focus the NCSC so that it just hits a few malefactors rather than laying an immense burden on a lot of innocent people doing a perfectly worthwhile job?

Jacqui Smith: I have outlined why financial viability is necessary, and the ways in which the NCSC will investigate it. I agree with the hon. Gentleman that its inspection and regulatory operations should not be overly burdensome for care providers. It is very clear not only that the Government have set that down as the NCSC's remit but that the NCSC agrees that that is its remit. I am not sure that it is necessary to lay down the details of what will be appropriate in a financial investigation. The NCSC has already stated its willingness to apply its powers flexibly.

New registration regulations have been introduced to deal with applications from providers to vary the conditions of registration. Under current legislation, it is possible for providers to apply for various conditions of registration, but the regulator is under no obligation to deal with such applications or to make a decision. The regulations set out a process by which providers may apply for variations and the commission must make a decision to allow or refuse them. Providers will have a right to appeal against such decisions.

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