Open consultation

Changes to regulations relating to the Care Quality Commission: regulatory impact assessment

Published 26 April 2024

Applies to England

This is a regulatory de minimis assessment.

Overview of the policy proposal

The proposal is to:

• remove the expiry date clause inserted in The Health and Social Care Act 2008 (Regulated Activities) Regulations 2014, regulation 1(6), because it is the government’s intention that the Care Quality Commission (CQC) continues to regulate the activities set out in the 2014 regulations beyond 31 March 2025 to ensure patients and service users receive regulated care to the standards set by the government and overseen by CQC

• remove the existing exceptions from schedule 1 to the 2014 regulations, 4(3)(f) and (g) for provision of treatment at temporary sporting and cultural events and provision of treatment at sporting activities in a sports ground or gymnasium

• introduce a regulatory requirement for providers registered with CQC who operate mental health units, to notify CQC within 72 hours as far as reasonably practical, about use of defined restrictive practices

Direct costs to business

Removal of expiry date clause

The 2014 regulations set out the activities CQC regulates (‘regulated activities’). Any health and social care provider who carries on a regulated activity is required to register with CQC. The 2014 regulations also set out the fundamental standards that all registered providers must comply with. The 2014 regulations expire after 31 March 2025. In order to ensure that the requirements in these regulations continue to apply, the Department of Health and Social Care (DHSC) amended the 2014 regulations to extend the expiry date to after 31 March 2025 through an affirmative statutory instrument.

The government intends CQC to continue regulating providers against the standards in the 2014 regulations. In order to do that, the government intends to remove the expiry date clause and introduce 5-yearly reviews. As this will retain the current arrangements there are no direct costs to business expected as a result of this change in regulations.

Removing the temporary cultural and sporting events and sporting activities exceptions

Background to the policy

Following the Manchester Arena Inquiry (MAI) volume 2 report, it was recommended that DHSC should consider the standard of provision of healthcare at events, and that consideration should be given to this standard being contained in statutory regulation and be enforced by a regulator (recommendations 132 to 134). 

Additionally, CQC is aware of significant risk in the provision of independent medical care at temporary sporting and cultural events (such as festivals, sporting or motor sports events). CQC is concerned that continuing to have unregulated care in these settings and others (for example, sporting activities) will have a negative effect. This unregulated care has, in some cases, resulted in serious harm to individuals receiving treatment.

In line with the objectives of the MAI recommendation, DHSC is proposing to make an amendment to the 2014 regulation. This seeks to remove 2 exceptions which, in their current form, mean that the following activities relating to the treatment of disease, disorder or injury (TDDI) are not within CQC’s regulatory remit:

1. The provision of treatment in a sports ground or gymnasium (including associated premises) where it is provided for the sole benefit of persons taking part in, or attending, sporting activities and events, as set out at schedule 1, paragraph 4, sub-paragraph (3)(f) of the 2014 regulations.

2. The provision of treatment under temporary arrangements to deliver healthcare to those taking part in, or attending, sporting or cultural events as set out at schedule 1, paragraph 4, sub-paragraph (3)(g) of the 2014 regulations. The above proposal will also bring the regulated activity of TDDI where it is provided for the sole benefit of persons taking part in, or attending, sporting activities at a sports ground or gymnasium into scope. This is necessary due to concern that continuing to have unregulated care in this setting will have a negative effect. As noted above, this unregulated care has, in some cases, resulted in serious harm to individuals receiving treatment and should be regulated in order to improve safety and quality of healthcare provision.

Aim or policy intention

Under the 2014 regulations, TDDI is listed as a regulated activity (see paragraph 4 of schedule 1 to the 2014 regulations). Accordingly, a provider will, as a general rule, be required to register with CQC and will be subject to CQC regulation when carrying out that activity (and any other regulated activity listed in the 2014 regulations).

However, currently within the 2014 regulations, there are exceptions which mean in certain specified cases TDDI is not a regulated activity and therefore not within CQC’s remit.

The result is that a provider who only ever carries out activity covered by these exceptions need not register with CQC and will fall outside its regulatory remit. By contrast, where a provider carries out activity that falls within an exception but also carries out other activities that are not excepted then that provider will have to register with CQC and will be subject to regulation. Note that this is only so far as its non-excepted activities are concerned.

This proposal is focused on the removal of 2 of these exceptions. These can be found in paragraphs 4(3)(f) and 4(3)(g) of schedule 1 to the 2014 regulations (see further detail below).

Removal of the exceptions and impact 

Removing these exceptions will enable regulation of TDDI in the above cases. There have been multiple reports of unsafe practice, sexual assault and deaths arising from shortcomings in care from unregulated providers at temporary events, and there is concern that continuing to have unregulated care in all settings in the exceptions has a negative effect.

Removal of the exceptions will also provide clarity for providers that all TDDI on an event site is regulated. There is currently a lack of clarity around this, as the conveyance of a patient to hospital by ambulance is a regulated activity. It will also make it easier for CQC to monitor providers.

Schedule 2 to the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 includes a general exception for the provision of first aid (9(a)(b)(c)). We are not proposing to remove this exception, and the proposed removal of the exceptions to the regulated activity of TDDI will not alter that. First aid remains out of scope of CQC’s remit due to schedule 2, paragraph (9) of the 2014 regulated activities which includes a general exception for first aid that applies in whatever circumstances it is provided.

There is a cross reference to the exceptions in schedule 1, paragraph 4 (3)(f) and (g), within another exception at schedule 1 paragraph 9(3), which relates to transport services provided within the confines of the site or venue being used for sporting activities or events, or cultural events. We are not proposing that this exception is removed because it would have wider unintended consequences - such as, for example, regulating transport services which might involve only a single journey across an event site. However, this cross reference will no longer work and new wording will be needed to ensure that transport services provided at a location used for the activities and events currently referred to in paragraph 4(3)(f)(g) continue to be excepted by the amended regulations.

Schedule 2 to the 2014 regulations includes a general exception for medical and dental services provided under arrangements made by a service user’s employer (5(1)(a)). The proposed changes do not affect this exception, and it will remain the case that the care and treatment provided to professional athletes and sports people under arrangements made by their employer remains out of scope.

DHSC has commenced separate but linked work developing a standard for the provision of healthcare at events. CQC will consider this standard, once published, when regulating the medical care (TDDI) at events following the removal of these exceptions.

We anticipate we will implement this change in the 2025 to 2026 financial year and are considering appropriate transitional arrangements to ensure there is a sufficient lead-in time. Following evidence gathering, this will include consideration of transitional arrangements for events where procurement processes are already underway.

Potential impacts on cultural and sporting events, including on grassroots participation, will be explored more fully based on the evidence gathered through the consultation.

Businesses in scope: estimates of the number of businesses providing event healthcare

Despite research by CQC through professional associations, the British Association of Insurers, the Events Industry Forum, individual expert and UK Athletics, no concrete estimate for the number of providers impacted by this policy could be determined. A basic scoping activity identified 89 providers, of which 53 are already registered with CQC for delivering other regulated activities. This leaves 36 possible providers not registered with CQC. However, the number could be higher than this as many services only advertise on social media, for example.

It is possible that the requirement to register will result in some providers withdrawing from the market, or not providing medical care at events, as they are unable to meet the requirements of regulation. Currently the regulatory gap for events means providers whose CQC registration has been cancelled due to significant concerns about the safety and quality of the care they offer, can continue to operate in the events sector. There is currently uncertainty as to how this proposed change may impact smaller events or sporting activities.

Therefore, for the purposes of this analysis, cost estimates have been provided for 25 to 100 providers to capture the best estimate and range of uncertainty.

Quantification of the (direct) costs and benefits to business

As a result of this proposed change, it is expected there will be 2 direct costs that will have an impact on businesses that provide treatment at events. These are:

• CQC registration fee (ongoing cost, estimated on a per-business basis)
• additional administrative burden (implementation cost, estimated on a per-business basis)

The total cost of registration fees across all newly regulated providers is estimated at between £29,400 and £117,700 a year (in other words, £1,200 per provider). There may be some additional costs for new business that are created and have to register in the future. The number of new businesses that are created each year are uncertain, however, it is likely that these additional costs would be low.

Estimate of costs per provider

The estimated cost to businesses, based on a range of estimates, can be found below. As mentioned above, there is uncertainty regarding the number of newly regulated providers in this industry. The lower estimate assumes there are 25 providers and the higher estimate assumes there are 100 providers.

The CQC registration fee per provider is estimated to be £1,200 per year. This is an ongoing cost paid per year.

The administrative burden per provider (for example, implementation cost) is estimated to be £1,900. This would be paid in the first year of implementation.

Estimate of costs for the whole industry

For all businesses in the current market, a cost estimate is provided below. As above, this is calculated using a range of estimates, as there is uncertainty regarding the number of newly regulated providers in this industry.

CQC registration fee for all providers based on estimates: £29,400 to £117,700 per year. This is an ongoing cost paid per year. Cost estimates are based on 2023 to 2024 prices.

Administrative burden fee for all providers based on estimate (for example, implementation cost): £3,700 to £74,300. This would be paid in the first year of implementation.

CQC registration fee: calculation method

The total cost of registration fees across all newly regulated providers is estimated at between £29,400 and £117,700 a year (that is, £1,200 per provider). CQC fees depend on providers’ type of service or scale of service. To estimate the average fee cost to business, it has been assumed the providers will pay the fee associated with independent ambulances that are single-sited (which is the case for almost all independent ambulance services). A newly registered independent ambulance service with one location incurs fees of £1,200, which forms the basis of the calculation above.

Additional administrative burden on businesses

Some providers currently out of scope will be brought into scope. This will result in staff member costs to register as a provider. CQC estimates that the form-filling process (registration and statement of purpose) would take from around 5 hours up to potentially a week, plus any time to make sure premises are ready.

The additional administrative burden on businesses is a one-off implementation cost, estimated at between £3,700 and £74,300 which would be faced by providers (so not payable to CQC). The lower estimate assumes that there are 25 providers that use one day of admin. The higher estimate assumes that there are 100 providers that use 5 days of admin). Staff costs are based on the average UK daily earnings in 2023 from Census data.

Notification of use of restrictive interventions

Background to the policy

Recommendation 11 of CQC’s Out of Sight, who cares? report called for better oversight of the use of seclusion and segregation (practices which prevent people from mixing freely with their peers) in mental health inpatient settings. 

It called for commissioners, NHS England and, subject to government and Parliamentary approval of the required change to CQC regulations, CQC to be notified when patients are placed in seclusion or long-term segregation. 

Other reports such as Baroness Hollins’ report: My heart breaks - solitary confinement in hospital has no therapeutic benefit for people with a learning disability and autistic people have highlighted similar concerns about the use of restrictive interventions in people with a learning disability and autistic people. 

Aim or policy intention

The policy aim is improved oversight, by more timely reporting by providers to CQC on the use of restrictive practices (including seclusion and segregation) for all patients in mental health units. 

We expect that the introduction of this amendment would also lead to a reduction in the use of restrictive practices. Moreover, more timely reporting to CQC will allow CQC to take regulatory action where they believe there is excessive or inappropriate use of restrictive practices. 

How we will do this

We will do this by introducing a regulatory requirement for providers registered with CQC who operate mental health units to notify CQC within 72 hours, as far as reasonably practicable, when patients are subjected to any of the following restrictive practices: 

• physical restraints, chemical, and mechanical restraint (as defined in the Mental Health Units (Use of Force) Act 2018)
• instances of people being prevented from mixing freely with their peers defined as ‘isolation’ in the Mental Health Units (Use of Force) Act 2018

Quantification of the (direct) costs and benefits to business outlined above

Providers of NHS-funded mental health, learning disabilities or autism spectrum disorder services for children, young people and adults already report a wide range of statistics to the Mental Health Services Dataset (MHSDS) and respective official statistics on the use of restraint are produced as part of the annual Mental Health Bulletin published by NHS Digital.

We assumed that the only costs borne by these providers will be the costs of reporting the specified data on use of restrictive practices to report to CQC. As an illustration, costs for a similar set of providers to provide data annually about the use of the Mental Health Act 1983 legislation (known as the KP90 return) to NHS Digital was estimated at over £440,000 a year (2023 to 2024 prices) (see Mental Health Act Statistics, Annual Figures, 2021 to 2022). We assume that the cost for reporting within 72 hours will not cost more because the process of reporting the information to CQC will take the same amount of time regardless of how soon after the event the information must be reported. The costs of tracking and recording the information will also be the same. However, as there is some uncertainty, our costs are a range with a low and high estimate, and this is covered in the consultation. 

Using the market segmentation proportions in table 1 below, the £440,000 estimated cost corresponds to the segments ‘public funding and public sector supply’ and ‘public funding and independent sector supply’, that is, approximately, 97% of the market. The cost to businesses - that is, costs to ‘private funding and independent sector supply’ - corresponds to 2.8% of the market. We therefore calculate that the annual cost to businesses would be approximately £12,000 as a central estimate.

We have considered potential uncertainty in exact market segmentations within our sensitivity analysis and have assumed a 2% range in the market share for privately funded businesses in a high- and low-cost scenario. That is a 0.8% and 4.8% share of the market for business in our low-cost and high-cost estimates, respectively. We therefore estimate annual costs to businesses as between £4,000 and £21,000.

Table 1: segmentation funding and supply, mental health hospitals, England 2023

Funding and supply	Segmentation funding and supply, mental health hospitals, England 2023
Private funding and independent sector supply	2.8%
Private funding and public sector supply	0.0%
Public funding and independent sector supply	29.4%
Public funding and public sector supply	67.8%
Total: NHS and independent sector providers	100.0%

Source: Laing and Buisson (2023). Healthcare Market Review, 34th edition, London.

This estimate is used as a proxy for annual costs for reporting new data as required by the amendment. This may be an overestimate of costs to businesses, as it is likely that the KP90 return had a greater number of measures than the data collection required by this amendment - it covered counts of overall detentions under the Mental Health Act and under some of its sections (at least 23 fields). See: NHS Digital, Inpatients formally detained in hospitals under the Mental Health Act 1983 and patients subject to supervised community treatment: 2015 to 2016, annual figures - data definitions.

This may also be an overestimate as the costs presented here relate to the additional collection of data, however the amendment is for a timelier reporting of existing data, which is expected to be less costly for providers.

Future regulation amendments

Following a review of the regulations, further amendments may be made in the future. If further amendments are made to CQC regulations in the near future which, combined with the impact of these amendments, would have required a full impact assessment, then a full impact assessment would be developed and would reconsider these amendments in that version.

Notification of use of certain types of restrictive interventions

The proposed regulation applies to mental health units. CQC is interested in extending it beyond mental health provision and into other settings such as patient transport, acute care and adult social care. This approach may be considered in due course.  

Wider impacts and transfers

Removing the temporary events exclusion: wider costs and benefits

Where newly regulated providers do not meet the requirements, CQC can take enforcement action against providers. As is the case for current CQC enforcement action, the cost of enforcement for newly regulated providers will be borne by DHSC. This is estimated to be an ongoing cost of between £3,600 and £14,500 a year (estimated number of providers multiplied by the costs of independent ambulances a year, at 2023 to 2024 prices). As previously, the lower estimate assumes that there are 25 providers and the higher estimate assumes that there are 100 providers. Adding this cost to the total cost to business, the total costs of this policy would be between £36,800 and £206,500.

Part of the rationale for this policy was due to CQC having been contacted on numerous occasions with concerns about medical services provided at events which are not currently regulated. In some cases, concerns about the care provided have led to patient harm, and there have been occasions where CQC has been called to take action but cannot. 

Notification of use of certain types of restrictive interventions: wider costs and benefits

The benefits of this amendment have largely been captured by existing analysis within the Mental Health Units (Use of Force) Act 2018 impact assessment. (This was not published but was cleared internally by DHSC’s chief economist.)

Monetised benefits are estimated here using available data^{[footnote 1]} on the number of physical restrictive interventions, related injuries and deaths to calculate quality-adjusted life year (QALY) gains for individuals who are likely to be subject to restrictive interventions, to reflect the expected reduction of deaths and injuries due to reduction in restrictive interventions. QALY is a measure of the state of health of a person or group in which the benefits, in terms of length of life, are adjusted to reflect the quality of life. One QALY is equal to 1 year of life in perfect health.

This analysis uses a maximum effectiveness rate to assume all deaths recorded within custodial mental health settings will be avoided as a result of stopping physical restrictive interventions, arriving at a discounted benefit of £169 million over 10 years for averted deaths. Similarly, £6.3 million and £11.4 million of benefits were calculated for averted patient injuries and staff injuries respectively, discounted over 10 years.

We are unable to estimate the exact amount of benefit arising from additional and more timely reporting to CQC beyond that set out and captured within the existing impact assessment, however, this amendment is expected to contribute towards the policy aims of achieving a reduction in use of restrictive practices. 

Additionally, the use of a maximum effectiveness rate within the impact assessment means further benefits should not be quantified here, to prevent the possible double counting of benefits across work.

Impacts on small businesses: direct or indirect

Removing the temporary events exclusion

As a case example, based on current registrations for independent ambulances (the most similar type of service to newly regulated healthcare providers at events), it is expected most providers of healthcare at events are small businesses. It is not expected this will change once taking into account other types of provider services.

The cost of this measure is estimated at between £1,200 to £1,900 per provider, and CQC fees increase with the number of sites a provider has, so is proportionate to their scale. Small businesses are expected to have costs on the lower end of the estimate, and we would expect providers to be able to recoup this additional cost through their client charges. We do not expect this measure to impact on other types of healthcare providers.

Notification of use of certain types of restrictive interventions

We are not aware of data on the proportion of privately funded mental health units that are small businesses. However, as outlined above in the summary of costs, the proportion of mental health units that are privately funded is assumed to be low, between 1.4% and 5.4%. We expect the cost and burden to small businesses to be minimal, since the additional requirement for all businesses is the immediate notification of certain types of restrictive interventions to CQC, and not the collection of any new data or information.

Quantification of the (direct) costs and benefits to business outlined above

The costs above occur in year one at 2023 to 2024 prices. Costs are summarised in the table below.

Table 2: total costs to business

Regulation	Cost	Type of cost	Low estimate	High estimate
Regulation 2 (removing the temporary events exclusion)	Administrative burden	Implementation	£3,700	£74,300
Regulation 2 (removing the temporary events exclusion)	CQC registration fee	Ongoing cost	£29,400	£117,700
Regulation 3 (notification of use of certain types of restrictive interventions)	Notifying restrictive interventions to CQC	Ongoing cost	£4,000	£21,000
All regulations	Total cost to business	Year one	£37,100	£213,000

Given the scale of these total costs, the impact has been considered for the first year of implementation, rather than over a 10-year appraisal period, to provide a proportionate level of analysis of the impacts.

The regulations are due to be amended in 2025, so it is recognised that there would be some inflationary impact on these figures by the first year of implementation (2025 to 2026), however these calculations have not been done in the above table because it was not felt to be proportionate against the scale of the policy and impact of those changes.

1. NHS Digital (2017), Mental Health Bulletin: 2016 to 2017 annual report, table 7.
   
   DHSC calculations based on Mind Freedom of Information Act request to mental health trusts in England.
   
   Independent Advisory Panel on Deaths in Custody (2015), Statistical analysis of recorded deaths between 2000 and 2014. ↩