Annual report and accounts

2018/19

HC 2479
Care Quality Commission

Annual report and accounts

2018/19

Presented to Parliament pursuant to paragraph 10(4) of Schedule 1

of the Health and Social Care Act 2008.

Ordered by the House of Commons to be printed on 24 July 2019.

HC 2479
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Contents

Who we are and what we do 2

Performance report 4

Foreword 5

Performance summary 7

Performance analysis 11

Accountability report 51

Corporate governance report 52

Remuneration and people report 68

Parliamentary accountability and audit report 82

Certificate and report of the Comptroller and Auditor General 84

to the Houses of Parliament

Financial statements 87

Statement of Comprehensive Net Expenditure 88

Statement of Financial Position 89

Statement of Cash Flows 90

Statement of Changes in Taxpayers’ Equity 91

Notes to the financial statements 92

 Who we are and what we do

Who we are and what we do

Who we are: The Care Quality Commission (CQC) is the independent
regulator of health and adult social care in England. HOW WE ARE
Adult Social ORGANISED Strategy and
Care Intelligence
OUR PURPOSE We are organised under
six directorates
We make sure health and social care services provide people with safe, effective,
compassionate, high-quality care and we encourage care services to improve. Hospitals Regulatory,
(including Customer and
mental Primary Corporate
health) Medical Digital Operations
STRATEGIC Services and
PRIORITIES Integrated
1 4 Care

PE RFORMANCE RE PORT
Encourage Improve our
improvement, efficiency and
innovation and effectiveness.
sustainability
in care.
2 3 Excellence Caring OUR
VALUES Integrity Teamwork
Deliver an Promote a
intelligence-driven single shared view
approach of quality.
to regulation.
We are independent, but we report to Parliament through the Department of Health
and Social Care (DHSC).

OUR We work with other regulators, local authorities and commissioning groups, health
ROLE and social care organisations, and organisations that represent, or act on behalf of,
WHO people who use services, including the Healthwatch network.
Register Monitor, inspect, rate Enforce Independent voice WE WORK
We register health and We monitor and inspect We use our legal powers We speak independently, WITH Healthwatch England, the national consumer champion for users of health and social
adult social care providers. services to see whether to take action where we publishing regional and care services, is a statutory committee of CQC’s Board.
they are safe, effective, identify poor care. national views of the
caring, responsive and major quality issues in
well-led, and we publish health and social care, and
what we find, including encouraging improvement The National Guardian’s Freedom to Speak Up Office (NGO) is jointly funded by CQC,
quality ratings. by highlighting good NHS Improvement and NHS England. CQC’s Chief Executive has responsibility as
practice. Accounting Officer for the NGO and for Healthwatch England.

2 Care Quality Commission Annual report and accounts 2017/18 Care Quality Commission Annual report and accounts 2018/19
2017/18 3
1
Performance
report
The performance report consists of four sections:

Foreword from CQC’s Chair and Chief Executive 5

Performance summary 7
A performance summary for 2018/19 that highlights important achievements,
progress towards our objectives and targets, and our impact as a regulator.

Performance analysis 11
A performance analysis for 2018/19 that is a detailed explanation of our performance
during the year, with evidence to support the performance summary.
Foreword

Peter Wyman CBE DL Ian Trenholm

Chair Chief Executive

In 2018/19 we made good progress and focused on what we need to do to

complete the delivery of our strategy. In 2019/20 we will concentrate on
improving our efficiency and effectiveness to make it easier for members of
the public to use our information, for providers to work with us, and for our
people to do their jobs.

Our progress 2017/18. We must continue to improve in this

PE RFORMANCE RE PORT
area, including developing new ways to make
Using our baseline understanding of the quality our information easier for members of the public
of care, over the last year we continued to to access.
encourage improvement and to help inform
choice for people. We know that many providers As we continue to make these improvements,
now use our five key questions in their we know we need to keep our focus on protecting
governance, an important part of building a people who are most at risk of poor care. In our
shared view of quality. We also built on our strong review of restraint, seclusion and segregation for
reputation for raising the issues that need to be people with a mental health problem, a learning
tackled, such as through our State of Care report. disability or autism we stressed the urgent need
to fix a failed system of care and to strengthen
Our local system review programme has enabled the safeguards that protect the rights of people
an understanding of how different parts of the held in segregation. Some of the hospitals we
health and social care system need to work visited during the review have features of
together better to improve the experience of institutions that are at risk of developing a closed
care, especially for people who may struggle to and even punitive culture. The treatment of
have a voice and to secure their right to good people at Whorlton Hall in County Durham
care. Our stakeholders have told us that our reinforced how difficult it can be to uncover
reviews have helped them to understand how abusive practices in such institutions. We are
care is coordinated across their area. looking closely at what we could have done
Our intelligence-driven approach to monitoring differently to detect this abuse and protect the
care quality means that we have started to use our people who were living at Whorlton Hall.
information and data to target inspections more
effectively when quality changes, and to take Realising our ambition
decisive enforcement action to protect people.
We have more to do to make sure we meet the
We are publishing our inspection reports more ambition of our 2016 to 2021 strategy to have a
quickly and this has improved substantially since more targeted, responsive and collaborative
approach to regulation, so more people get sharing with us and that we get clearer
high-quality care. information from people with as many different
experiences and backgrounds as we can, to
Most importantly, we are accountable to people
inform where we need to inspect. We have made
who use services and we act independently to
good progress and the new service will launch
make sure that people receive a good quality of
later in 2019/20.
care. We also have a clear obligation to providers
that fund most of our work through their fees – We want our people to feel more connected and
in 2018/19 the fees raised largely covered our better able to collaborate across teams and
costs on the activities for which we charge manage their workload. We have invested in new
providers. We want to make sure that we do all mobile capability, enhanced wifi and broadband,
we can to protect people from poor care and and integrated office IT solutions that will
encourage improvement, while offering value for support our people to do their jobs.
money, and being an efficient and effective
Our vision is for a fully inclusive organisation
regulator.
that values difference and is known as a great
In 2019/20 we will start to discuss, design and place to work. We are focused on improving
develop our regulatory approach, including how recruitment, retention and progression for all
we monitor, inspect and rate. This will enable us prospective and current CQC colleagues,
to achieve our strategic ambition for a more particularly for people from Black and Minority
targeted and responsive approach to regulation, Ethnic backgrounds, as well as increasing
make sure our regulatory approach is responsive learning and development opportunities.
to changes in the health and social care
As we increasingly look at health and social care
landscape, and support the development of our
delivery as part of a system, we need to be able
strategy for 2021 and beyond.
to adapt our approach as new types of care
Achieving greater productivity is at the heart of provision emerge and new technology is used.
our ambition and business plan. We know that
We will continue to build relationships with local
our internal systems and processes, and our
partners, including with integrated care systems.
public and provider tools need to improve. To do
Following a commitment from the Secretary of
this, we have started an important programme to
State for Health and Social Care, we aim to carry
improve our processes and technology, alongside
out more local system reviews that will help us
investing in the skills of our people.
to develop a more wide-reaching understanding
Our digital investment supports the redesign of a of how a person’s experience of care can be
range of digital tools and products over the next improved when services collaborate around
few years. Most significantly for 2019/20 is our their needs.
work to redesign our online registration service,
Our changes will not happen all at once – they
starting with community adult social care
will take place over several years and will be
providers. The new service will save time for
aligned to our financial plan. We will take an
providers and our people, and will increase our
iterative approach, releasing improvements and
ability to register new and more complex types of
testing new and redesigned services.
provider.

Equally important is our work to develop our
online service for people to share their
experiences of care. The new service will make
Peter Wyman CBE DL Ian Trenholm
sure that people have a better experience when
Chair Chief Executive
Performance summary
Our ambition, as set out in our 2016 to 2021 We have more to do to drive forward our work in
strategy, is for a more targeted, responsive and local areas to make sure we really understand
collaborative approach to regulation, so more how people experience care in different parts of
people get high-quality care. In 2018/19 we the health and care system, and to consider how
reached the mid-point of our strategy. innovative new models of care and technology-
enabled care can help.
We worked during the year to improve areas of
our performance, such as how quickly we publish ■■ We have continued to share our learning on
inspection reports. We also made good progress what drives improvement in providers through
towards meeting our four strategic priorities. our Driving improvement series and our other
However, we acknowledge that we have more themed publications, such as our report on
work to do to complete the delivery of our oral health in care homes, Smiling matters.
strategy, and to change and improve how we
■■ 74% of the services that we re-inspected, and
measure our performance. We want to make sure
were previously rated as inadequate, improved
that our performance is more closely linked to
(compared with 72% in 2017/18).
our impact on people who use services and to

PE RFORMANCE RE PORT
encouraging providers to improve. ■■ 71% of providers said that CQC encouraged
them to improve.
To do this, we started a period of change and
transformation led by our new Chief Executive. ■■ 84% of stakeholders told us that they have
We embarked on an important programme to used CQC inspection reports and 85% have
strengthen our digital capability and our used ratings to encourage improvement.
organisational systems and processes to make it
■■ Public organisations say that they value our
easier for us to do our jobs, easier for providers
approach to working in partnership with them
to work with us to do their jobs, and easier for
from the outset on projects such as thematic
the public to use what we know.
reviews and improvement reports.

Priority one: Encourage Priority two: Deliver

improvement, innovation an intelligence-driven
and sustainability in care approach to regulation
Our ambition is to work with others to support
Our ambition is to use information from the
improvement, adapt our approach as new care
public and providers more effectively to target
models develop, and publish new ratings of NHS
our resources where the risk to the quality of
trusts’ use of resources.
care is greatest and to check where quality is
We have made good progress towards this improving, and to introduce a more
priority. We have encouraged improvements at a proportionate approach to registration.
provider level and at a system level. And we are
increasingly using the full range of our
enforcement powers to protect people.
We set out challenging plans for this priority at
the start of 2018/19, to deliver enhanced
Priority three: Promote a
insight and information and to improve our data single shared view of quality
collection service for providers and the public. Our ambition is to work with others to agree a
We made some progress in these areas. For consistent approach to defining and measuring
example we started improving how we collect quality, collecting information from providers,
information digitally on people’s experiences of and delivering a single vision of high-quality
care, and we started to develop our new and care.
more flexible registration service.
We have made tangible progress under this
To fully realise our ambition to be intelligence- priority. The majority of stakeholders who
driven, we concluded during the year that we responded to our 2018 stakeholder survey
needed to invest in the people, skills and agreed that they share a single view of quality
technology to further strengthen our digital with us. And most providers that responded to
capability. This has meant that we spent some our 2019 provider survey agreed that CQC,
time reshaping our plans, projects and commissioners and other regulators have a
timescales, which has required a substantial shared definition of what good quality care looks
focus from colleagues right across CQC. like in their service. This is positive, and we want
We ended the year in a good position to drive to keep working to reduce the demands of
forward the work we need to do in 2019/20. regulation on providers, and to continue to
■■ 24,742 people shared their experiences of promote the single shared view of what good
care with us through our online form in looks like.
2018/19 (compared with 23,544 in 2017/18). We need to continue raising awareness of our
■■ 60% of members of the public who have reports and ratings to make sure that members
chosen a care home for themselves or another of the public understand the quality of health
person said that they were aware that and care services, and can use our reports and
concerns about care can be reported to CQC. ratings to help them choose between services if
they want to.
■■ 896 inspections were carried out as a direct
result of information that we received, for ■■ 90% of providers said that they use our five
example a safeguarding alert or information key questions when conducting quality control
about a change of registered manager. and assurance in their organisations.
■■ We issued 564 registration ‘notices of ■■ 70% of stakeholders agreed that they share a
proposal’ (most often proposals to refuse single view of quality with us.
registration), compared with 445 in 2017/18. ■■ 93% of members of the public who have seen,
We refuse registration to providers where the read or used a CQC inspection report said it
quality of care is not good enough. was easy to understand, and 75% have taken
some form of action after reading a report.
Priority four: Improve our ■■ 42% of CQC employees said that they do not
have the equipment or technology to carry
efficiency and effectiveness out their role (compared with 50% in 2017).
Our ambition is to work more efficiently, We have a substantial programme in place to
achieving savings each year, improving how we provide the right technology for our people.
work with the public and providers, and ■■ We made a £6 million contribution to the
supporting our people to do their jobs well. government’s Business Impact Target.
We have made progress under some areas of this ■■ Our employee engagement score is 61%.
priority, including substantial improvements in This is in line with public sector benchmarks.
the time within which we publish inspection
reports. However, we have more to do, and we
missed some important performance
commitments.
We managed within our resource budget for
2018/19 and delivered on our spending review
commitments. Our operating expenditure
(excluding non-cash items) was £227.7 million,
and our capital investment was £10.3 million.

PE RFORMANCE RE PORT
This included investment in our digital systems
to support our programme of change and
transformation to meet the ambition of our
strategy. It also included investment in our
people, skills and capabilities to make sure we
are in a strong position to be more efficient and
effective in 2019/20.
We continued our work to improve learning and
development opportunities, and to build a
working environment that is inclusive and
supports everyone to be the best they can be.
■■ 86% of inspection reports published on time
in 2018/19 (compared with 81% in 2017/18)
– this is a substantial improvement and
reflects a lot of concentrated work. We have
further to go to meet our target.
■■ 40% of CQC employees said that they can
access the right learning and development
opportunities when they need to (compared
with 38% in 2017/18). We are committed to
continuously improving in this area and we
have invested in further learning and
development opportunities for 2019/20.
How we used our money
Our total funding and expenditure for 2018/19 is shown in figure 1. The cost of our work that is
funded by fees continued to fall in line with the budget targets we agreed as part of the government
spending review.

Figure 1: What we received and what we spent

Revenue £4.3m £1.0m
grant-in-aid £6.1m
£7.4m
from the Reimbursement for services
Department and other income £1.5m
of Health and
Social Care
(DHSC)
£20.9m
£28.2m
£70.5m

Total Fee income

funding by sector
£234.0m £38.1m

Fee income
£204.3m
£56.0m

l Adult social care – residential l Dentists

l NHS trusts l Independent health care – community
l NHS GP practices l Independent health care – hospitals
l Adult social care – community l Independent health care – single speciality

Our operating expenditure (excluding non-cash items) of £227.7 million was allocated across the
following activities:

35 % 41%
10 %
3% 3% 8%
Registration Monitoring Inspection Enforcement Independent Other activity not
(not funded voice funded from fees
from fees) (such as thematic
reviews)

We also spent £10.3 million on capital investment, funded by grant-in-aid from DHSC.
Our total expenditure is split by operating segment. Find out more about our financial performance
in ‘Priority 4’ (page 39) and in the Statement of Comprehensive Net Expenditure (page 88).

Care Quality Commission Annual report and accounts 2018/19 1

Performance analysis
We monitor our progress against our strategic survey. Therefore there are no comparator results
priorities and we track our quality, efficiency, with 2017/18.
effectiveness and impact as a regulator. We do
this using a combination of key performance Provider survey 2019
indicators (KPIs) for delivery and performance, (published February 2019)
and strategic measures to help us understand
the effect we have on the quality of care for The survey was sent to a representative sample
people. of all providers registered with CQC. The
response rate was 9,100 (29%) and results were
We monitor our risks on a regular basis and weighted where appropriate to represent the
consider the link between each risk, our KPIs, composition of the total population of providers.
our strategic measures and our tolerance for Due to a change in the weighting approach in
uncertainty. We face a broad range of risks that 2019, yearly comparisons are not possible for
reflect our responsibilities as a regulator and we all questions.
carefully consider each risk when making
decisions (Risk management, page 45). Public awareness survey 2018

PE RFORMANCE RE PORT
We report the results of our performance to (published October 2018)
CQC’s Board, the public, our health and social The survey comprised interviews with 1,004
care system partners, our stakeholders, the members of the public.
Department of Health and Social Care (DHSC),
and Parliament to whom we are accountable. CQC inspection team survey 2018
(published November 2018)
Our survey data The survey was sent to all CQC inspection team
We administer a range of surveys to gather the members (including Experts by Experience and
views of stakeholders, providers, members of the specialist advisors). The response rate was 2,244
public, and our own people. We include some of (60%) and the results were weighted where
the survey results in this report to demonstrate appropriate to represent the composition of the
how we are doing against our strategic total population of inspection team members.
measures.
CQC people survey 2018
Stakeholder survey 2018 (published November 2018)
(published October 2018) The survey was sent to all CQC employees.
The survey was sent to local and national health The response rate was 2,608 (80%).
and social care partner organisations, including
commissioners, patient groups and advocates,
trade bodies, arms-length bodies and other
regulators. The response rate was 339 (39%) and
the results were weighted to represent the
composition of the total population of
stakeholders. This was our first stakeholder
Priority one
Encourage improvement,
innovation and
sustainability in care
Our ambition is to work with others to support improvement, adapt our approach as
new care models develop, and publish new ratings of NHS trusts’ use of resources.

74% improvement 71%

in services that we re-inspected,
and were previously rated as inadequate
of providers said that
compared with 72% in 2017/18 CQC ENCOURAGED THEM
TO IMPROVE

84% 85%
of stakeholders said they of stakeholders said they
have used CQC inspection reports have used ratings to
to encourage improvement encourage improvement
How are we doing?
We have made good progress towards this priority. We have encouraged improvements at
a provider level and at a system level. And we are increasingly using the full range of our
enforcement powers to protect people.
We have more to do to drive forward our work in local areas to make sure we really
understand how people experience care in different parts of the health and care system,
and to consider how innovative new models of care and technology-enabled care can help.

Performance some services that remain the same or decline

in their quality of care.
Encouraging improvement in In 2018/19, 53% of services previously rated
providers as requires improvement, improved on
re‑inspection, and 74% previously rated as
Providers have told us that we encourage them inadequate improved. Of those previously rated
to improve. In our 2019 provider survey, as good, 23% declined to a rating of requires
71% of providers felt that CQC had encouraged improvement or inadequate. This overall picture

PE RFORMANCE RE PORT
them to improve in the last 12 months. remains similar to 2017/18.
Our provider guidance, inspection reports and
inspection visits were mentioned as the most By sector, 52% of adult social care services rated
important for supporting this improvement. as requires improvement on their previous
inspection, improved to good. However, 21%
In our 2018 stakeholder survey, our stakeholders previously rated as good and re-inspected
told us that the information we provide is useful deteriorated to requires improvement and 3%
for encouraging improvement, particularly CQC deteriorated to inadequate.
ratings and reports. Eighty-four per cent said
they have used our inspection reports and 85% Most primary medical services rated as requires
said they have used our ratings. As well as improvement on their previous inspection
supporting service improvement, reports and improved their rating to good (74%). However,
ratings are commonly used to address 17% of those previously rated as good
organisational failure, commission services, or to deteriorated to a lower rating.
support regulation, monitoring and oversight. Five acute NHS trusts rated as inadequate on
Public organisations tell us that they value our their previous inspection, improved to requires
partnership working with them – including early improvement. However, 34 remained at requires
involvement in our projects and plans, data improvement. For independent hospitals, seven
sharing, working with them to understand previously rated as inadequate and re-inspected
people’s experiences to inform thematic reviews improved to either requires improvement or
and public support for their campaigns – and good.
that it supports their initiatives to drive We continued to encourage improvement
improvements to care services. through our range of inspections that look at
Our inspections show that services rated health and social care in other settings or for
inadequate or requires improvement tend to specific groups. For example, our joint
improve on re-inspection, although we do see inspections with Ofsted of how health works
with education and social care to meet the needs School has been commissioned to carry out
of children and young people with a disability; further research on CQC’s contribution to
our inspections of defence medical services; our improving care quality, specifically considering
inspections of healthcare services for looked how providers use our guidance and frameworks,
after children; and our inspections of health care and the relationships between CQC employees
in criminal justice and immigration detention and providers to improve consistency in
settings. approach and maximise our effect on the quality
of care.
Providers also told us that they use our national
reports; 66% of providers said they were aware
of our State of Care report, and 31% of those Encouraging improvement at a
providers who found it useful, took action after system level
reading it. The typical actions taken after reading
We are increasingly working with others in the
any of our national reports included revising
health and care system to understand how to
internal policies and guidance, raising awareness
encourage and enable improvements at a local
of equality and diversity, and improving staff
area level.
training. There is much more potential to
promote these reports as a best practice Our 23 local system reviews and our national
resource, and to raise awareness of their effect report,Beyond barriers , gave us a clear
on quality of care. We continued to publish understanding of how local services can work
reports specifically targeted towards sharing together to improve care. Three quarters of
best practice and improving, for example: stakeholders who have used our local system
review reports say that they are useful for
■ Quality improvement in hospital trusts coordinating care. We highlighted our findings
■ Radiology review again in our 2017/18State of Care report to
Parliament, emphasising the importance of system-
■ Opening the door to change: NHS safety level collaboration and person-centred care.
culture and the need for transformation
In March 2019 we published our second update
■ Medicines in health and social care to our local authority area data profiles . These
■ Driving improvement: Case studies from eight profiles cover key data and information for each
independent hospitals local authority area and allow system leaders
to look at key quality indicators at a glance.
■ Smiling matters: Oral health in care homes The profiles will be updated on a regular basis.
In September 2018 we saw the conclusion of
We published our interim findings from ourreview
research commissioned by DHSC and carried out
of restraint, prolonged seclusion and segregation
jointly by The King’s Fund and the Alliance
for people with a mental health problem, a learning
Manchester Business School, which explored the
disability or autism. We visited people who had
effect of CQC’s approach to inspection and
been in contact with health, care and education
rating. The report identified examples of eight
services for many years and who had been failed by
types of impact that CQC’s regulation can have
the system. In our interim report we called for
on providers, extending beyond inspection and
urgent action to strengthen the safeguards that
rating. The report identified some areas for
protect the safety, welfare and human rights of
improvement in our approach, and
people held in segregation. Our final report and
acknowledged that these are being addressed
recommendations will publish in Spring 2020.
through the implementation of our 2016 to
2021 strategy. The Alliance Manchester Business
Encouraging innovation We monitor the financial sustainability of
potentially hard-to-replace adult social care
CQC has been awarded a grant from the providers and notify local authorities (commonly
Department for Business Energy and Industrial referred to as a ‘stage 6’ notification) if there is
Strategy’s Regulators’ Pioneer Fund to explore likely to be any disruption to the continuity of
how we can work with providers to encourage care as a result of likely business failure. As at
good models of technological innovation. 31 March 2019 there were 58 providers in this
We have started to look at whether we develop a market oversight scheme. We issued two
service that would allow providers or innovators notifications in 2018. These were the first
to test out innovative products or services. notifications to be made since this responsibility
We are also developing other changes to our came into force in 2015.
regulatory approach to enable inspection teams
to identify, assess and encourage good
technological innovation.
Using our enforcement powers
While the majority (74%) of people in our 2018
We are working with DHSC and other regulators
public awareness survey told us that they trust
to set out a clear regulatory pathway across the
CQC is on the side of people who use services
lifecycle of artificial intelligence products that
(strategic measure, Priority three), we have more
support innovation while keeping people safe.
to do to reassure the public about the work that
We now rate all online primary care providers we do, with 60% agreeing in the survey that

PE RFORMANCE RE PORT
and we have published inspection prompts to CQC can effectively monitor, inspect and
look at apps for triaging patients. regulate the services that they use.
To take decisive action to protect people, we
Encouraging sustainability have continued to strengthen our approach to
In October 2017 we started working with NHS enforcement and increased the use of our civil
Improvement to assess NHS trusts’ use of and criminal powers. We issued 2,206
resources (such as finances, people, estates, enforcement actions in 2018/19, compared with
facilities and procurement). Between January 2,283 in 2017/18 (figure 2). Of these, 1,213
2018 and March 2019, use of resources ratings (55%) are pending outcome which means they
for 65 trusts were published alongside their are underway but not yet published. The
quality rating. It is too early to track majority were civil actions or Warning Notices.
improvement; however we are starting to hear We took more criminal actions than in 2017/18,
feedback that some stakeholders are using the a continuing trend over the last two years. Our
ratings and reports, and that some trusts find case management tracking system is helping to
them helpful for identifying priorities for action. strengthen our criminal action work.

We have embedded our regular inspections of

leadership, management and culture at NHS
trusts, a core part of ensuring sustainable
performance and quality of care. In 2018/19 we
carried out 139 inspections to look specifically
at their performance under the well-led key
question at trust-wide level.
Figure 2: Enforcement actions issued 2018/19 and 2017/18
1,600

1,400 1,343

1,200 1,089
1,000 906
781
800

600

400
211
159
200

0
Warning Notices Civil Criminal

2017/18 2018/19

Enforcement leading to positive change

We rated a care home as inadequate in October 2017 after finding the provider to be in breach of
three different regulations, including for providing safe care and treatment.
Our inspection team had a number of serious concerns, including:
■■ incorrect storage and logging of controlled drugs
■■ inadequate fire safety checking and testing
■■ inadequate systems in place to manage the risk of falls from windows
■■ poor governance and oversight from the provider and the registered manager.
We were very concerned for the health and safety of the residents and issued Warning Notices.
After finding these had not been addressed we imposed urgent conditions on the provider’s
registration.
After the inspection we supported the provider to improve and they showed how they would do
this by developing an action plan. Prompted by the enforcement action, the situation at the
home changed very quickly and they met the conditions of registration. We returned to the home
to check on progress and rated it as requires improvement in May 2018. By April 2019 the home
had turned around its approach to risk, health and safety and we were able to rate it as good.
Strategic measures
Strategic measure Result

Encouraging improvement

Providers tell us our relationships, 71% of providers in our 2019 provider survey agreed that CQC
guidance, registration, inspection, and encouraged them to improve in the last 12 months.
reports help them to improve.
When asked what factors helped their service to improve,
respondents could select from a range of options. The highlights
were:
■■ CQC’s guidance (44% agreed it helped).
■■ Taking action in anticipation of inspection (31% agreed it
helped), and the inspection visit (42% agreed it helped).
■■ Reports (40% agreed they helped) and ratings (35% agreed they
helped).
■■ Of those registered in the last year, 13% said taking action in
preparation for registration helped and 22% said going through
the registration process helped.

PE RFORMANCE RE PORT
The number of services that are rated 74% of services that we re-inspected, and were previously rated as
as inadequate or requires improvement inadequate, improved. This was 72% in 2017/18.
that improve on re-inspection.
53% of services that we re-inspected, and were previously rated as
requires improvement, improved. This was 51% in 2017/18.

Our partners tell us that we work with 55% of stakeholder organisations in our 2018 stakeholder survey
them effectively and that our said that they have an effective working relationship with CQC, but
information is useful in supporting there is much variation across stakeholder types, with trade
improvements to services. associations and local authorities being more positive.
84% of stakeholders said that they have used CQC inspection
reports and 85% have used ratings to encourage improvement.

Stakeholders tell us that they have a 67% of stakeholders said that CQC’s inspection reports are useful
better understanding of how well care for supporting organisations to coordinate care across organisational
is coordinated across organisations or service boundaries, and 75% said that local system review reports
because of CQC information. are useful for this.

We regularly assess and report on We started to publish regular updates to our local authority area
differences in quality for different data profiles that look at the care pathways for people aged 65
population groups and geographical and over.
areas.
Strategic measure Result

Encouraging sustainability

NHS trusts tell us that the assessment Of the 22 NHS trusts that had undergone a use of resources
of use of resources helps them assessment and responded to the provider survey, five said that it
improve. encouraged them to improve. Eight said that it helped them to
identify priorities for action.
Note: New measure so not comparable with 2017/18.

System partners use the assessment of 52% of stakeholders said that they have used a use of resources
NHS trusts’ use of resources to provide rating, and 49% that they have used a use of resources report.
trusts with the support that they need.

Using our enforcement powers

We use the full range of our We issued 2,206 enforcement actions in 2018/19. These comprised:
enforcement powers to protect people 1,089 Warning Notices, 906 civil actions and 211 criminal actions
and to hold those responsible to (which includes fixed penalty notices, prosecutions and simple
account. We use the appropriate cautions). Of these, 1,213 (55%) are pending outcome which means
enforcement tool to bring about they are underway but not yet published.
improvement.
This compares with 2,283 total actions in 2017/18 (1,343 Warning
Notices, 781 civil actions and 159 criminal actions).

The public tell us that they trust us to 72% of members of the public in our 2018 public awareness survey
identify good and poor quality care said that they feel reassured that the services they use are regulated
and to take action to protect them. by CQC. This was 75% in 2017/18.
60% of the public said that they are confident that CQC can
effectively monitor, inspect and regulate services. This was 64% in
2017/18.

We effectively inform and work with 72% of local stakeholders said that CQC informed them when we
local organisations when we close decided to close a service in their area, and 63% said that we
services and this leads to continuity in worked with them to minimise any disruption to people who use
access for people. services.
Encouraging improvement in local health and care systems

We carried out a series of reviews of local health and care systems to look at how older people
experience care. Our reviews helped to encourage improvement in care. One example of this is
the Stoke-on-Trent health and care system.
Our first review of Stoke took place in September 2018 and it was clear that some older people in
Stoke were not experiencing good care. The organisations responsible for the services in the area
were not working together towards a shared vision, and there was a lack of strategic planning
and collaboration. Some people were not getting GP appointments in a timely way; and older
people were waiting for too long in A&E before being admitted to a ward, and then experiencing
delays as they waited to leave hospital.
In response to our findings, system leaders developed an action plan that required organisations,
including Staffordshire Clinical Commissioning Group and the council, to come together urgently
to improve services for older people. CQC emphasised the need to develop better ways of
working together to reduce the need for acute hospital care.
We returned to Stoke in November 2018 and found that significant improvement had been made.

PE RFORMANCE RE PORT
Relationships and joint working towards shared goals had improved, and a collaborative approach
was emerging across the system. Leaders had shown a real drive to effect change and support
improvement. Frontline staff described the change in culture that enabled them to work better
together.
There were tangible improvements in the quality of care. At the first review, 16% of nursing
homes, 2% of residential care homes and 3% of domiciliary care agencies were rated as
inadequate. By September 2018, there were no services rated as inadequate, and nursing homes
rated as good had increased from 26% to 42%. There had also been significant improvement in
the local hospitals that meant more people were seen in the right place at the right time and the
number of people whose discharge from hospital was delayed had also reduced.
Read the Stoke-on-Trent local system review on our website.
Priority two
Deliver an intelligence-
driven approach to
regulation
Our ambition is to use information from the public and providers more effectively
to target our resources where the risk to the quality of care is greatest and to
check where quality is improving, and to introduce a more proportionate approach
to registration.

24,742people 60%
of people who have
chosen a care home for
themselves or another
said they were aware
shared their experiences of care that concerns
with us through our online form in 2018/19 about care can be
(compared with 23,544 in 2017/18) reported to CQC

as a result
of information
896
inspections
564
registration ‘notices
we received were carried of proposal’ (most
out often proposals to refuse
registration), compared
with 445 in 2017/18
How are we doing?
We set out challenging plans for this priority at the start of 2018/19, to deliver enhanced
insight and information and to improve our data collection service for providers and the
public. We made some progress in these areas. For example we started improving how we
collect information digitally on people’s experiences of care, and started to develop our
new and more flexible registration service.
To fully realise our ambition to be intelligence-driven, we concluded during the year that
we needed to invest in the people, skills and technology to further strengthen our digital
capability. This has meant that we spent some time reshaping our plans, projects and
timescales, which has required a substantial focus from colleagues right across CQC.
We ended the year in a good position to drive forward the work we need to do in 2019/20.

Figure 3: Ratings profile as at 31 March 2019

1% (86)
3% (792) 1% (264) 5% (327) 4% (264)
15% (3,485)

PE RFORMANCE RE PORT
Adult Social Care Primary Medical
directorate Services
directorate

80% (18,159) 90% (6,196)

8% (69) 2% (19)

24% (215)

Inadequate
Requires improvement
Good
Hospitals
directorate Outstanding

66% (599)
Performance Public awareness and sharing
experiences of care
Targeted regulation Overall public awareness of CQC remained
We have made good progress in developing stable during the year and compares similarly
new tools and systems to help us collect, analyse with 2017. The majority of members of the
and share data and information from the public, public agreed in our survey that they are aware
providers, stakeholders and a range of other that there is a regulator of health and social care
sources. This has been an important focus and understand the standards of care they can
during the year and is fundamental to expect. We have also seen a positive change in
developing our approach to monitoring care and people recognising CQC’s name without being
being intelligence-driven. prompted, rising from 18% in the 2017 survey to
25% in 2018.
Our ratings profile at 31 March 2019 showed
that most services that we have rated are Members of the public who have recently chosen
providing high-quality care to people (figure 3). a care home tend to be more aware than others
We saw slight improvement in the quality of that their experiences of care can be reported to
care across all sectors and ratings compared CQC; 60% of public said they were aware they
with 2017/18. This robust baseline of data has could do this, similar to 2017. This may be linked
given us a platform from which to be to our #CareAware campaign that was designed to
intelligence-driven. increase understanding of the choices available to
people when selecting a care service. For the
Overall, across the year 896 inspections were wider population, 41% of people said they were
carried out as a direct result of information that aware they could share their experiences, which is
we received from, for example, a person using slightly lower than 2017.
the service, a family member or a member of
staff, or because of additional intelligence we We continue to see year-on-year increases in the
heard about after inspecting. The information number of people who report experiences of
could be a safeguarding alert, information about care to us through our online ‘Share your
a change of registered manager, or other Experience’ service. This information then
concerns. informs our regulation of services. Information
from individuals about their experiences of care
CQC Insight also reaches CQC through other routes, including
our national customer service centre (NCSC)
We have now developed CQC Insight tools for all and data gathered from comments left on third
sectors. Each tool contains data and information party websites.
from a range of sources and feeds to one
integrated hub. From there, CQC colleagues can We have a real opportunity to improve the
extract and use the information to assess levels experience of people who share information
of risk and changes to quality on a continuous about their care with us through the promotion
basis. There is work underway to keep improving of our redesigned online Share your Experience
the effectiveness of our insight tools, for service. In 2018/19 we invested significant work
example adding additional indicators, improving in the service to make it more intuitive to use
navigation, enhancing contextual information, and improve the quality of information it
adding more qualitative information, and collects. The new online service will help people
showing change over time. who use it to give us information that can be
acted on, where appropriate, at the right level of
detail. We will launch and promote the new
service later in 2019/20 after a period of us to make it easier for them to do their jobs.
further testing. We spent part of the year continuing to develop
our adult social care provider information return
In addition to our ‘Tell us about your care’
which aimed to achieve this for that sector.
partnerships with voluntary organisations, our
However, we took an important decision during
local engagement and information sharing with
the year to pause this work and to rethink our
organisations such as local Healthwatch, and our
approach. This is because we want to make sure
engagement with specific communities on topics
that our digital tools work well as part of our
as part of thematic reviews, we also speak to
entire programme of monitoring care, and more
people who use services on or before our
development and scoping work is needed for
inspections to get a fuller understanding of how
all sectors.
care is experienced by those using it and to
inform our judgements and ratings. Our Experts
by Experience (people with a lived experience of Responding to risk
health and care services) are frequently part of Inspections and monitoring visits
our inspection teams and our 2018 inspection
team survey results showed that inspectors find We are now inspecting and rating providers at
their contribution valuable (strategic measure, agreed frequencies based on their rating and the
Priority four). The survey also showed that level of risk. In 2018/19 we carried out more
Experts by Experience feel positive about how than 17,000 inspections across all sectors – this

PE RFORMANCE RE PORT
we use the views of people who use services in included first inspections, re-inspections and
our judgements and ratings. focused inspections (where we return and look
at one aspect of a service).
Provider information tools In the primary medical services sector we carried
We want providers in all sectors to have simple out 3,903 inspections and of these, 89% were
and effective ways to share information with within our agreed re-inspection timescales
against a target of 90%.

Insight from Experts by Experience

One of the ways our inspectors gather evidence is to work with members of the public with a
recent experience of care – known as Experts by Experience.
Experts by Experience talk to people during an inspection to gather their views. Their recent
experiences of care enable them to gather unique insight into a service. They ask people about their
experiences, both good and bad, and these comments are then fed back to the inspection team.
In May 2018 we inspected a nursing home that was rated as good. An Expert by Experience was
part of the inspection team. She built trust and had a good rapport with people in the home,
which allowed her to gather meaningful information.
While lunch was being served she saw five different staff members proactively helping people to
enjoy their lunch. She fed this back to the inspection team and it was one of the pieces of
evidence that supported the continued rating of the home as good.
In the adult social care sector we carried out Safeguarding
12,227 inspections and of these, 62% were
We quickly inform local authorities of the most
within our agreed re-inspection timescales
urgent and serious information of concern that
against a target of 90%. We prioritise returning
we receive (known as ‘safeguarding alerts’).
to services with a lower rating, for example we
In 2018/19 our performance remained good at
were close to meeting our target of returning to
94%, although not quite reaching our target of
90% of inadequate locations within six months
95% of referrals within one day. We have
with 86% re-inspected. In quarter four, we made
strengthened our safeguarding alerts process
a substantial effort to drive up performance and
and risk management system to make sure that
by April 2019, inspection teams were meeting
our decision-making is informed effectively
the timescale targets for locations rated as
(Governance statement, page 61). We need to
inadequate, requires improvement and good.
improve how quickly we take our mandatory
Maintaining this improved performance in the
actions for ‘safeguarding concerns’ (where we
Adult Social Care directorate is a priority for
need to find out more information before we
2019/20 and works in tandem with
take a decision).
improvements to our data collection and
analysis systems.
Whistleblowing enquiries
In the hospitals sector we carried out 861
inspections overall – 222 of these were NHS Some of the information we receive is shared
inspections and 639 were independent health with us by people who work (or who have
inspections. worked) for health and care organisations that
are registered with us, or who provide services
As part of our inspections of NHS hospitals we to those organisations (such as agencies). It is
inspected 1,088 NHS core services (these are important that people who work at health and
services such as maternity care or urgent and care organisations feel they can speak to us
emergency care). Of those that involved a about any issues that cause them concern and
re-inspection, 99% of core services were that our response will be prompt and
re‑inspected within target timescales. appropriate. We describe the concerns we
We met our commitment to inspect 10% of all receive from them as ‘whistleblowing enquiries’.
active dental locations and carried out a total In 2018/19 we received 8,878 enquiries. This
of 1,228 inspections. was an increase from 2017/18 when we received
We continued to keep the Mental Health Act 8,449 enquiries. The majority of the enquiries
(MHA) under review. The number of visits has (85%) were about adult social care services,
increased since 2017/18, and we have spoken 12% were about hospitals, and the remainder
to more people than ever before. We also made were about primary medical services.
sure that people detained under the MHA When we receive an enquiry we consider the
who lack the capacity to consent or who have information carefully and prioritise which action
refused treatment, have their treatments to take according to the level of risk (figure 4).
reviewed by an independent professional. The most serious enquiries, for example where
Second Opinion Appointed Doctor (SOAD) there is a risk of harm to an individual, will
visits performance remained stable, but we trigger a safeguarding process that may include
did not meet our target for visits within agreed a referral, such as to the local authority. Other
timescales. We are increasing our capacity actions include bringing forward inspections and
in 2019/20 to respond to the demand for conducting responsive inspections. There are
SOAD visits. some enquiries that remain completely
Figure 4: Whistleblowing volume and action taken
1,200 60%

1,000 48% 48% 48%

46%
45%
50%
43% 43% 43% 44%
42% 41%
38%
800 40%

600 507 525 567 30%

537
519 549
568 517 605
542
400 369 571 20%
12 15 19
15 24 15 13 14 10 12
200 46 55 10 28 20 8 10%
42 41 28 19 33 31
187 150 172 20 182 209 16
148 142 165 168 171 128 134
0 2% 2% 2% 2% 1%
3% 2% 2% 2% 2% 2% 2% 0%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Other (such as information used to support future inspections)
Triggered a responsive inspection
Brought forward a planned inspection

PE RFORMANCE RE PORT
Referred to a more appropriate organisation (such as a local authority)
% where a safeguarding record has been set up (safeguarding issue identified)
% where a management review record has been set up (could result in enforcement)

anonymous and in these instances we may not adult social care providers and then expanding
be able to progress an action due to lack of to include residential social care and dentists.
information. The new service will be easier to use and save
time for providers. It will provide useful and
Transforming registration relevant information for CQC colleagues as they
prepare for inspections.
Registration needs to evolve to reflect changes
in the health and social care sector, including Our registration performance against agreed
new models of care and types of providers, timescales remains stable. However, we are not
such as online providers and integrated care. yet meeting the targets we have set ourselves
A priority for our intelligence-driven approach and more improvement work is being undertaken
is to transform our registration service. We are to achieve this. Our performance should be
reshaping the service to be more responsive, considered in the context of increased demand,
flexible, and useful for providers and CQC particularly around refusing registration to
colleagues. Feedback from our 2018 inspection providers where the quality of care is not good
team survey has shown that the information enough. We issued 564 ‘notices of proposal’
provided at registration is useful, but that it (which are most often our proposals to refuse
needs to feed into the intelligence we already registration), compared with 445 in 2017/18.
gather to provide more tailored support. In addition to our registration change
programme, we will make continuous
We continued our work to reshape the service improvements to our existing registration
during the year. This will continue to be a major processes during 2019/20 to make them easier
focus in 2019/20 as we start developing and for providers and colleagues.
testing the service, starting with community
 Responding to concerns at a care home

In November 2018 we brought forward an inspection of a care home in response to concerns

raised by healthcare professionals, the local authority safeguarding team, relatives and
whistleblowers. The local authority placed an embargo on admissions to the home.
We found that the home was breaching the regulations and there were various examples of poor
and unsafe care, such as:
■■ the registered manager failed to report a safeguarding concern to the local authority and to CQC
■■ the principles of the Mental Capacity Act were not being followed
■■ the systems for monitoring care quality and safety were not working effectively
■■ risk assessments did not always reflect people’s care and support needs and advice from
healthcare professionals was not always followed by staff
■■ a medicines audit indicated that there were no gaps in people’s medicines administration
records, but we found an instance where a person’s medicine had not been signed by staff as
given to them.
We rated the service as inadequate and it was placed in special measures.
During our inspection the provider’s regional manager told us that the home would not be
admitting any private placements for a minimum of two months and that they had introduced a
team of senior managers to support and oversee the improvements that needed to be made.

We have developed our website to make it easier Data science

to see the regulatory history of a service when
there has been a change in registration. It will We continued to explore the opportunities that
now be possible to see old and new ratings side data science, such as machine learning and
by side if a provider has to re‑register because automated analysis, can offer CQC to better
of, for example, a change in registered manager. understand changes to the quality of care and
This means providers will not lose any existing to support our regulation.
ratings for their locations, and it is clearer for
members of the public.
In 2019/20 we will review our Registering the
right support guidance for providers supporting
people with a learning disability or autism.
We want to ensure the guidelines are flexible to
a range of different provider and location types.
Strategic measures
Strategic measure Result

Quality ratings

The range of ratings across all our The ratings profiles continued to improve slightly from 2017/18.
rating categories (outstanding, good, As at 31 March 2019, most providers across all sectors were rated as
requires improvement and good. There remain a minority of providers rated as inadequate.
inadequate).

Public awareness and sharing experiences of care

People are aware of CQC and our role. 71% of the public said that they are aware that there is a national
body responsible for regulating health and care. This remains the
same as 2017.
25% of the public were able to name CQC as the national body for
regulating health and care. This has risen from 18% in 2017.

People tell us that they trust CQC is on 74% of the public said that they trust that CQC is on the side of
the side of people who use services. people who use services. This compares with 77% in 2017. Of those
who had seen a CQC report, this trust rose to 84% which is the same
as 2017.

PE RFORMANCE RE PORT
The public tell us that our online 41% of respondents to our 2018 public awareness survey were aware
mechanisms for them to tell us about that concerns about care could be reported to CQC. This compares
the care they receive are easy and with 47% in 2017. Those who have chosen a care home for
straightforward. themselves or someone important to them are most likely to be
aware (60% in 2018 and 2017).

We use information from the public to We received 24,742 experiences of care from people through our
inform our judgements, ratings and Share your Experience service, compared with 23,544 in 2017/18.
the action we take.
73% of Experts by Experience who responded to our inspection
team survey in 2018 thought that the views of people who use
services and the public are given sufficient weight in CQC
judgements and ratings. This was the same as 2017.

Transforming registration

Inspectors tell us that they have the 17% of respondents to our 2018 inspection team survey said that
information they need from they used registration information when planning. This compares
registration to adequately plan an with 38% in 2017. Of those who used the information, 68% found it
inspection at a location that has newly useful compared with 55% in 2017.
registered or changed their
registration.
Key performance indicators
KPI Result Met target

Inspecting and reviewing

The frequency of our We set ourselves commitments to re-inspect locations and to

inspections is in line with inspect newly registered locations within specified time periods.
ratings and new NHS hospital re-inspections were above their target, primary
registration timescales. medical services re-inspections were close to the target, and
some improvement is needed in adult social care re-inspections:

There were 12,227 adult social care inspections, of which Not met
▼ 62% were carried out within agreed timescales, against
our target of 90%. Performance in 2017/18 was 81%.

There were 3,903 primary medical services inspections, Not met

▼ of which 89% were carried out within agreed timescales,
against our target of 90%. Performance in 2017/18 was
96%.

Of the NHS hospital core services that needed a Met

re‑inspection, 99% were re-inspected within agreed
timescales against our target of 90%.
Note: NHS hospitals core service re-inspections is a new
KPI so not comparable with 2017/18.

Dental inspections carried We carried out 1,228 dental inspections and met our Met
out.
▲ target to inspect 10% of all active locations.

MHA Reviewer visits There were 1,203 MHA monitoring visits. This increased Not
planned and completed from 1,133 visits in 2017/18. reportable*
against a target of 90%.
*During 2018/19 we started a transition from our MHA
database to a new system which means we cannot report
on performance in this report.

Second Opinion Appointed There were 3,615 SOAD visits, of which 88% were in Not met
Doctor (SOAD) visits agreed timescales against a target of 95%. Performance
carried out within target was 90% at the end of the year. This remains the same as
timescale. 2017/18.

Protecting people

Safeguarding alerts referred Our performance was 94% of alerts against a target of Not met
to a local authority within 0
▼ 95%. Performance in 2017/18 was 96%.
to 1 days.

Safeguarding alerts and Our performance was 89% of alerts and concerns against Not met
concerns had one of four
▼ a target of 95%. Performance in 2017/18 was 90%.
possible mandatory actions
taken in 0 to 5 days.
KPI Result Met target

Registration

Registration processes 70% of new registration applications were completed Not met
completed within 50 days.
▼ within 50 days against a target of 80%. Performance in
2017/18 was 77%.

86% of variations to registration completed within 50 Not met

▼ days against a target of 90%. Performance in 2017/18
was 87%.

93% of registration cancellations completed within 50 Met

▲ days against a target of 90%. Performance in 2017/18
was 91%.

PE RFORMANCE RE PORT
Priority three
Promote a single shared
view of quality

Our ambition is to work with others to agree a consistent approach to defining and
measuring quality, collecting information from providers, and delivering a single
vision of high-quality care.

90% 70%
l Safe
l Effective
l Caring of providers
l Responsive said they use our
l Well-led five key questions
when conducting of stakeholders agreed that
quality control they share a single view
and assurance of quality with CQC

93% 75%
of members of the public who have have taken some
seen, read or used a CQC inspection report form of action
said it was easy to understand, and after reading a report
How are we doing?
We have made tangible progress under this priority. The majority of stakeholders who
responded to our 2018 stakeholder survey agreed that they share a single view of quality
with us. And most providers that responded to our 2019 provider survey agreed that CQC,
commissioners and other regulators have a shared definition of what good quality care
looks like in their service. This is positive and we want to keep working to reduce the
demands of regulation on providers, and to continue to promote the single shared view
of what good looks like.
We need to continue raising awareness of our reports and ratings to make sure that
members of the public understand the quality of health and care services, and can use
our reports and ratings to help them choose between services if they want to.

Performance Developing a shared view of

quality
Information for the public
The majority of providers agreed that CQC,
Seventeen per cent of members of the public commissioners and other regulators have a
said that they have seen, read or used a CQC

PE RFORMANCE RE PORT
shared definition of what good quality care
inspection report, and 44% said that they are looks like in their service. The majority also
aware of CQC’s ratings. This use and agreed that our guidance and standards focus
understanding of reports and awareness of on what matters most to them. Many also said
ratings has reduced slightly from 2017. that they have adopted our framework for
However, we know that when people see our quality and have embedded our five key
information they are much more likely to have a questions in their governance, particularly
positive experience: 93% of those who have read around conducting quality control, assurance
an inspection report said that they found it easy and clinical governance.
to understand, and 75% have taken some form Most stakeholders agreed that a shared view
of action. Also, those who have seen an of quality exists between themselves and CQC.
inspection report tend to have higher levels of Around three-quarters said they are familiar with
trust that we are on the side of people who use either the National Quality Board (NQB) or
services – 84% who have read a report said that Quality Matters documents that define a shared
they trust us, compared with 74% who have not. view of quality. Most agreed that the national
We have more to do to continue building trust definition captures the most important
and understanding and making sure that our dimensions of quality.
reports and ratings are relevant to people’s lives. Twenty-four per cent of stakeholders agreed
Our public campaigns for 2019/20 and our that this definition reduces duplicate information
planned online and digital service developments requests. More therefore needs to be done to
will help to build further awareness. fully embed the national definition of quality to
make sure that it achieves its aim of reducing
the demands of regulation on providers and
better influencing commissioning decisions.
We need to work ever more closely with system
partners and commissioners to make sure that
we use the same categorisation and measure of Care and other regulators to further align our
what good looks like to make sure this is clear to view of quality and to make sure that the
providers, and to make it as easy as possible to national definition remains relevant to changes
gather the views of people who use services. in the external environment, such as service
integration and the NHS Long Term Plan.
We will continue to work together with DHSC,
NHS England and NHS Improvement, Skills for

Strategic measures
Strategic measure Result

Public expectations of care and of CQC

The public are increasingly clear about 60% of members of the public said in our 2018 public awareness
what they can expect from care survey they are aware of the standard of care they are entitled to
services through the information receive from health and social care services. This compares with 61%
provided by CQC, providers and in 2017.
others.

People tell us that they trust CQC is on 74% of the public said that they trust that CQC is on the side of
the side of people who use services. people who use services. This compares with 77% in 2017. Of those
that had seen a CQC report, this trust rose to 84% which is the same
as 2017.

The public uses our information, 17% of the public said that they had seen, read or used one of our
including our reports and ratings. reports. This compares with 22% in 2017.
44% of the public said that they are aware of CQC’s ratings
compared with 50% in 2017.
75% of the public who have read our reports, and 49% of those who
have seen CQC ratings, said that they take some form of action
(such as deciding to continue using the service, or looking for more
information) as a result.

The public say our information is 93% of the public who have read a CQC report said it was easy to
useful and easy to use and understand, compared with 94% in 2017.
understand.
84% of the public who had seen CQC ratings for a service said they
are easy to understand, compared with 85% in 2017.

A shared view of quality: Providers

Providers agree that CQC, 67% of providers in our 2019 provider survey said that CQC,
commissioners and other regulators commissioners and other regulators have a shared definition of what
are working together to a single good quality care looks like in their service.
shared view of quality.

Providers feel that the reporting 57% of providers said that completing CQC’s provider information
requirements to oversight bodies are return is demanding, compared with 54% in 2018.
reducing.
61% of providers agreed that CQC works well with other partners in
the health and social care system to coordinate their work, compared
with 55% in 2018.
Strategic measure Result

Providers say that what we focus on is 71% of providers agreed that CQC focuses on what matters most,
what matters most to them (including compared with 67% in 2018.
guidance and standards).
79% of providers said that CQC’s guidance and standards focus on
what matters, compared with 76% in 2018.

Providers use CQC’s approach in their 90% of providers said that they use our five key questions when
governance and communication. conducting quality control and assurance, 86% when communicating
their policies, and 86% when assessing clinical governance.

A shared view of quality: Our partners and stakeholders

Our key strategic partners agree that 70% of stakeholders in our 2018 stakeholder survey agreed that
we share a single view of quality. they share a view of quality with CQC.
74% of stakeholders said they were familiar with either the NQB or
Quality Matters documents defining a shared view of quality.
86% of stakeholders agreed that the shared definition captures the
most important dimensions of quality.
24% of stakeholders agreed that the definition reduces duplicate
information requests.

PE RFORMANCE RE PORT
Sharing information with our partners and stakeholders

We continued working with our partners and stakeholders to share information and to strengthen
information-sharing agreements. This has helped us to have a better understanding of the
information we collectively hold about providers, local systems, and people’s experiences of care.
For example, with NHS England and NHS Improvement, we considered four areas that will help
us to collaborate better.
■■ How we engage with the new NHS seven regions structure
■■ Our ongoing commitment to use of resources reviews and our inspections of the well-led key
question
■■ Opportunities to align and reduce the regulatory demands on providers
■■ Updates to working agreements in the context of large-scale organisational change.
We also agreed with the NQB (which is a partnership of NHS England and NHS Improvement,
Public Health England, ourselves and others) to review and update the framework for our shared
commitment by the end of 2019/20, to support local areas to deliver the NHS Long Term Plan.
With NHS England and NHS Clinical Commissioners, we continued to work together through our
joint framework and as part of the Regulation of General Practice Programme Board to reduce
duplication of regulation in general practice.
We collaborated closely with Healthwatch England and improved our information-sharing mechanisms.
Priority four
Improve our efficiency
and effectiveness

Our ambition is to work more efficiently, achieving our planned savings each year,
improving how we work with the public and providers, and supporting our people
to do their jobs well.

86%
of inspection reports
42%
of CQC employees said
published on time that they do not have
in 2018/19 the equipment or
technology to carry
out their role

£6 million
contribution to the
Our employee
engagement score is 61%
government’s
Business Impact Target
How are we doing?
We have made progress under some areas of this priority, including substantial
improvements in the time within which we publish inspection reports. However, we have
more to do, and we missed some important performance commitments.
We managed within our resource budget for 2018/19 and delivered on our spending review
commitments. Our operating expenditure (excluding non-cash items) was £227.7 million
and our capital investment was £10.3 million. This included investment in our digital
systems to support our programme of change and transformation to meet the ambition of
our strategy. It also included investment in our people, skills and capabilities to make sure
we are in a strong position to be more efficient and effective in 2019/20.
We continued our work to improve learning and development opportunities, and to build a
working environment that is inclusive and supports everyone to be the best they can be.

Performance ■■ rolled out new smartphone devices and

lightweight laptops for home-based
Our people colleagues and those that are regularly on

PE RFORMANCE RE PORT
the move
Our 2018 people survey results showed that most
employees (92%) believe that CQC makes a ■■ started work to improve meeting room
positive difference to people’s lives. The majority technology, upgrade office wifi and roll out
also agreed that CQC colleagues display the Office 365 to enable more collaborative and
values and behaviours of the organisation. In effective working.
addition, most people said that they understand
Learning and development survey scores
CQC’s strategic direction, although this is lower
improved from 2017, but there remains more to
than in 2017. We will focus in 2019/20 on
do to make sure that colleagues have access to
improving strategic change communications for
the right training and feel able to develop and
colleagues.
progress. We started the following initiatives in
The survey showed that colleagues remain 2018/19 and we will continue these throughout
frustrated with CQC’s digital tools and systems; 2019/20. We have:
42% said that that they do not have the ■■ launched a major programme to develop
equipment and tools to carry out their roles.
capability to carried out quality improvement
Improving the tools, systems and processes for
programmes
colleagues has been an immediate priority for
our digital investment. We have made progress ■■ worked with an external partner to develop
to address this and will continue further and deliver a nationally recognised
improvements to our IT systems in 2019/20. qualification programme for our inspectors to
We have: build expertise in regulation and enforcement
■■ made good progress in improving broadband ■■ delivered a nationally accredited coaching
access for more than 700 home-based programme to develop a core group of internal
colleagues with poor connection speeds – coaches
this will complete in 2019/20.
■■ extended our new talent management purpose as we need to make sure that everyone
programme to support colleagues at a range receives good care that respects their human
of levels to develop leadership capability rights.
■■ continued to redesign our online learning and We organise our developmental work on equality
development system with a more accessible under five equality objectives that have been in
interface and easier route to find courses and place from 2017 and have been updated for the
learning opportunities. 2019 to 2021 period. Seventy-five per cent of
respondents to our 2019 provider survey agreed
that CQC’s work is effective in advancing
Developing our future leaders
equality in services.

We further developed our talent 1. Confident with difference:

management strategy and extended it to a person-centred care and equality
wider range of levels across CQC. The
We have continued our focus on ensuring that
strategy is designed to support colleagues
adult social care and mental health inpatient
who have the aspiration and potential to
services meet the needs of lesbian, gay, bisexual
progress upwards in CQC. It also supports
and trans (LGBT) people through providing
our succession planning, which mitigates the
information and training for our inspection
risk of us not being able to fill critical roles.
colleagues. We have also produced guidance on
The talent pipeline is supported by a suite of
how we should consider religion, faith and belief
development opportunities, most notably
on inspections. Our new guidance for providers
our new Shaping our Future Leaders
on sexuality in adult social care services also
programme. It focuses on preparing
covers issues for LGBT people.
colleagues who are ready to become leaders
to make sure they understand the
2. Accessible information and
expectations of a managerial role and are
supported to step into an opportunity when
communication
it arises. A cohort of 100 people started the The NHS Accessible Information Standard (AIS)
programme in May 2019. makes sure that disabled people receive
information in a way that they can understand,
when they are using publicly-funded health and
social care services. We aim to look at how
Equality, diversity and human health and social care providers meet the AIS in
rights all our inspections. We have completed the first
We have increased our focus on equality, year of our monitoring of the AIS and we will
diversity and human rights in CQC. We have set report on this in State of Care 2018/19. We are
out a vision for inclusion for our people that will continuing work to make CQC more accessible
be embedded across the organisation during for disabled people.
2019/20. We continued our statutory duty to
report on the protected equality characteristics 3. Equality and the well-led provider
of CQC employees (figure 5). We have continued to look at workforce equality
We have also reviewed our human rights in our inspections of hospitals, with a particular
approach. This sets out our overall strategy for focus on the Workforce Race Equality Standard
equality and human rights in our regulatory work (WRES). We will report more fully on this in
over the next four years. This is central to our State of Care 2018/19.
4. Equal access to care and equity of ■■ Disability Equality Network
outcomes in local areas ■■ Race Equality Network
We have worked with Doctors of the World to ■■ Lesbian, Gay, Bisexual and Transgender Plus
better understand access to care issues for (LGBT+) Network
refugees, asylum seekers and undocumented
migrants, and the impact of how NHS secondary ■■ Carers’ Equality Network
care charging is being implemented. We have ■■ Gender Equality Network (newly established
started to embed equality of access and in 2018)
outcomes into our work looking at the quality
of care in local areas. ■■ Equality and Human Rights Network, which is
made up of more than 450 CQC colleagues
5. Continue to develop a diverse and is proactive in many different ways in
workforce with equal opportunities building equality and human rights into our
for everyone and a culture of regulatory work. The network meets regularly
to learn and share challenges on equality and
inclusion
human rights.
We published the results of a report we
commissioned to look at two specific areas of Operational performance
our WRES data, most notably the decline in

PE RFORMANCE RE PORT
people from a Black and Minority Ethnic (BME) We made important advances in some of our key
background who were shortlisted for a role but performance areas. Specifically, reducing the
were not appointed. The report’s author, a time we take to write inspection reports. Our
research fellow from Middlesex University with performance in this area has improved
expertise in race inequality in the health sector, substantially since 2017/18 with reports now
held a series of workshops with our people to publishing much more quickly after inspection.
explore the findings and recommendations. We were close to meeting our targets with
The outcome has been a CQC commitment to 86% performance against a target of 90%.
inclusion with strong support from our Board, This compared with 81% in 2017/18.
alongside new inclusion KPIs for 2019/20 We made significant improvements to our work
(Accountability report, page 53). planning system (Cygnum), including rolling
We are also committed to reporting on the out activity recording across all directorates.
Workforce Disability Equality Standard (WDES) This will give us a broad set of data to better
for CQC, addressing any inequality of plan and learn from all aspects of our work.
opportunity and improving the experience of our In our 2018 inspection team survey we saw
people. We will publish our first WDES report some increase in inspection colleagues who
later in 2019/20. agreed that Cygnum helps them to do their
jobs.
We continued the success of our equality and
diversity networks for colleagues. We now have Our customer service performance remained
six networks that are an inspirational driver for strong. All types of call responses exceeded
our inclusion and diversity work across the performance targets. The technical changes we
organisation. A member of one of the networks made to our customer service centre in 2016/17
now attends every Board meeting on a rotational (such as new phone equipment that allows
basis and is part of every senior-level real-time reporting and follow-up after calls)
recruitment panel. The networks are the: have now made an impact.
Figure 5: CQC employee equality profiles as at 31 March 2019
Our equality profiles remain very similar to the previous year across all characteristics.
Ethnicity Disability Sexual orientation
100 100 100

90 86.8% 90

80
78.3% 80 80 77.0%
70 70

60 60 60

50 50

40 40 40

30 30

20 20 20 17.4%
12.6%
9.1% 6.9% 6.3%
10 10 5.6%
0 0 0
White BME Not No Yes Not Hetero- LGBT Not
known known sexual known

Gender Religious belief

80 80

69.8% Christianity
70 70
Other (including
60 60 Buddhism,
Hinduism, Islam,
50 50 Judaism, Sikhism)
42.5%
40 40 37.9% Atheism
30.2%
30 30 Not known

20 20
10.1%
10 10 9.5%

0 0
Female Male

Age
20

15.2%
15 14.4% 13.9% 14.1%
13.2%
12.0%
10.9%
10

6.3%
5

0
30 and under 31–35 36–40 41–45 46–50 51–55 56–60 61 and above
 Saving time in publishing inspection reports

Our inspection reports were taking too long to write and quality assure, and inspectors were
finding the process was a pressure on their workloads. We wanted to publish our reports much
more quickly to help inform people using services, and to encourage providers to improve.
Inspectors, policy experts and other colleagues came together to develop a more efficient process, using
quality improvement methods to identify where the most useful changes could be made. Group
discussions and regular testing of each new change were a feature of this work, and we involved
members of the public and providers in the design and improvement. Examples of improvements include:
■■ a clearer writing template that includes short standard statements, where appropriate, to save
time where information tends to be similar
■■ a shorter, clearer summary so that readers can get to the relevant information quickly,
accompanied by a more detailed evidence table, some of which can be filled in before the
inspection to save time during the visit
■■ a streamlined quality assurance process. There is now just one combined panel of experts who
review reports. This is then followed up by retrospective reviews to ensure consistent judgements.

PE RFORMANCE RE PORT
We have seen substantial improvements across all sectors in the time taken to publish reports:
92% of primary medical services reports, 86% of adult social care reports (improving to 90% in
the final quarter of 2018/19) and 70% of hospitals reports (hospitals with three or more core
services) published within timescale, compared with 85% for primary medical services, 84% for
adult social care and 49% for hospitals in 2017/18.
We have also reduced the time spent on report writing which has helped us make savings.
For example, more than a third (41%) of time has been saved in the Adult Social Care directorate,
which amounts to around 100,000 hours annually.
Some of the changes did not go live until early 2019, and some are at earlier or later stages
depending on the sector. We expect to see continued improvement in 2019/20. We anticipate
that our investment in digital process changes will take the inspection report publishing process
to the next stage, allowing for further efficiencies and quality improvements.

Financial efficiency and for work for which we cannot charge fees, such
effectiveness as thematic reviews and local system reviews.
This non-chargeable income has increased as
What we received we have been asked to carry out additional
work outside of our core remit.
We received total funding of £234.0 million in
2018/19. We received it in the form of income
What we spent
from providers (£204.3 million), reimbursement
for services and other operating income (£1.5 We managed within our resource budget for
million), and funding from DHSC (£28.2 million) 2018/19. Our operating expenditure
(figure 1, page 10). The funding from DHSC was (excluding non-cash items) increased from
£218.4 million to £227.7 million in
2018/19.* This enabled us to fund operational plan, will contribute towards meeting our
activity while also making sure that we had a strategic priorities and delivering long-term
strong organisational focus on reshaping our efficiencies. Our capital investment also
plans, projects and timescales as part of our increased from £7.7 million to £10.3 million for
change and transformation programme. This the same reasons as our expenditure. The split of
investment, together with a five-year financial costs is shown in figures 6 and 7.
Figure 6: Expenditure 2018/19
£1.4m
£1.4m £1.3m
£4.0m
£5.7m
£11.6m

Permanent staff
£12.1m
IT
£12.5m Premises
Other staff
£16.4m Travel and subsistence

£161.3m Office expenses

Experts by Experience
Consultancy/legal fees
Other staff costs
Other costs

Figure 7: Capital investment 2018/19

£0.5m
£0.6m
Digital – employee experience
£0.7m Digital – core technology
Cross cutting
£4.1m Registration transformation
£1.3m programme
Monitor
Estates
Enabling intelligence
£1.5m

£1.6m

* Note that these figures reflect the expenditure included in our operating segments and do not include the non‑cash
adjustments that appear in the financial statements, such as depreciation charges and long-term provisions. (See note 2 of
the Financial statements for further details.)
Ensuring value for money ■■ enforcement activity cost reduced from 5% of
our cost base to 3%. Dedicated teams have
As we become a digitally-enabled, intelligence-
been created to manage this activity. We are
driven organisation, we will increasingly use our
monitoring time-recording for a fuller
information and data to more effectively target
understanding.
inspections where the risk to the quality of care
is greatest, and to take decisive enforcement
Reaching full cost recovery on
action to protect people. The balance of
activities driving our costs changed during
provider fees
2018/19 as we moved to more focused Our objective to recover all of our costs of
inspections in the Hospitals directorate and regulation from fees charged to providers (over a
increased our monitoring of data and four-year trajectory) will be achieved in
information (figure 8). Our: 2019/20, as required by government policy.
In 2018/19, fees from providers made up 87.3%
■■ registration activity cost was consistent at
(2017/18: 84.6 %) of our total funding.
10% of our total cost base, in the context of
increased demand, particularly around Last year, as we approached full cost recovery of
refusing registration to providers where the our regulatory costs, we began to regularly
quality of care is not good enough, and more review our fee income and costs of regulation to
unregistered providers being identified see whether we had over- or under-recovered

PE RFORMANCE RE PORT
against fees. Section 2.3 of note 2 to the
■■ monitoring activity cost increased from 22%
Financial statements (page 103) provides more
to 35% of our total cost base
detail on this analysis. We set a balanced budget
■■ inspection activity cost as a percentage of our on both costs and income at the start of
total cost base reduced from 52% to 41% 2018/19 using the best data available to us.

Figure 8: Cost of our operating model

100
90
80
70
60
52%
50
41%
40 35%
30
22%
20
10% 10% 8% 8%
10 5% 3% 3% 3%
0
Registration Monitoring Inspection Enforcement Independent Non-
Voice chargeable
2017/18 2018/19
This data inevitably varies throughout any year, Business Impact Target
and can result in a surplus or deficit at the end
The government’s Business Impact Target aims to
of the year, therefore we need to set fees to
reduce the regulatory burden on business. We are
make sure we break even over a period of time.
required to assess the impact on businesses of all
For 2018/19, we had a small deficit of £2.0
eligible changes to the way we regulate and
million (1.0% of fee income received), which
report this to the independent Regulatory Policy
followed on from a small surplus of £1.3 million
Committee (which works with the Better
(0.7% of fee income received) in 2017/18. We
Regulation Executive) by May each year.
will continue to monitor this over future years.
In July 2018, we received approval from the
Regulatory Policy Committee for a regulatory

An efficient and more connected working environment

Our estates strategy aims to provide a working environment that best supports our people to
perform at their best, aligns with our regulatory approach, meets our cost constraints, and
supports Office of Government Property guidance.
Our current estate comprises seven buildings in Birmingham, Bristol, Leeds, London, Newcastle,
Nottingham and Preston. We also have access to four satellite ‘drop-in’ offices. More than 65%
of our people are home-based workers, and those who are office-based are agile workers and can
vary their working locations and use of desk space.
We made a range of efficiency savings during 2018/19 through rationalising our estate, while
still supporting the importance of location, culture, wellbeing and connecting people. We have:
■■ agreed in principle to move our London office to a smaller and more cost-effective building in
Stratford (East London) in 2021
■■ agreed to close our Preston office and consolidate it with the Manchester satellite office
■■ closed our Southampton satellite office
■■ released 900m2 of our London office space that was not needed to the Health and Safety
Executive, which has saved us more than £1 million per year
■■ refurbished our current London office space to provide a better design and meeting space for
agile working, visitors and permanent office colleagues
■■ relocated our Bristol office into the government hub building, occupying a smaller floor space
with 40 fewer desks
■■ held wellbeing events to support colleagues to connect better within offices and to create
welcoming office environments for visiting home workers.
We continued to support the Cabinet Office’s four principles of HQ, Home, Host and Hub and we
worked closely with DHSC to make sure that we align our efforts wherever possible, particularly
to the Government Hub Strategy which encourages a smarter, leaner, more fit-for-purpose estate,
with a focus on efficiency.
assessment we had produced during the previous and services to make sure that they have
year (covering the period from June 2017 to sustainable working practices with supporting
June 2018). Our assessment showed that, on policies. We have pledged to support the ban on
balance, we had saved businesses money by single use plastics, and we are looking closely at
making a change to the way we regulate, and transport and promoting alternative sustainable
that we had contributed a £6 million saving to transport options, including our employee
the Business Impact Target. This saving was cycle-to-work scheme.
achieved by making changes to our adult social
care guidance for providers. We redesigned and Targets and performance
simplified the guidance to make it more
All but one of our offices is supplied via landlord
accessible online, and to make it easier to use
service charge, which includes utility costs
and understand. This has helped to save time for
presented on a pro rata m2 basis rather than
providers. We report assessments of our impact
using actual consumption data. Therefore, there
on business on our website.
may be some limitations to the accuracy of our
financial and non-financial sustainability data.
Information requests
Since 1 April 2011, the Greening Government
In 2018/19 we responded to 999 requests for Commitment (GGC) Operations and Procurement
information under the Freedom of Information targets have required us to reduce our
Act 2000, the Environmental Information

PE RFORMANCE RE PORT
greenhouse gas emissions from a 2009/10
Regulations 2004 and the subject access baseline by 25%, and domestic business travel
provisions of the General Data Protection flights by 20% by March 2015 from a 2009/10
Regulation (GDPR). We responded to 94% baseline. In July 2016, GGC provided updated
of these requests within their legal deadlines, operational targets and guidance:
which is in line with the Information
Commissioner’s Office (ICO) benchmark of 90%. “Compared to a 2009/10 baseline, by 2019/20
Of these requests, 32 resulted in an internal the government will:
review (where the applicant asked CQC to ■■ Cut greenhouse gas emissions by 32% from the
reconsider our response) of which 14 were fully whole estate and UK business transport, with
or partially upheld. The ICO issued three decision bespoke targets applying to each department.
notices relating to CQC responses. In two of
these notices, the ICO recorded that CQC had ■■ Reduce the number of domestic business
failed to comply with the legal deadline, but no flights taken by 30% (excluding Ministry of
complaints were upheld about CQC refusing to Defence frontline command flights).
disclose the requested information. ■■ Reduce waste sent to landfill to less than 10%
of overall waste; continue to reduce the
Environmental sustainability amount of waste generated; and increase
Our sustainability aim is to reduce the impact of the proportion of waste that is recycled.
our business on the environment. Our priority is to ■■ Reduce paper consumption by 50%.
reduce our carbon dioxide (CO2) emissions.
Efficient use of our IT systems and accommodation
■■ Continue to further reduce water
is an important strand of this work. consumption. Each department will set
internal targets and continue to improve on
We have established a Sustainability Steering the reductions they had made by 2014/15.”
Group and we have developed a sustainability
development management plan. We have an Figures 9 to 13 show our CO2, energy, water and
ongoing dialogue with our suppliers of goods waste use.
Figure 9: Carbon dioxide emissions, 2018/19
Area CO2 emissions 2018/19 2018/19 Performance against
(tonnes)* Units Cost 2017/18
£
Building energy 1,442 4,229,872(kWh) 274,567 Unit decrease/cost increase
Travel (rail) 662 8,834,779(m) 4,168,932 Unit decrease/cost increase
Travel (road) 1,279 5,433,393(m) 2,777,859 Unit decrease/cost increase
Travel (air) 51 201,670(m) 71,793 Unit decrease/cost increase
Total 3,434 n/a 7,293,151
*CO2 calculated from: www.carbon-calculator.org.uk

Figure 10: Carbon dioxide emissions indicators, 2016/17 to 2018/19

Non-financial indicators (CO2)* 2018/19 2017/18 2016/17
(tonnes) (tonnes) (tonnes)
Gross emissions (buildings) 1,442 1,425 1,295
Gross emissions (business travel) 1,941 2,422 2,480
Total 3,383 3,847 3,775

Financial indicators (£) 2018/19 2017/18 2016/17

Expenditure on official business travel 7,224,445 6,640,901 6,509,111
*CO2 calculated from: www.carbon-calculator.org.uk

Figure 11: Energy use indicators, 2016/17 to 2018/19 against baseline

Non-financial indicators – energy 2018/19 2017/18 2016/17 2009/10
consumption (kWh)
Electricity 3,963,332 3,130,011* 2,681,974 3,641,075
Gas 266,539 914,872 1,030,109 2,004,344
Total (kWh) 4,229,871 4,044,883 3,712,083 5,645,419

Financial indicators (£) 2018/19 2017/18 2016/17 2009/10

Total energy expenditure 274,567 271,941* 289,242 525,935
*Electricity data from 151 Buckingham Palace Road in 2017/18 was an estimate from costs incurred.

Figure 12: Water use indicators, 2016/17 to 2018/19 against baseline

Non-financial indicators 2018/19 2017/18 2016/17 2009/10
Water consumption (m3) supplied* 9,384 11,329 10,950 16,388

Financial indicators (£) 2018/19 2017/18 2016/17 2009/10

Total water expenditure 6,501 6,727 14,075 n/a
*Water use data has not been supplied by all landlords and therefore some estimates are used. Costs for water only relate
to two offices as the other offices include water use in their overall service charge.
Figure 13: Office waste indicators, 2016/17 to 2018/19 against baseline
Non-financial indicators (tonnes) 2018/19 2017/18 2016/17 2009/10
Non-hazardous waste (landfill) 28 30 22 27
Non-hazardous waste (re-used/recycled) 156 187 163 143
Total waste 184 217 185 170

Financial indicators (£) 2018/19 2017/18 2016/17 2009/10

Total disposal costs 10,529 21,384 27,701 n/a

Risk management Risk tolerance statement

CQC faces a broad range of risks that reflect our CQC’s Board are responsible for setting the risk
responsibilities as a regulator. These include risks tolerance for the organisation. In terms of risks
that have an effect on providers of health and that CQC can manage, we generally have a low
social care services as well as the day-to-day tolerance for risk (risk averse). The risks we face,
delivery of our operations. Risk is unavoidable, were they to materialise, would have a
but high-performing organisations make sure substantial impact on the public and therefore
that they focus on the right risks and consider we take them very seriously.

PE RFORMANCE RE PORT
risk when making decisions. The range of risks that CQC often faces fall into
We have set out some of the principal risks that five major categories: public confidence,
we managed in 2018/19 in figure 14. Each risk operational, regulatory and legal, information,
rating relates to the risk after mitigation. and financial.
New risks were added during 2018/19 that These risks can affect CQC strategically or
included risks to providers and CQC relating to operationally and they are not distinct.
a potential exit from the EU; and the risk that For example, taking risks to maintain public
we do not have enough capacity and capability confidence in us as a regulator may expose us
to deliver our programme of change and to legal risk. A full list of risks and mitigating
improvement. We also identified changes in the actions, alongside further detail on our risk
landscape of health and social care, including tolerance, is available in our business plan for
technology-enabled care, and the integration of 2019/20.
care systems, which risks our model of regulation
becoming ineffective if it is not relevant to
the way services are managed and delivered.
We regularly review our risks at Board, executive
team and directorate levels. The Audit and
Corporate Governance Committee (ACGC) has
a specific role to oversee how we manage
corporate risk in CQC.
Figure 14: Principal risks and mitigations
Risk Mitigation

Priority one: Encourage improvement, innovation and sustainability in care

Medium If we do not have impact in We are carrying out development activity relating to
encouraging improvement, innovation innovation, whole system regulation, and engaging
and sustainability in care, then people who use nationally, locally and with provider groups.
services are at risk because poor quality care does not
improve, and the development of innovative or
technology-based care is hampered by inconsistent
regulation.

Medium If a change of external environment in We are conducting horizon scanning, testing and
health and social care occurs with piloting activity, as well as engaging with DHSC.
implications for CQC’s role (such as integration of
health and care services) then we could become less
effective in identifying risk and ensuring the quality
of care, and we will be unable to effectively deliver
our purpose. This includes if we are unable to define
our role in line with the NHS long-term plan.

Medium If we fail to implement an effective We are testing approaches and encouraging local
approach to regulating place-based integration activity.
and emerging new models of care, we could become
less effective and relevant in identifying risk and
ensuring the quality of care.

Priority two: Deliver an intelligence-driven approach to regulation

Medium If we do not effectively collect and We are scoping, planning and delivering our
process information then we will not intelligence-driven change programme.
be able to help the public to make decisions about
care, and CQC colleagues and our stakeholders will
not have quality information with which to make
regulatory decisions.

Medium If we do not effectively implement We are implementing a programme that makes

and evolve our operating model then improvements to the way that we manage
people who use services may be at risk of harm regulatory risk.
(if we do not effectively identify and manage risks
to the quality of care) or providers will be able to
successfully challenge us. Our model will not be
relevant in a changing health and care landscape.

Medium If the changes in our strategy are not We are progressing our digital programme activity,
well supported by IT technologies and including prioritisation and planning, and building
systems, then critical digital products will be delivered capacity and skills, within the wider scope of
late, will not be effective, or will be over budget. improving how we manage change activity.
Risk Mitigation

Priority four: Improve our efficiency and effectiveness

High If we do not have the capacity or We are designing and will deliver quality improvement
capability to effectively deliver change capability building for teams across CQC;
and quality improvement in CQC then we will not implementing a partnership approach with experts
realise the benefits envisaged in our strategy. that will support quality improvement and the transfer
of knowledge.

Low If we fail to improve the experience of We continue to deliver the key priorities in our people
our people then morale and wellbeing programme. These are: the changing nature of our
will be affected, and we will not be able to recruit the work; attraction and retention; our people strategy;
right people with the right skills in the right places. workload and wellbeing; diversity and inclusion;
learning and development; equipment and
technology; and quality improvement, autonomy
and empowerment.

Medium If an EU exit affects access of EU We have put a dedicated senior responsible officer
nationals to UK employment and and a planning team in place to lead on engagement,
government resourcing, then this could: impact on preparation and response to changes relating to a
providers’ ability to provide good quality care, due to potential EU exit, working closely with DHSC and
recruitment issues; impact on CQC’s ability to recruit national stakeholders.

PE RFORMANCE RE PORT
people; and impact on CQC’s ability to obtain capital
funding for our change programme.

Medium If we do not successfully deliver our We are recruiting into key leadership roles; procuring
future IT services programme, which is a design partner; re-working our financial model and
to secure our future digital services provider, then we revising our business case.
will not be able to operate.
Strategic measures
Strategic measure Result

Our people

Our people understand the strategic 66% of employees agreed in our 2018 people survey that they
direction of CQC. understand CQC’s strategic direction. This compares with 75%
in 2017.

Our people believe that CQC 68% of employees agreed that CQC employees display the values
colleagues display the values and and behaviours. This remains the same as 2017.
behaviours of the organisation.

CQC employees complete compulsory 94% completion rate.

training.

CQC employees say that their 40% of employees said that they can access the right learning and
learning and development needs development opportunities when they need to. This is up two
are being met. percentage points from 2017.
48% of CQC employees said that learning and development activities
they have completed in the past year had helped to improve their
performance. This remains the same as 2017.

Operational efficiency and effectiveness

Providers think that inspection teams 82% of providers said in our 2019 provider survey that the
have the correct skills and expertise to inspection team at their most recent inspection had the appropriate
effectively inspect their service. skills and expertise to inspect their service. This remains similar to
2017.

Our revised systems, tools and 7% of providers reported that the amount of their staff’s time spent
processes save time for providers on CQC regulation had decreased in the last year, compared with
and CQC colleagues. 41% who reported that it had increased.
20% of inspection team members agreed in our 2018 inspection
team survey that the systems they use on a day-to-day basis enable
them to do their job effectively, compared with 32% in 2017.
24% of inspection team members agreed that Cygnum is an effective
tool when scheduling and planning inspection activity, compared
with 17% in 2017.
42% of employees said in our people survey that that they do not
have the equipment and tools to carry out their roles, compared with
50% in 2017.

Inspectors think that Experts by 80% of CQC inspection colleagues said in our inspection team survey
Experience have the skills and that Experts by Experience have the skills and expertise to fulfil their
expertise to fulfil their roles. roles. This compares with 81% in 2017.
Key performance indicators
KPI Result Met target

Our people

Employee engagement Our employee engagement score was 61%, down by one Not met
score increases.
▼ percentage point from 2017. Our score remains below
our target of 64% or more but in line with the public
sector benchmark.

Employee sickness rate is Our average employee sickness rate was 3.8%. Met
less than 5%. This remains the same as 2017/18 and is within our
benchmark.

Our customers

There has been a decrease We received 248 complaints and 99.6% of these were Met
in upheld challenges and acknowledged within three days against a target of 95%.
complaints about CQC. This remains the same as 2017/18.
Our complaints process remains stable and very
responsive one year on from a range of improvement
measures being implemented.

PE RFORMANCE RE PORT
Two complaints were referred to the Parliamentary and Met
Health Service Ombudsman (PHSO) and none were
upheld, against a target of less than 3%.

We meet our customer 87% of general calls were answered within our target of Met
service targets.
▲ 80% in 30 seconds. This compares with 81% in 2017/18.

87% of registration calls were answered within our target Met

▲ of 80% in 30 seconds. This compares with 83%
in 2017/18.

98% of correspondence was answered within our target Met

▲ of 90% within three days. This compares with 89% in
2017/18.

We meet our high-risk and 95% of safeguarding calls were answered within our Met
concerns call targets.
▲ target of 90% in 30 seconds. This compares with 93%
in 2017/18.

95% of mental health calls were answered within our Met

▲ target of 90% in 30 seconds. This compares with 91%
in 2017/18.
KPI Result Met target

We produce inspection Adult Social Care directorate: 86% of reports published Not met
reports quickly.
▲ within 50 days against a target of 90% (improving to
90% in the final quarter of 2018/19). This compares
with 84% in 2017/18.

Hospitals directorate (independent health or NHS Not met

▲ hospitals with two or less core services): 56% of reports
published within 50 days against a target of 90%.
This compares with 30% in 2017/18.

Hospitals directorate (NHS hospitals with three or more Not met

▲ core services): 70% of reports published within 65 days
against a target of 90%. This compares with 49% in
2017/18.

Primary Medical Services directorate: 92% of reports Met

▲ published within 50 days against a target of 90%.
This compares with 85% in 2017/18.

Finance and business plan

Variance from operating £1.4m (0.6%) under budget. This compares with Met
budget (target is between
▲ £6.3m (2.8%) under budget in 2017/18.
£0 and <£4m underspend)

Variance from capital £2.8m (21.5%) under budget. This compares with Not met
investment budget (target
▼ £2.3m (25%) under budget in 2017/18.
is between £0 and <£2m
underspend

Ian Trenholm
Chief Executive, Care Quality Commission
15 July 2019
2
Accountability
report
The accountability report consists of four sections:

Corporate governance report 52

The composition and organisation of CQC’s governance structures and how this
supports the achievement of our objectives.

Remuneration and people report 68

The policy for remuneration of Board members, independent members and senior
executive employees that Parliament and other users see as key to accountability.

Parliamentary accountability and audit report 82

The key parliamentary accountability documents in the annual report and accounts.

Certificate and report of the Comptroller and Auditor General 84

to the Houses of Parliament
Corporate governance report
The corporate governance report provides an explanation of how CQC is governed, how this supports
our objectives and how we make sure that there is a sound system of internal control allowing us to
deliver our purpose and role.

Directors’ report meetings is detailed in figure 16. Sir David Behan

stepped down as Chief Executive on
11 July 2018 and was replaced by Ian Trenholm,
who joined CQC on 30 July 2018. Andrea
CQC’s governance Sutcliffe acted as Chief Executive for the time
framework and structures between David’s departure and Ian starting.
Andrea Sutcliffe left CQC on 13 January 2019 to
CQC has a corporate governance framework that take up a new appointment as Chief Executive
describes the governance arrangements of the and Registrar of the Nursing and Midwifery
organisation and how they help make sure that Council. Deborah Westhead, a Deputy Chief
our leadership, direction and control enables Inspector in the Adult Social Care directorate,
long-term success. This framework is available was appointed as Interim Chief Inspector, and
on our website. Figure 15 shows our governance Kate Terroni has now been appointed to the role
structure. permanently. Kate took up the role on 1 May
2019.
CQC’s Board Steve Field stepped down from his role as Chief
The Board has a number of roles that are set out Inspector of General Practice and was succeeded
in legislation and in our framework agreement by Dr Rosie Benneyworth from 4 March 2019. The
with DHSC. These are reflected in CQC’s role has been retitled as Chief Inspector of Primary
corporate governance framework and other Medical Services and Integrated Care to better
related governance documents. There have been reflect the varied work of the directorate. The new
no significant departures from the processes set title incorporates the function of Chief Inspector
out in these documents during the year. of General Practice, which is set out in Schedule 1
(3A) of the Health and Social Care Act 2008.
Our unitary Board is made up of our Chair (Peter
Wyman) and up to 14 Board members, the Kirsty Shaw, Chief Operating Officer, joined the
majority of whom must be non-executive Board on 1 October 2018.
members. The current composition of the Board is Jane Mordue stepped down from her role as the
eight non-executive members, our Chief Chair of Healthwatch England on 30 September
Executive (who is also the Accounting Officer), 2018 and was succeeded from 1 October 2018
our three Chief Inspectors, our Executive Director by Sir Robert Francis.
of Strategy and Intelligence and our Chief
Operating Officer. One of our non-executive Mark Sutton has been appointed as Chief Digital
directors (Professor Paul Corrigan) acts as the Officer and took up his role in April 2019. Mark
Senior Independent Director. is now a member of the Executive Team and
attends Board meetings.
Membership of the Board changed during the
year; the membership and attendance at Biographies of all our Board members and their
declarations of interest are shown on our website.
Performance The Board meets both in public and private
session throughout the year. Public sessions of
The Board looks at a range of business in line the Board are recorded and are available to view
with its main responsibilities, which are to: on CQC’s website following each meeting. At each
■■ provide strategic leadership to CQC and of its meetings, the Board receives performance
approve the organisation’s strategic direction data setting out the current performance and
financial position, and details of activity to
■■ set and address the culture, values and address where performance is under plan. The
behaviours of the organisation Board has the opportunity to scrutinise and
■■ assess how CQC is performing against its discuss the data during these meetings.
stated objectives and public commitments. Following an independent Board effectiveness
review in 2017, the Board took part in a
A culture of diversity and coaching and development session in
inclusion September 2018.
The Board has continued its commitment to
achieving outstanding levels of governance as
A series of workshops were held with the
CQC would expect of providers when assessing
Board to listen to the lived experiences of
whether they are well-led. It has done this by

ACCOUNTABILITY RE PORT
colleagues with different equality
providing oversight and challenge on key issues,
characteristics, and to develop an
including:
organisational approach to diversity and
inclusion. ■■ Ongoing oversight of our financial and business
planning for 2019/20 and the development of
The Board reviewed and approved the
our priorities for 2019/20.
recommendations of a report that we had
commissioned to respond to our Workforce ■■ Comment and advice on the development and
Race Equality Standard (WRES) data; delivery of the programme of work within the
specifically how likely people from a Black change and transformation programme – the
and Minority Ethnic (BME) background digital and intelligence strategy; the
were to be shortlisted for a role but not registration transformation programme; our
appointed. The Board also approved CQC’s people strategy; and the quality improvement
new organisational vision for inclusion. programme.
As a direct result of the discussions at the ■■ In light of scrutiny by the ACGC, approval of
Board, it was agreed that a member of one strategic and high-level operational risks,
of CQC’s equality networks should sit on ratings and mitigations for 2018/19.
the monthly Board meetings on a rotational
basis and on every senior-level recruitment
panel to provide support and challenge
around diversity and inclusion issues.
 ■■ Agreement of proposals for the provider fees
Freedom to Speak Up consultation for 2019/20.
■■ Monthly consideration and scrutiny of
The Board approved a revised Freedom to corporate performance, with a more detailed
Speak Up policy for CQC colleagues. This session scheduled on a quarterly basis.
brought CQC in line with NHS England and ■■ Time spent with colleagues in NHS England
NHS Improvement guidance, and with and NHS Improvement looking at digital
national best practice. transformation and cyber security in the
The Board received progress updates health and social care system.
throughout the year from CQC’s Freedom to ■■ Both the ACGC and the Regulatory
Speak Up Guardian. There are now more Governance Committee produce an annual
than 100 colleagues who are Speak Up report of their activity which is presented to
Ambassadors and a training programme has the public session of the Board in its June
been embedded across the organisation. meeting each year. It is also made available
The Board spent time listening to the through CQC’s website with the other public
thoughts, experiences and reflections of the Board papers.
ambassadors, and considering some of the
challenges that face the Speak Up agenda.
The Board also highlighted the importance
of linking speaking up with diversity and
inclusion, and our work on safety and risk.
CQC’s Freedom to Speak Up Guardian is now
a member of our National Strategy Group
on Wellbeing.
Figure 15: CQC’s governance structure

Statutory Committees of the Board Committees

Healthwatch England Parliament of the Executive
The Health and Social Care Act 2012 made Team
provision for the establishment of a statutory Safeguarding and
committee within CQC, Healthwatch England. Responding to
Its purpose is to be the national consumer Concerns Committee
champion for users of health and social care
services and to provide CQC and other bodies Department Provides organisational
assurance on the
with advice, information and assistance. of Health and strategic direction
and assurance for
Cross-Sector Provider Advisory Group Social Care safeguarding and
The Health and Social Care Act 2008
quality risks.
(Schedule 1, Section 6) requires CQC to have
an advisory committee, “for the purpose Health, Safety
of giving advice or information to it about and Wellbeing
matters connected with its functions”. Committee
The Cross-Sector Provider Advisory Group CQC Board Monitors CQC’s duty to
fulfils this function. discharge health, safety
Provides leadership to CQC,
sets its strategic direction and and welfare obligations
National Guardian (Freedom to Speak
holds the Chief Executive to our people.
Up) Office
The National Guardian Office was established to account for the delivery Resources

ACCOUNTABILITY RE PORT
in April 2016 to lead on culture change in of its objectives. Committee
the NHS. It has operational independence Oversees, monitors
from CQC and is jointly funded by CQC, NHS and, where delegations
Improvement and NHS England. permit, takes decisions
on the effective use
Sub-committees of the Board of CQC’s financial,
Audit and Corporate Governance Executive Team people and commercial
Committee (ACGC) Overall senior executive resources.
Provides assurance to the Board on risk forum of CQC that makes
management, governance and internal Strategic Change
decisions on the strategy,
control. It also engages with our internal Committee
policy and operations
and external auditors, to determine the Oversees the effective
of CQC and, where relevant,
priorities for audit work. delivery of CQC’s
makes recommendations
strategic changes.
to the Board.
Regulatory Governance Committee
(RGC)
Provides assurance to the Board that systems,
processes and accountabilities are in place
for identifying and managing risks associated
with delivering the regulatory programme.
CQC directorates
Finance Committee Adult Social Care
Provided advice on financial management
(disbanded in March 2019). Hospitals

People and Values Committee Primary Medical Services

Oversees succession planning, employee and Integrated Care
development and talent management, Digital
and the understanding and application
of CQC’s values. Regulatory Customer
and Corporate Operations
Remuneration Committee (incl Registration
Determines remuneration of selected senior from 1 Jan 2019)
executives and considers overall pay policy. Strategy
and Intelligence
Figure 16: Board and committee membership and attendance
Name Role Role Term of Attendance*
appointment Board ACGC RGC FC RemCom
Peter Wyman Non-Executive Chair & Chair 4 Jan 2016 – 11/11 2/2 5/5
CBE DL Director of RemCom 3 Jan 2020
Sir David Executive Chief Executive 5 Nov 2012 – 4/4 1/1
Behan CBE Director and Chair of FC 11 Jul 2018
Ian Trenholm Executive Chief Executive From 30 Jul 7/7 1/1
Director and Chair of FC 2018
Prof. Louis Non-Executive Chair of RGC 1 Jul 2013 – 9/11 5/5 3/5
Appleby CBE Director 30 Jun 2019
Prof. Edward Executive Chief Inspector From 31 Jul 10/11
Baker Director of Hospitals 2017
Dr Rosie Executive Chief Inspector of From 4 Mar 1/1
Benneyworth Director Primary Medical Services 2019
and Integrated Care
Prof. Paul Non-Executive 1 Jul 2013 – 10/11 4/5 4/5
Corrigan CBE Director 30 Jun 2019
Prof. Steve Executive Chief Inspector 30 Sept 2013 – 10/10
Field CBE Director of General Practice 31 Mar 2019
Sir Robert Non-Executive Chair of Healthwatch 1 Jul 2014 – 11/11 2/2 4/5
Francis QC Director England from 2018 30 Jun 2020
Dr Malte Executive Executive Director of From 11 Jul 8/8
Gerhold Director Strategy and Intelligence 2016
Jora Gill Non-Executive 1 Nov 2016 – 9/11 2/5
Director 31 Oct 2019
Jane Mordue Non-Executive Chair of Healthwatch 19 Dec 2015 – 6/6
Director England to Sep 2018 30 Sep 2018
Sir John Non-Executive 1 Jan 2018 – 11/11 4/4 4/5
Oldham OBE Director 31 Jul 2020
Paul Rew Non-Executive Chair of ACGC 1 Jul 2014 – 9/11 4/4 4/5 2/2 4/5
Director 30 Jun 2020
Mark Saxton Non-Executive 1 Mar 2018 10/11 1/2 2/5
Director – 31 Jul 2020
Liz Sayce OBE Non-Executive 1 Jan 2018 – 9/11 4/5 5/5
Director 31 Jul 2020
Kirsty Shaw Executive Chief Operating From 1 Oct 5/6
Director Officer 2018
Andrea Executive Chief Inspector 7 Oct 2013 – 8/8
Sutcliffe CBE Director of Adult Social Care 13 Jan 2019
Deborah Executive Interim Chief Inspector From 3 Dec 3/3
Westhead Director of Adult Social Care 2018
Linda Farrant Independent 27 Jul 2015 4/4
member of ACGC – 26 Jul 2019
Key ACGC = Audit and Corporate Governance Committee RGC = Regulatory Governance Committee
FC = Finance Committee RemCom = Remuneration Committee
Note: The People and Values Committee did not meet during the year – its business was considered as part of full Board meetings
or Remuneration Committee meetings.
*The first figure shows the number of meetings attended and the second figure shows the number of meetings it was possible
to attend. For example, there were seven Board meetings that Ian Trenholm could have attended, and he attended all seven
(represented as 7/7). Grey cells indicate that the person is not a member of that committee.
Statement of The Secretary of State for Health has appointed
the Chief Executive as the Accounting Officer of

Accounting CQC. My responsibilities as Accounting Officer,

including responsibility for the propriety and

Officer’s
regularity of public funds and assets vested in
CQC, and for keeping proper records, are set out
in Managing Public Money published by HM
responsibilities Treasury.
As Accounting Officer I can confirm that:
Under the Health and Social Care Act 2008, the ■■ There is no relevant audit information of
Secretary of State for Health and Social Care has which CQC’s auditors are unaware.
directed the Care Quality Commission (CQC) to
■■ I have taken all steps I ought to have taken to
prepare for each financial year a statement of
make myself aware of any relevant audit
accounts in the form and on the basis set out in
information and to establish that CQC’s
the Accounts Direction. The accounts are
auditors are aware of that information.
prepared on an accruals basis and must give a
true and fair view of the state of affairs of CQC ■■ The annual report and accounts as a whole are
and of its net resource outturn, application of fair, balanced and understandable.

ACCOUNTABILITY RE PORT
resources, changes in taxpayers’ equity and cash
■■ I take personal responsibility for the annual
flows for the financial year.
report and accounts and the judgements
In preparing the accounts, the Accounting required for determining that it is fair,
Officer is required to comply with the balanced and understandable.
requirements of the Government Financial
Reporting Manual (FReM) and in particular to:
■■ observe the Accounts Direction issued by the
Secretary of State for Health, including the
relevant accounting and disclosure
requirements, and apply suitable accounting
policies on a consistent basis
■■ make judgements and estimates on a
reasonable basis
■■ state whether applicable accounting standards
as set out in the FReM have been followed,
and disclose and explain any material
departures in the financial statements, and
■■ prepare the financial statements on a going
concern basis.
Governance standard, called ‘whole organisation approach’.
This is designed to measure how effective we are
in: using people and resources collaboratively;
statement the consistency of our practices and application
of processes; and the consistency of our culture
and behaviours. A standard was removed –
‘quality management’ – and its criteria were
Management assurance incorporated into ‘continuous improvement’. We
introduced the standards during 2018/19, and
CQC has a management assurance framework
all directorates used them to complete self-
that has been designed to seek assurance from
assessments in February 2019.
all parts of the organisation that internal controls
are working effectively, and to identify areas of Assessment ratings are peer reviewed by another
concern. The assurance framework looks at eight directorate to consider whether:
areas of management responsibility:
■■ the rating is reasonable in the light of the
1. planning evidence presented
2. financial management, systems and control ■■ the approach to evidence is similar to that
taken by other directorates
3. performance and risk management
■■ there is any other evidence that contradicts an
4. whole organisation approach
assessment, for example key performance
5. people management and development indicators (KPIs) or other measures.
6. information and evidence management During 2018/19, Health Group Internal Audit
Service reviewed a selection of the directorate
7. governance and decision making
assessments, attended a cross-CQC peer review
8. continuous improvement. meeting, and reported on these to the ACGC.
They found no areas of significant concern,
Each of our directorates provides a self-
however they made some recommendations to
assessment (including a rating) against a clear
help improve consistency in how directorates
set of expectations of performance in these
complete their assessments, and to strengthen
eight core management disciplines. The
how directorates approach making improvements
assessments are peer reviewed by another
following the assessments.
directorate, then put through a collective
challenge by the Executive Team, before being The main findings from our assessments in
presented to the ACGC. 2018/19, together with some of the
improvement actions we have underway, are
Our management assurance processes have been
summarised below.
embedded over the last four years and have led
to improvements in how we manage ourselves. ■■ In 2018/19, 13 directorates carried out
Over time there has been a demand to update assessments, and out of the total of 104
and improve the definitions of our management ratings across these directorates, two (2%)
assurance standards, and to consider better ways were rated as outstanding, 79 (76%) were
of improving consistency and fairness in rated as good, and 23 (22%) were rated as
judgements. During 2017/18 we reviewed all of requires improvement. In 2017/18, 11
the standards for management assurance in the directorates carried out assessments and out
eight areas and piloted the new standards in of 88 ratings, 80 (90%) were rated as good,
February 2018. We also introduced a new
 and eight (10%) as requires improvement. ■■ Supporting inspection directorate planning
However, the standards were different in through better resource modelling. The
2018/19 and these standards have ‘raised the balance of costs has changed since 2015/16,
bar’. with the cost of inspection decreasing and the
cost of monitoring increasing. This shows the
■■ Financial management, systems and control;
planned change to our regulatory approach
governance and decision-making; and
with a stronger focus on intelligence-driven
planning were the areas rated most highly,
regulation (Performance report, page 41).
although performance against the new
standards was not as strong as in 2017/18, ■■ Completing the roll-out of our inspection
when the previous standards applied. scheduling system (Cygnum) to enable us to
more efficiently organise and target our
■■ We need to do more work on whole
inspections where the risk to quality of care is
organisation approach; continuous
greatest, and to better plan our activity across
improvement; performance and risk
the organisation.
management; and people management and
development. These areas are highlighted as While the improvements we have made to our
priorities in our business plan for 2019/20. planning are reflected in the management
assurance assessment of our performance, the
The following sections provide detail under each
delivery of our business plan for 2018/19 was
of the eight areas of management responsibility.

ACCOUNTABILITY RE PORT
more of a mixed picture.

1. Planning Many of our business plan priorities are broadly

on track to be delivered by the end of the
We made further improvements to our planning strategy. However, there are some key areas
process in 2018/19. These included: where we are facing challenges, including
■■ Creating a cross-directorate Strategic Change transforming registration, delivering our digital
Committee to oversee our change programme. programme, becoming intelligence-driven, and
The committee has prioritised the key change assessing the quality of care in a place.
programmes and projects for 2019/20. Slower than expected progress in the digital
■■ Creating a change fund for 2019/20 activity programme is having an effect on our ability to
through re-prioritising funding from improve our efficiency. Challenges with the
directorates’ budgets. programme of work to transform registration are
affecting our ability to provide useful
■■ Reviewing progress against our strategy for information to inspectors for them to make
2016 to 2021 and recommending areas of evidenced-based regulatory decisions and
further focus for 2019/20 and beyond. thereby become more intelligence driven.
■■ Using an external consultancy to support our For 2019/20 the Board has agreed 10 business
planning process, particularly around plan priorities with the Executive Team. The
prioritising our change activity, but also to majority are focused on our programme of
enhance our capability to manage major change and improvement, and the cultural
change, transformation and improvement. change needed to deliver that. The priorities that
■■ Holding cross-directorate discussions to need the most improvement are at the forefront.
encourage more joined-up planning. We are confident that our performance in
2019/20 will improve as a result.
2. Financial management, ■■ build capacity and support decision-making
systems and control by contract owners in developing, approving
and executing contracts.
Directorates have continued to improve their
focus on management of resources, working 3. Performance and risk
closely with Finance colleagues. The introduction
of a Resources Committee and a Strategic
management
Change Committee have helped to embed the
alignment of resources with our strategy. We
Performance
have also developed a five-year financial plan to We have further strengthened the quality of
make sure that our investments deliver long- performance information and our focus on
term savings. performance reporting in directorates to help us
deliver our targets. We have developed a
Contract management performance framework that organises our
performance information to show if we are:
CQC has adopted a three-tier classification
approach to contract management (gold, silver ■■ meeting our commitments
and bronze) based on the proportionate use of
■■ efficient, consistent and effective
resource, governance and process as determined
by the value and risk profile of each contract. ■■ a learning organisation.
Associated with each classification is a contract
Our performance in 2018/19 was analysed in
management toolkit – a set of tools and
this way and shared with all senior managers.
templates that drive the standards of contract
management by addressing areas including risk, As set out in the Performance report, our KPIs
mobilisation, contract handover, change control showed some performance improvements. In
and financial tracking. They enable a particular, we made substantial progress in how
standardised approach, but with the level of quickly we publish inspection reports and saw
input tailored to reflect each individual contract. improved timeliness across all sectors (page 37).
This has been achieved through an ongoing
A CQC contract management framework has also
quality improvement programme.
been developed that will act as a guide to
managing contracts. It outlines the activities that
contract managers should consider and protects
Risk management
the interests of CQC by guiding informed Our risk management framework provides a
decision-making and risk mitigation planning in strategic and operational risk register to be
the development, approval and administration of considered by the Board at quarterly intervals,
contracts. Its purpose is to: and the Executive Team more frequently,
including a twice-yearly review of our strategic
■■ define the roles, responsibilities and processes
and high-level risks.
associated with the different aspects of
contract management The risk register identifies the strategic-level
risks and higher-level operational risks that the
■■ coordinate existing polices and requirements
Board will oversee. The register sets out the
that support contract management
mitigations that are being carried out to manage
■■ ensure efficiency and effectiveness the level of each risk, and these mitigations are
throughout the life of the contract built into the directorate business plans. Progress
in delivering mitigating actions is monitored by
the Executive Team, the ACGC and the Board. We still have some inconsistent and inefficient
Directorates have risk registers associated with processes. Although we have made some
their business plans. progress, further improvements are needed.
These planned improvements are reflected in our
In July 2018, CQC identified a technical issue in
2019/20 change programme and quality
its data management system which meant that
improvement projects.
there were delays to the timely referral of some
safeguarding information to local councils, and Although our 2018 people survey score on the
some referrals were not made. An initial relevance of CQC values to our own work was
investigation identified that this issue related to very high at 91%, we know that some providers
120 concerns. Within a week of the issue being and CQC colleagues believe we are inconsistent
identified, the concerns were shared with the 56 in our ways of working. We are carrying out
local authorities affected, and action was taken projects to identify our areas of inconsistency
to correct the system and process error. CQC and to address these (see continuous
then initiated a special advisory review of its improvement section).
safeguarding alerts process conducted by the
We have made a number of improvements to
Government Internal Audit Agency (GIAA). The
support collaboration and joined-up working
independent reviewer found examples of good
across the organisation. For example, we have
practice across CQC, including in the response to
created a central fund for transformative change
this incident.

ACCOUNTABILITY RE PORT
to support collaborative use of resources. We
The Board and the Executive Team have agreed have also seen examples of better working
our risk register for 2019/20 (Performance between directorates to share resources and to
report, page 46). In 2019/20 we will improve align efficiency initiatives.
our risk management procedures in response to
an internal audit that was carried out in the year. 5. People management and
We will have more of a focus on horizon
development
scanning and work to reinforce a risk culture for
colleagues at all levels so that they have greater Our 2018 people survey results showed that
capability to identify and escalate potential risks. employees continue to be positive about a
number of areas, including the purpose of CQC’s
4. Whole organisation approach work and its strategic direction. However,
employees had ongoing frustrations with the
This is a new assurance area that we started to systems and tools they need to do their jobs,
measure ourselves against in 2018/19. Its and with the availability of appropriate learning
criteria are: and development opportunities. A number of
■■ using our people and resources collaboratively initiatives have been developed to focus on
improving the experience for people at CQC,
■■ consistent practices and application of with areas of specific focus around digital tools
processes and technology, and improving recruitment and
■■ consistent culture and behaviours. retention for people from a Black and Minority
Ethnic (BME) background. These are detailed in
We believe that we need to make improvements the performance report (pages 35 to 37).
in all three areas. During 2018/19, we
introduced a prioritisation and allocation process Initiatives to address people survey concerns
for change activity to support us to use our resulted in a number of directorates assessing
people and resources more collaboratively. improvements in their people management and
development since 2017/18.
6. Information and evidence 7. Governance and decision
management making
The framework agreement between DHSC and
Information management CQC has been updated. The updates
In 2018/19 we introduced new management predominantly reflect changes to CQC’s
assurance standards for information and oversight of Healthwatch England and the
evidence management to make sure they responsibilities relating to the National
adequately cover the latest information security Guardian’s Office. The document is currently
and governance standards. As at 31 March 2019, undergoing a final review before it is signed-off.
95.4% of colleagues had carried out the
We continued to work with DHSC’s sponsor team
mandatory information security training module,
to maintain arrangements for regular
‘CQC values information’, that must be repeated
performance reporting and review. Assurances
annually.
around the efficient and effective operation of
Healthwatch England were sought through
Evidence management CQC’s governance frameworks. These comprise
The majority of directorates reported that they regular reporting to CQC’s Board and CQC’s
had met the standards to be rated as good for ACGC, and regular accountability meetings
evidence management. In 2017/18, two between the Accounting Officer and the Chair
inspection directorates highlighted key and Chief Executive of Healthwatch England.
dependencies between performance in this area We have a scheme of delegation to ensure that
and the information management and all significant decisions are made by those who
technology that support colleagues to manage are authorised to make them. We have no
evidence. However, the directorates have seen information or evidence to suggest that during
improvements in the information culture and the year CQC has assumed duties beyond its
reported that data completion was more statutory powers, or that it has improperly
systematic in 2018/19. delegated any duties. We updated the scheme
Important improvements continued to be made twice in the year.
to our technology systems during 2018/19, as Our governance model was reviewed in 2018/19
set out in the Performance report (Priority 2 and to provide a more appropriate balance between
Priority 4). We have, however, faced challenges governance and delivery.
in delivering our digital programme and
becoming more intelligence-driven. Our work to
establish better change and improvement
8. Continuous improvement
capability is focused on these key priorities in We started to build a dedicated and specialist
our 2019/20 business plan. quality improvement team during the year, led
by the Director of Quality Improvement. An
In 2019/20 we will establish our future IT service
external quality improvement partner was
provider, and begin work lasting into 2020/21 to
procured in March 2019 to give us additional
replace our customer relationship management
expertise. There are now a range of quality
(CRM) system – a fundamental system that
improvement initiatives underway.
needs to underpin our digital architecture.
Almost half of our directorates believe that their ■■ Efficiency in inspection report publishing:
continuous improvement capabilities need to be A team of policy, inspection and other
enhanced. In general, directorates that are colleagues came together to develop a range
performing attribute their achievements to of improvements to drive up efficiency in
establishing improvement mechanisms and good writing and publishing inspection reports.
engagement with colleagues. These included: a clearer writing template, a
shorter and clearer summary, and a
We believe we are on a journey towards being a
streamlined quality assurance process. The
learning organisation. We are very supportive of
changes were tested with members of the
learning and improvement, but we need to look
public and providers. All directorates have
at how we share our learning across all teams
seen substantial improvements in the time
and sectors and improve cross-directorate
taken to publish a report, and so information
working.
on services is now available to the public much
We have many examples of continuous sooner than before. The time spent on the
improvement work. Three examples of this work writing process has also reduced, for example
in 2018/19 were: in the Adult Social Care directorate there has
been a 41% overall reduction in writing time.
■■ Regulatory risk: An investigation into the
safeguarding issues at an adult social care
service, Hill Green, resulted in further Other assurance areas

ACCOUNTABILITY RE PORT
development of the risk framework and
guidance for our people. This work was Information security and
overseen by the Risk Steering Group. governance
■■ Consistency: The wide variety of services that Information, cyber security and governance
we regulate makes consistent application of continue to be integral elements that support all
our regulatory framework across all settings other areas of CQC. Throughout 2018/19, there
fairly complex. In October 2017, the National has been ongoing improvement work through
Audit Office reported that, “Most providers CQC’s Information Governance Group, chaired by
and inspectors think that the Commission’s CQC’s Senior Information Risk Owner (SIRO).
judgements are fair but some stakeholders Updates on the work of the group are reported
have concerns about consistency.” In response to the Board and the Executive Team on a
we are holding focus groups with inspection regular basis, including significant developments
colleagues to explore what good quality or incidents that affect security and governance.
interactions between CQC and providers look The Board was also given an annual cyber
like. We have also started to explore this with security briefing and training session in February
providers of care. Insight from these activities 2019 with support from NHS Digital.
will then need to be used to inform
recruitment, induction, training and guidance. During 2018/19, significant work took place to
We are drawing together existing initiatives make sure that CQC is compliant with the
across CQC that have led to tangible benefits. General Data Protection Regulation (GDPR) and
We now need to look at how to scale up those the Data Protection Act 2018. This new
initiatives that have improved consistency in legislation came into force in May 2018. The
one sector or region to make sure consistency work has included the appointment of a Data
spreads across CQC. In addition, we are Protection Officer (DPO) who joined the
developing a range of methods to track levels Information Governance Group and chairs the
of consistency. working group. Work is ongoing to review and
strengthen compliance with data protection fraud team to make sure that CQC processes are
legislation. aligned with those of the department and other
arms-length bodies. These discussions have
An annual campaign, ‘CQC values information
resulted in CQC receiving regular fraud bulletins
month’, took place in November 2018. The
and updates.
campaign was designed to promote and improve
the security culture in CQC, as well as raise
awareness updates on topical issues. Security Conclusion
incident analysis and response was carried out in
Our management assurance assessment process
2018/19 and reported to the SIRO and the
is an essential method for driving improvement
ACGC. The number of incidents reported and
in the eight areas of management responsibility,
investigated during the year was consistent with
and for giving assurance as to how CQC manages
that of previous years and were low-level where
and governs itself. Viewed alongside evidence
no harm or distress was caused. There were three
from our KPIs, evaluation activity and strategic
incidents that were reported to the Information
measures of success, we have a good picture of
Commissioner’s Office. These were not
where we need to improve and a way of
significant incidents but were required to be
evidencing progress, to meet our business plan
reported under GDPR.
commitments.
We continued to liaise with DHSC, NHS England,
NHS Digital and the Information Commissioner’s
Office on matters of information security and
Head of Internal Audit
privacy. Opinion
CQC’s Information Governance risk register is My overall opinion, consistent with that given in
regularly reviewed at meetings of the 2017/18, is that I can give to the Accounting
Information Governance Group, which continues Officer of the Care Quality Commission for the
to monitor the risks and our mitigating actions. reporting year 2018/19 MODERATE assurance
We completed the baseline return for the data that there are adequate and effective systems of
security and protection toolkit, coordinated by governance, risk management and control. This
NHS Digital. We also submitted our full annual opinion should be read in the context of the
return for the toolkit with a fully compliant background and further details given in this
submission. report.
We have completed 18 reviews during 2018/19.
Anti-corruption and anti-fraud Of the reviews for which formal ratings have
matters been issued, 1 (8%) was rated substantial, 10
The Director of Governance and Legal Services (84%) were rated moderate and 1 (8%) was
leads CQC’s counter fraud function. The number rated limited [prior year 2 (14%) were rated
of allegations of fraud received during 2018/19 substantial, 10 (72%) were rated moderate and
was very low, in line with previous years, with six 2 (14%) were rated limited].
cases reported and investigated. These cases We would like to take this opportunity to thank
contained allegations of corruption or conflict of all of those who have assisted us during the
interest but, following thorough investigation, course of this year’s internal audit programme.
none have been found to be substantiated. CQC has taken a positive approach to the value
Twice-yearly summary reports are presented to of internal audit and to implementation of
the ACGC for their information and comment. agreed actions where required in response to
Discussions took place with the DHSC counter- recommendations
My opinion is based on the following PSIAS. We supplemented this with a short
information: assessment by the National Audit Office in
2016/17. Every year, we undertake regular
■■ Outcomes of the engagements on the
internal quality review exercises. Broadly, each
2018/19 internal audit plan; and
exercise has been satisfied with the quality of
■■ Cumulative knowledge gained from our findings and reports, and recognised
attendance at management committees; improvements in how we document and
access to risk registers and key evidence our work. We continue to strive for
documentation; and discussions with improvement and implemented a new audit
management. methodology and audit management system on
1 April 2018 to ensure we apply best practice
Scope of report consistently across our work.

This report covers the period 1 April 2018 to 31

March 2019.
Themes of work
Governance
Purpose of the annual opinion
Management updated governance structures in
The Public Sector Internal Audit Standards 2018, establishing the Strategic Change and
(PSIAS) require me, as Group Chief Internal

ACCOUNTABILITY RE PORT
Resources committees to oversee the change
Auditor, to deliver an annual internal audit agenda and deployment of resources. Our
opinion and report. The annual internal audit review of these new arrangements showed that
opinion must conclude on the overall adequacy they are delivering a more devolved decision-
and effectiveness of the organisation’s making environment and releasing the time of
framework of governance, risk management and the Executive Team to focus on key issues,
control. My opinion is a key element of the although there is scope for further development.
assurance framework and can be used to inform An ACGC Transformation Sub-Group has also
the organisation’s governance statement. My recently been established to provide greater
opinion is not absolute, and is a reflection of the scrutiny of that area of activity.
evidence available. My opinion does not detract
from the Accounting Officer’s personal The business planning process was subject to
responsibility for risk management, governance amendment during the year to better meet
and control processes. business needs, including in relation to cost-
efficiency. Our review suggested there remained
Compliance with standards an opportunity to apply a longer-term horizon to
planning for cost savings.
The Government Internal Audit Agency (GIAA)
has conducted its work throughout 2018/19 in The management assurance-self-assessment
compliance with PSIAS. A copy of PSIAS is process remains an important component of the
available on request. focus on governance, risk and controls. We
continue to see the adoption and commitment
to this within CQC as good practice.
Quality assurance and
improvement Risk management
GIAA was subject to an External Quality CQC continues to have a clear focus on the
Assessment in 2015/16, which confirmed that it identification and management of risk,
‘generally conforms’ to the requirements of the particularly at ACGC and Board. Our review of
risk management at lower levels concluded that the existing systems, not least the need to
these provided moderate assurance, but capture receipts separately from the electronic
identified opportunities to enhance mechanisms claims.
for escalation of risks. Our work on safeguarding
also identified weaknesses in escalation of issues Programmes and projects
historically, suggesting this as an area for more
There is a major programme of change
focus going forward.
underway, which includes significant
In general, there continues to be a strong focus development of digital and IT capability. During
on delivering change and improvement, and the year, the programme was paused to reflect
taking action to mitigate risks. This includes on prioritisation of projects and while capacity
action in response to audit findings. The planned and capability to deliver the programme was
development of the portfolio management office increased. Schemes including an updated
and quality improvement functions in 2019/20 registration programme and major updating of
will support this. the IT infrastructure are now underway.
Increased capacity and capability to deliver the
Control
change projects has been supported by the
We have issued 18 (17/18: 18) reports since our strategic focus on outcomes and prioritisation
last annual report, all of which addressed key aligned to capacity. In addition, steps have been
aspects of the systems of internal control. taken to increase the experience in the IT team
of using the agile project delivery approach.
In prior years we drew attention to the theme of
There remain, however, a number of areas where
IT systems, which is being taken forward through
processes supporting successful outcomes are
a number of change programmes and projects,
still in development. These include measures to
which we comment on separately.
support benefit realisation measurement and
Early in 2018/19 we issued a limited rated report templates for programme level reporting. In
on actions designed to improve the timeliness of addition, a comprehensive agile project control
the publication of inspection reports. Following planning/governance process needs to be
work by management and a focus by the ACGC defined and implemented.
and Board, we were pleased to note improved
Given the scale of the change programme and
publication timeliness as shown in performance
while recognising the improvements made in
reporting.
2018/19, the further development of these
Work on GDPR evidenced the focus that has areas will remain a priority for 2019/20.
gone into compliance with the new legislation,
and we found business continuity processes to
be strong. Other reviews, including procurement Jane Forbes
and enforcement, concluded controls provide Head of Internal Audit
moderate assurance, but with a number of
opportunities for improvement.
Our review of processes for expenses payments
to staff confirmed that improvements
implemented in previous years have been
maintained, but that efficiency could be
enhanced but is subject to some limitations of
Accounting Officer’s The Head of Internal Audit has provided an
annual opinion providing moderate assurance
Conclusion that there are adequate and effective systems of
CQC has continued to ensure that robust governance, risk management and control.
mechanisms are in place to assess risk and I agree with their conclusion.
compliance, with regular review at the Board and
the ACGC. CQC has complied with HM Treasury’s Corporate
Governance in Central Government Department’s
Our transformation programme encompasses a Code of Good Practice to the extent that they
number of initiatives across registration, our apply to a non-departmental public body.
regulatory model, and digital strategy. Work has
taken place to scope, plan and resource this I conclude that CQC’s governance and assurance
portfolio of work. Progress has been made in processes have supported me in discharging my
ensuring that the right processes and structures role as Accounting Officer. I am not aware of any
are in place that will enable effective significant internal control problems in 2018/19.
management of the overall portfolio. Work will continue in 2019/20 to maintain and
strengthen the assurance and overall internal
In previous years, technology has been identified control environment in CQC.
as an area where improvement was needed, and
work continues on our digital capabilities as part

ACCOUNTABILITY RE PORT
of the wider transformation programme. The
Future IT Services programme is the cornerstone
of work to offer high-quality desktop services.
This work includes re-procurement of contracts
to replace the current desktop and file storage
capabilities. It will also establish a new operating
model for our digital operations which will seek
to maintain reliability and security while
improving cost effectiveness. Some smaller but
important elements have already been delivered
and the appointment of the Chief Digital Officer
is key to ensuring ongoing delivery.
This programme is expected to improve overall
performance and productivity of the whole
organisation.
The scope and nature of work outlined above
means that 2018/19 has been a significant and
challenging year for CQC and, as this multi-year
piece of work continues, we will continue to face
further challenges. The Board will continue to
maintain oversight of the programme of work,
through the scrutiny of the ACGC and its newly
established sub-group, which will look in more
detail at the range of transformation activity
taking place.
Remuneration and people report

Remuneration Social Care (DHSC) based on a commitment of

two to three days per month.

report There are no provisions in place to compensate

for the early termination or the payment of a
bonus in respect of non-executive Board
This section provides details of the remuneration members.
(including any non-cash remuneration) and
pension interests of Board members, The Chairman, non-executive Board and
independent members, the Chief Executive and independent members are reimbursed for the
the Executive Team. The content of the tables cost of travelling to Board meetings and to
and fair pay disclosures are subject to audit. other events at which they represent CQC.
The resultant tax liability is met by CQC under a
Remuneration of the Chair settlement agreement with HM Revenue and
Customs (HMRC) and for 2018/19 this
and non-executive Board amounted to £12k (2017/18: £11k).
members
Non-executive Board members’ remuneration is
determined by the Department of Health and

Chairman and non-executive Board members’ emoluments (subject to audit)

Benefits Benefits
Salary in kind Salary in kind Restated
(bands (taxable 2018/19 (bands (taxable 2017/18
of to nearest total of to nearest total
Date £5,000) £100) salary £5,000) £100) salary5

appointed £000 £ £000 £000 £ £000

Peter Wyman CBE DL (Chair) 4 Jan 2016 60–65 8,800 70–75 60–65 11,500 70–75
Prof. Louis Appleby CBE 1 Jul 2013 5–10 3,600 10–15 5–10 2,100 5–10
Prof. Paul Corrigan CBE 1 Jul 2013 5–10 – 5–10 5–10 200 5–10
Sir Robert Francis QC 1 Jul 2014 20–251 600 20–25 10–15 – 10–15
Paul Rew 1 Jul 2014 10–15 – 10–15 10–15 800 10–15
Jora Gill 1 Nov 2016 5–10 3,000 10–15 5–10 4,000 10–15
Sir John Oldham OBE 1 Jan 2018 5–10 1,700 5–10 0–53 200 0–5
Liz Sayce OBE 1 Jan 2018 5–10 1,900 5–10 0–53 500 0–5
Mark Saxton 1 Mar 2018 5–10 4,700 10–15 0–53 – 0–5
Jane Mordue 19 Dec 2015 15–202 1,400 15–20 30–35 4,200 30–35
Michael Mire 1 Jul 2013 – – – 0–54 – 0–5
1
Sir Robert Francis was appointed as Chair of Healthwatch England on 1 October 2018, full-year equivalent salary
£30-35k. Before this appointment he was a non-executive member of the Board, full-year equivalent salary £10-15k.
2
Jane Mordue resigned on 30 September 2018. Full-year equivalent salary would be £30-35k.
3
Full-year equivalent salary would be £5-10k.
4
Michael Mire’s appointment expired on 30 June 2017. Full-year equivalent salary would be £5-10k.
5
The prior year comparator has been updated to include benefits in kind.
Payments to independent For the Chief Executive and Executive Team,
early termination, other than for gross
members misconduct (in which no termination payments
Linda Farrant is an independent member of the are made), is covered by their contractual
ACGC. Fees and expenses were paid on a per entitlement under CQC’s redundancy policy (or
meeting basis and during 2018/19 amounted to their previous legacy Commission’s redundancy
£5k (2017/18: £3k). policy if they transferred). The Executive Team
has three months’ notice of termination in their
contracts. Termination payments are only made
Remuneration of the Chief in appropriate circumstances and may arise when
Executive the employee is not required to work their
period of notice. They may also be able to access
The Chief Executive’s remuneration is agreed by the NHS Pension Scheme arrangements for early
the Board via the Remuneration Committee with retirement depending on age and scheme
reference to DHSC’s guidance on pay for its membership. Any amounts disclosed as
arm’s length bodies. compensation for loss of office are also included
in the People report (page 81).
Remuneration of the Salary includes gross salary, overtime,
Executive Team recruitment and retention allowances and any

ACCOUNTABILITY RE PORT
other allowance to the extent that it is subject to
The Executive Team are employed on CQC’s UK taxation. It does not include employer
terms and conditions under permanent pension contributions and the cash equivalent
employment contracts. transfer value of pensions.
The remuneration of the Chief Executive and the No performance pay, bonus or compensation for
Executive Team members was set by the loss of office were paid to any member of the
Remuneration Committee and is reviewed Executive Team, or former members, during
annually within the scope of the national pay 2018/19.
and grading scale applicable to arm’s length
bodies.
Remuneration of the Executive Team (subject to audit)
2018/19 2017/18
Benefits All Benefits All
in kind pension in kind pension
(taxable) related (taxable) related
Salary to benefits Total Salary to benefits Total
(bands of nearest (bands of (bands of (bands of nearest (bands of (bands of
£5,000) £100 £2,500)1 £5,000) £5,000) £100 £2,500)1 £5,000)
£000 £ £000 £000 £000 £ £000 £000
Ian Trenholm 130–
1,500 67.5–70 200–205 – – – –
Chief Executive 1352
Sir David Behan CBE 55–603 – –8 55–60 185–190 – –8 185–190
Chief Executive
Prof. Steve Field CBE 175–
Chief Inspector of – –9 175–180 160–165 – –9 160–165
General Practice 1804
Dr Malte Gerhold
Director of Strategy and 105–110 – 12.5–15 120–125 135–140 – 30–32.5 170–175
Intelligence
Prof. Edward Baker
– 120– – –9 120–125
Chief Inspector of Hospitals 180–185 –9 180–185
12510
Kirsty Shaw 140–145 7,300 32.5–35 180–185 10–1511 – – 10–15
Chief Operating Officer
Deborah Westhead
Chief Inspector of Adult 40–455 – 17.5–20 60–65 – – – –
Social Care
Dr Rosie Benneyworth
Chief Inspector of Primary 10–156 – 0–2.5 10–15 – – –
Medical Services and
–
Integrated Care
Andrea Sutcliffe CBE 115–
Chief Inspector of Adult – 0–2.5 115–120 145–150 – 20–22.5 165–170
Social Care
1207
Prof. Sir Mike Richards – – – – 85–9012 – –9 85–90
Chief Inspector of Hospitals
Eileen Milner
Director of Customer & – – – – 85–9013 – 27.5–30 115-120
Corporate Services

1
All pension-related benefits calculated as the real increase in pension multiplied by 20 plus the real increase in any lump
sum less the contributions made by the individual. The real increase excludes increases due to inflation or any increases
or decreases due to a transfer of pension rights.
2
Ian Trenholm was appointed on 30 July 2018, full-year equivalent salary £195-200k.
3
Sir David Behan CBE left CQC on 11 July 2018, full-year equivalent salary £185-190k.
4
Prof. Steve Field CBE left CQC on 31 March 2019, full-year equivalent salary £175-180k.
5
Deborah Westhead was an interim appointment from 3 December 2018, full-year equivalent salary £130-135k.
6
Dr. Rosie Benneyworth was appointed on 4 March 2019, full-year equivalent salary £160-165k.
7
Andrea Sutcliffe CBE left CQC on 13 January 2019, full-year equivalent salary £145-150k.
8
Sir David Behan CBE chose not to be covered by the NHS Pension Scheme during the reporting year.
9
Pension-related benefits for Prof. Steve Field CBE, Prof. Edward Baker and Prof. Sir Mike Richards are £nil as all were in
receipt of benefits.
10
Prof. Edward Baker was appointed on 31 July 2017, full-year equivalent salary £180-185k.
11
Kirsty Shaw was appointed on 1 March 2018, full-year equivalent salary £140-145k.
12
Prof. Sir Mike Richards left CQC on 11 August 2017, full-year equivalent salary £235-240k.
13
Eileen Milner left CQC on 31 October 2017, full-year equivalent salary £140-145k.
Fair Pay (subject to audit) Amounts payable to third
Reporting bodies are required to disclose the parties for services as a
relationship between the remuneration of the
highest paid director in their organisation and
senior executive
the median remuneration of the organisation’s No amounts were paid to third parties for
employees. services as a senior executive during 2018/19
(2017/18: £nil).
The annualised banded remuneration of the
highest paid director in CQC during 2018/19 was
£195-200k (2017/18: £235-240k). This was 5.1 Pension benefits
times (2017/18: 6.2) the median remuneration
of CQC’s employees, which was £39,029 Pension benefits of non-
(2017/18: £38,452). executive Board members
In 2018/19 two employees (2017/18: no Non-executive Board members are not eligible
employees) received annualised remuneration in for pension contributions or performance-related
excess of the highest paid director. The pay as a result of their employment with CQC.
calculation is based on the full-time equivalent
employees of the reporting entity at the
Pension benefits of the Chief

ACCOUNTABILITY RE PORT
reporting period end date on an annualised
basis. Remuneration ranged from £15-20k to Executive and Executive Team
£195-200k (2017/18: £15-20k to £235-240k). Pension benefits were provided through the NHS
Total remuneration includes salary, non- Pension Scheme or local government pension
consolidated performance-related pay, and scheme (LGPS) for members of the Executive
benefits in kind but not severance payments. It Team who chose to contribute. Pension benefits
does not include employer pension contributions at 31 March 2019 may include amounts
and the cash equivalent transfer value of transferred from previous employment, while the
pensions. The 2018/19 pay award ensured that real increase reflects only the proportion of the
all employees are paid a salary that is at least in time in post if the employee was not employed
line with the national living wage. by CQC for the whole year.

Payments made for loss of

office
There were no payments made to any member of
the Executive Team, or former members, for loss
of office during 2018/19 (2017/18: £nil).
Pension benefits of the Chief Executive and Executive Team (subject to audit)
Lump sum
Real Real Total at age 60
increase increase accrued related to Restated
in in pension at accrued cash Cash Real
pension pension age 60 at pension at equivalent equivalent increase Employers
at age 60 lump sum 31 March 31 March transfer transfer in cash contribution
(bands at age 60 2019 2019 value at value at equivalent to
of (bands of (bands of (bands of 1 April 31 March transfer stakeholder
£2,500) £2,500) £5,000) £5,000) 20189 2019 value pensions
£000 £000 £000 £000 £000 £000 £000 £000
Ian Trenholm1 2.5–5 – 90–95 –8 1,066 1,339 143 –
Chief Executive
Sir David
Behan CBE2 –6 –6 –6 –6 –6 –6 –6 –6
Chief Executive
Prof. Steve
Field CBE –7 –7 –7 –7 –7 –7 –7 –7
Chief Inspector of
General Practice
Dr Malte
Gerhold
Director of 0–2.5 – 10–15 –8 93 142 30 –
Strategy and
Intelligence
Prof. Edward
Baker –7 –7 –7 –7 –7 –7 –7 –7
Chief Inspector of
Hospitals
Kirsty Shaw
Chief Operating 2.5–5 – 0–5 –8 2 33 11 –
Officer
Deborah
Westhead3 0–2.5 2.5–5 50–55 110–115 800 1,005 47 –
Chief Inspector of
Adult Social Care
Dr Rosie
Benneyworth4
Chief Inspector of 0–2.5 (2.5)–0 10–15 20–25 143 195 2 –
Primary Medical
Services and
Integrated Care
Andrea
Sutcliffe5 CBE 0–2.5 (2.5)–0 30–35 85–90 591 682 41 –
Chief Inspector of
Adult Social Care

1
Ian Trenholm was appointed on 30 July 2018.
2
Sir David Behan CBE left CQC on 11 July 2018.
3
Deborah Westhead was an interim appointment from 3 December 2018.
4
Dr. Rosie Benneyworth was appointed on 4 March 2019.
5
Andrea Sutcliffe CBE left CQC on 13 January 2019.
6
Sir David Behan CBE chose not to be covered by the NHS Pension Scheme during the reporting year.
7
Pension benefits of Prof. Steve Field CBE and Prof. Edward Baker are £nil as both members are in receipt of benefits.
8
Lump sum is zero as member is in the 2008 section of the scheme.
9
Cash equivalent transfer value restated in accordance with disclosures provided by the NHS Pension Scheme.
Cash equivalent transfer Automatic enrolment
values The Pensions Act 2008 introduced measures
aimed at encouraging greater private saving by
A cash equivalent transfer value (CETV) is the
making changes to workplace pensions. From 1
actuarially assessed capitalised value of the
August 2013, all CQC employees entitled to be
pension scheme benefits accrued by a member
enrolled into a workplace pension were
at a particular point in time. The benefits valued
automatically enrolled, or from their start date if
are the member’s accrued benefits and any
later than this date. All employees enrolled into a
contingent spouse’s pension payable from the
workplace pension retain the option to opt out
scheme. A CETV is a payment made by a pension
at any time.
scheme or arrangement to secure pension
benefits in another pension scheme or Automatic enrolment applies to all employees
arrangement when the member leaves a scheme defined as a worker under the new legislation.
and chooses to transfer the benefits accrued in This applies to all employees under a normal
their former scheme. The pension figures shown contract of employment with CQC as well as
relate to the benefits that the individual has Mental Health Act Reviewers, Second Opinion
accrued as a consequence of their total Appointed Doctors (SOADs) and all employees
membership of the pension scheme, not just on casual or zero-hour contracts. The new rules
their service in a senior capacity to which the do not apply to honorary appointments, such as

ACCOUNTABILITY RE PORT
disclosures apply. the Chair and Board members, agency workers,
Experts by Experience or employees seconded in
The CETV figures, and from 2004/05 the other
from other organisations.
pension details, include the value of any pension
benefit in another scheme or arrangement that CQC operates the NHS Pension Scheme for
the individual has transferred to the NHS automatic enrolment, as this is the principal
pension scheme. They also include any pension scheme for employees recruited directly
additional pension benefit accrued to the by CQC. Those not eligible to join the NHS
member as a result of them purchasing Pension Scheme are enrolled with the National
additional years of pension service in the scheme Employment Savings Trust.
at their own cost. CETVs are calculated within
the guidelines and framework prescribed by the
Institute and Faculty of Actuaries and do not
NHS Pension Scheme
take account of any potential reduction to The principal pension scheme for employees
benefits resulting from Lifetime Allowance Tax recruited directly by CQC is the NHS Pension
which may be due when pension benefits are Scheme.
drawn.
Past and present employees are covered by the
provisions of the two NHS Pension Schemes.
Real increase in CETV Details of the benefits payable and rules of the
schemes can be found on the NHS Pensions
This reflects the increase in CETV effectively
website: www.nhsbsa.nhs.uk/pensions. Both are
funded by the employer. It does not include the
unfunded defined benefit schemes that cover
increase in accrued pension due to inflation or
NHS employers, GP practices and other bodies,
contributions paid by the employee (including
allowed under the direction of the Secretary of
the value of any benefits transferred from
State for Health in England and Wales. They are
another pension scheme or arrangement).
not designed to be run in a way that would
enable NHS bodies to identify their share of the
underlying scheme assets and liabilities. b) Full actuarial (funding)
Therefore, each scheme is accounted for as if it valuation
were a defined contribution scheme: the cost to
the NHS body of participating in each scheme is The purpose of this valuation is to assess the
taken as equal to the contributions payable to level of liability in respect of the benefits due
that scheme for the accounting period. under the schemes (taking into account recent
demographic experience) and to recommend
In order that the defined benefit obligations contribution rates payable by employees and
recognised in the financial statements do not employers.
differ materially from those that would be
determined at the reporting date by a formal The latest actuarial valuation undertaken for the
actuarial valuation, the FReM requires that “the NHS Pension Scheme was completed as at 31
period between formal valuations shall be four March 2016. The results of this valuation set the
years, with approximate assessments in employer contribution rate payable from April
intervening years.” An outline of these follows: 2019. DHSC have recently laid scheme
regulations confirming that the employer
a) Accounting valuation contribution rate will increase to 20.6% of
pensionable pay from this date.
A valuation of scheme liability is carried out
annually by the scheme actuary (currently the The 2016 funding valuation was also expected
Government Actuary’s Department) as at the to test the cost of the scheme relative to the
end of the reporting period. This uses an employer cost cap set following the 2012
actuarial assessment for the previous accounting valuation. Following a judgement from the Court
period in conjunction with updated membership of Appeal in December 2018, the government
and financial data for the current reporting announced a pause to that part of the valuation
period, and is accepted as providing suitably process pending conclusion of the continuing
robust figures for financial reporting purposes. legal process.
The valuation of the scheme liability as at 31 In 2018/19, CQC’s employer contribution for
March 2019 is based on valuation data as at 31 employees in the NHS Pension Scheme was
March 2018, updated to 31 March 2019 with £13,954k (2017/18: £13,103k) at a rate of
summary global member and accounting data. In 14.38% (2017/18: 14.4%). From 1 April 2017,
undertaking this actuarial assessment, the DHSC introduced a charge to cover the cost of
methodology prescribed in IAS 19, relevant scheme administration. This administration
FReM interpretations, and the discount rate charge equates to 0.08% of each active
prescribed by HM Treasury have also been used. member’s pensionable pay.
The latest assessment of the liabilities of the For early retirements, other than those due to ill
scheme is contained in the report of the scheme health, the additional pension liabilities are not
actuary, which forms part of the annual NHS funded by the scheme. The full amount of the
Pension Scheme Accounts. These accounts can liability for the additional costs charged to
be viewed on the NHS Pensions website and are expenditure was £62k (2017/18: £56k).
published annually. Copies can also be obtained
from The Stationery Office.
Local government pension National Employment
schemes Savings Trust
The LGPS changed from a final salary to career The National Employment Savings Trust is a
average basis from 1 April 2014 and is open qualifying pension scheme established by law to
primarily to employees of local government, but support the introduction of automatic enrolment
also to those who work in other organisations from 1 August 2013.
associated with local government. It is also a
Employer contributions based on a percentage
funded scheme with its pension funds being
of payroll costs totalled £44k for 2018/19
managed and invested locally within the
(2017/18: £25k) at a rate of 2% (2017/18:
framework of regulations provided by
1%).
government.
Due to legacy arrangements, CQC initially
inherited 17 local government schemes. All of
these schemes are closed to new CQC
employees. Under the projected unit method,
the current service cost will increase as the
members of the scheme approach retirement.

ACCOUNTABILITY RE PORT
Employer contributions for 2018/19, based on a
percentage of payroll costs only, were £3,212k
(2017/18: £3,602k), at rates ranging between
0% and 41.6% (2017/18: 0% and 41.6%).
Employer contributions relating to the largest
scheme, Teesside Pension Fund, were £2,788k
(2017/18: £3,137k) at a rate of 17.9%
(2017/18: 17.9%).
During 2018/19, an indexed cash sum was
levied in addition to a percentage of payroll
costs in an effort to reduce the pension fund
deficits. In total, £1,801k (2017/18: £1,671k)
was paid to 12 of the 16 remaining pension
funds with amounts ranging from £27k to
£632k. No additional sums were paid to Teesside
as it currently has sufficient employee members
to enable the deficit to be recovered solely by a
percentage of payroll, as well as having members
who are of an age that allows the deficit to be
recovered over a longer period of time
Contribution rates for 2019/20 range between
0.0% and 41.6% (17.9% for Teesside Pension
Fund), with annual cash sums ranging from £28k
to £652k (£nil for Teesside).
People report
The information presented in notes 1 and 10 are subject to audit.

1. Employee costs and numbers

1.1 Employee costs
Permanently 2018/19 2017/18
employed Others total total
£000 £000 £000 £000
Wages and salaries 128,178 11,290 139,468 133,760
Social security costs 13,942 565 14,507 14,152
NHS pension costs 13,771 183 13,954 13,103
LGPS pension costs 5,014 – 5,014 5,273
Other pension costs 27 17 44 25
Apprenticeship levy 671 – 671 646
Termination benefits 750 – 750 1,801
Sub–total 162,353 12,055 174,408 168,760
Less recoveries in respect of outward (1,034) – (1,034) (682)
secondments
Increase in provision for pension fund 621 – 621 1,098
deficits
Total net cost 161,940 12,055 173,995 169,176

Other employee costs consist of:

2018/19 2017/18
total total
£000 £000
Bank inspectors and specialist advisors 7,218 6,602
SOADs 3,377 3,359
Inward secondments from other organisations 1,071 1,399
Commissioners 47 181
Agency 342 235
Total 12,055 11,776

No employee costs were capitalised during the year (2017/18: £nil).

1.2 Average number of whole-time employees during the year:
The average number of whole-time equivalent persons employed during the year was:
2018/19 2017/18
Directly employed 3,025 3,091
Other 15 18
Employees engaged on capital projects – –
Total 3,040 3,109

‘Other’ does not include bank inspectors, specialist advisors or SOADs who are paid per session.
The actual number of directly employed whole-time equivalents as at 31 March 2019 was 3,210 (31
March 2018; 3,193).

2. Employee composition
The table below shows the gender breakdown of CQC.
Board Board
members 31 March members 31 March

ACCOUNTABILITY RE PORT
and 2019 and 2018
Executive Other total Executive Other total
Directors Directors employees employees Directors Directors employees employees
Male 12 9 985 1,006 11 6 982 999
Female 4 18 2,313 2,335 5 19 2,297 2,321

3. Gender pay gap

The gender pay gap gives a snapshot of the gender balance in an organisation. It measures the
difference between the average earnings of all male and female employees, irrespective of their role or
seniority.
As at 31 March 2019 the gender split in CQC was 69.7% female employees to 30.3% male employees
and this was closely replicated across the quartile data. The data shows that there is no gender pay
gap at CQC as employees are paid within salary bands and the mean and median hourly rate of pay are
virtually the same across all quartiles. This remains similar to 31 March 2018.
No data is included in CQC’s gender pay gap reporting for bonuses as CQC does not pay performance-
related bonuses.
Mean pay gap – ordinary pay 1.00%
Median pay gap – ordinary pay -0.99%
Mean pay gap – bonus pay in the 12 months to 31 March 2019 n/a
Median pay gap – bonus pay in the 12 months to 31 March 2019 n/a
The proportion of male and female employees paid a bonus Male n/a
in the 12 months to 31 March 2019 Female n/a
Proportion of male and female employees in each quartile:
Quartile Female Male
First (lower) quartile 64.4% 35.6%
Second quartile 72.6% 27.4%
Third quartile 74.1% 25.9%
Fourth (upper) quartile 66.9% 33.1%

4. Sickness absence data

During 2018/19, the average number of long-term days of sickness per absent employee was
11 (2017/18: 10 days) and the average number of short-term days of sickness was six (2017/18:
five days).

5. Trade union facility time

5.1 Relevant union officials
Number of employees who were relevant union officials during the Full-time equivalent
relevant period employee number
41 40.2

5.2 Percentage of time spent on facility time

Percentage of time Number of employees
0% –
1–50% 41
51–99% –
100% –

5.3 Percentage of pay bill spent on facility time

Total cost of facility time £59,000
Total pay bill £172,987,000
Percentage of the total pay bill spent on facility time, calculated as: 0.03%
(total cost of facility time ÷ total pay bill) x 100

5.4 Paid trade union activities

Time spent on paid trade union activities as a percentage of total paid facility time hours 37.63%
calculated as:
(total hours spent on paid trade union activities by relevant union officials during the relevant
period ÷ total paid facility time hours) x 100
6. People policies and engagement
CQC’s people are involved in a wide range of consultation and engagement on policies on areas such
as organisational change and future strategic direction, to make sure all views are heard.
We recognise UNISON, the Royal College of Nurses, the Public and Commercial Services Union (PCS),
Unite and Prospect for the purposes of collective bargaining and consultation. Representatives from
across the unions make up CQC’s Joint Negotiation and Consultation Committee (JNCC). CQC’s
management collaborates with the JNCC on a range of issues affecting employees. In 2018/19 this
included a review of local people survey action plans; health, safety and wellbeing; and facilities and
office management.
We also have a forum that represents the voices of all people in the organisation (the staff forum).
Representatives come together to update the management team on the views of colleagues.
We regularly review our people management policies to make sure they meet best practice guidelines,
reflect changes to the culture of CQC and enable us to support all colleagues to develop. We make
sure that they are inclusive for people with different protected equality characteristics. In our reviews
we always consult with representatives from the People directorate, the unions, the staff forum and
the equality and diversity networks. During the year we agreed an allocation of protected time for the
Chair and Vice Chair of each equality network to spend on network activities.

ACCOUNTABILITY RE PORT
Information on our equality networks and further detail on our work to strengthen equality, diversity
and inclusion at CQC, and to support all colleagues to be themselves and give of their best can be
found in the Performance report (pages 36 to 37).

7. Health and safety

We have invested time during the year to make sure that our approach to Health and Safety meets
legislative requirements and supports colleagues to stay safe at work.
Our main focus has been personal safety and making sure we have robust systems in place to identify
potential hazards, support lone working and record any incidents of violence or aggression towards
CQC employees, as well as clear messaging around our zero tolerance approach. We have procured a
personal safety monitoring 24-hour support system for lone colleagues carrying out high-risk visits
and inspections. We have also provided advice and guidance for colleagues who have experienced
harassment, threats or libellous statements on social media.
We have invested in training and we have developed a new course on health and safety awareness. We
have also procured a new course on workstation safety and safe driving that is mandatory for all
employees who use IT equipment or drive for work.
CQC’s Health, Safety and Wellbeing Committee met four times during the year and approved several
health and safety codes of practice, reviewed progress of the flu vaccination programme, and
considered reports on internal assurance audits. The committee also monitored reports of accidents
and incidents to employees which, during 2018/19, comprised 59 minor accidents and incidents and
four reportable incidents (under the Reporting of Injuries, Diseases and Dangerous Occurrences
(RIDDOR) Regulations). This was an increase compared with 2017/18 following a concerted effort to
raise awareness and encourage the reporting of accidents, incidents and near misses.
8. Expenditure on consultancy
CQC spent a total of £293k on consultancy services during 2018/19 (2017/18: £714k) to support our
change and transformation programme.

9. Off-payroll engagements
For all off-payroll engagements at 31 March 2019, for more than £245 per day and that last longer
than six months:.
Number
Number of existing engagements as of 31 March 2019 1
Of which:
Number that have existed for less than one year at the time of reporting –
Number that have existed for between one and two years at the time of reporting 1
Number that have existed for between two and three years at the time of reporting –
Number that have existed for between three and four years at the time of reporting –
Number that have existed for four or more years at the time of reporting –

All existing arrangements as at 31 March 2019 have received approval from DHSC.
Assurance that the right amount of income tax and national insurance is being paid has been received
from the individual engaged off-payroll at 31 March 2019.
For all new off-payroll engagements, or those that reached six months in duration, between 1 April
2018 and 31 March 2019, for more than £245 per day and that lasted for longer than six months:
Number
Number of new engagements, or those that reach six months in duration between 1 April 2018 and 1
31 March 2019
Of which:
Number assessed as caught by IR35 1
Number assessed as not caught by IR35 –

 umber engaged directly (via a Personal Service Company contracted to the entity) and who are
N –
on the entity’s payroll
Number of engagements reassessed for consistency or assurance purposes during the year –
Number of engagements that saw a change to IR35 status following the consistency review –

Number
Number of off-payroll engagements of Board members and/or senior officials with significant –
financial responsibility during the year
Number of individuals on payroll and off-payroll that have been deemed Board members, and/or 22
senior officials with significant financial responsibilities during the financial year.
10. Exit packages
Number of Cost of
departures special
where payment
Number of Cost of Number Cost of Total special element
compulsory compulsory of other other number Total cost payments included
redund- redund- departures departures of exit of exit have been in exit
ancies ancies agreed agreed packages packages made packages
Exit package
cost band Number £s Number £ Number £ Number £
Less than £10,000 12 52,041 – – 12 52,041 – –
£10,000 to £25,000 8 128,851 – – 8 128,851 – –
£25,001 to £50,000 5 192,876 – – 5 192,876 – –
£50,001 to £100,000 3 246,543 – – 3 246,543 – –
£100,001 to £150,000 – – – – – – – –
£150,001 to £200,000 1 186,298 – – 1 186,298 – –
More than £200,000 – – – – – – – –
Total 29 806,609 – – 29 806,609 – –

Redundancy and other departure costs have been paid in accordance with CQC’s terms and conditions

ACCOUNTABILITY RE PORT
following approval by DHSC’s Governance and Assurance Committee. Exit costs are accounted for in
full in the year of departure. Where early retirements have been agreed, the additional costs are met
by CQC and not by the individual pension scheme. Ill-health retirement costs are met by the pension
scheme and are not included in the table.
Agreements Total
number value of
agreements
£000
Voluntary redundancies including early retirement contractual costs – –
Mutually agreed resignations (MARS) contractual costs – –
Early retirements in the efficiency of service contractual costs – –
Contractual payments in lieu of notice – –
Exit payments following employment tribunals or court orders – –
Non-contractual payments requiring HM Treasury approval – –
Total – –

No non-contractual payments (£nil) were made to individuals where the payment value was more than
12 months of their annual salary.
The Remuneration report discloses that no exit payments were payable to individuals named in that
report.
Parliamentary accountability and
audit report
The content of notes 1 to 3 are subject to audit.

1. Regularity of expenditure
Losses and special payments are items that Parliament would not have contemplated when it agreed
funding or passed legislation. By their nature, they are items that ideally should not arise and should
only be accepted if there is no feasible alternative. They are therefore subject to special control
procedures compared with the generality of payments.
1.1 Losses
2018/19 2017/18
Total number of losses 984 842
Total value of losses (£000) 1,923 927

CQC incurred one loss that exceeded £300k during the year (2017/18: none). This related to
backdated social security costs for furniture provided to homeworkers and mileage allowances paid to
lease car users covering a period of four years following an HMRC compliance check and totalled
£881k. HMRC’s compliance check is ongoing and additional liabilities may be incurred but at the
reporting date cannot be quantified.
1.2 Special payments
2018/19 2017/18
Total number of special payments 2 –
Total value of special payments (£000) 33 –

1.3 Gifts
During 2018/19 CQC made no gifts (2017/18: none).

2. Remote contingent liabilities

There were no remote contingent liabilities as at 31 March 2019 (31 March 2018: none).
3. Fees and charges
The following table provides an analysis of the activities for which a fee is charged:
Income Full cost Deficit
£000 £000 £000
Regulatory fees for chargeable activities (204,284) 209,128 4,844

Regulatory fees are charged in accordance with the Health and Social Care Act 2008 to cover the cost
of our registration functions. These functions cover all our activities associated with registering
providers, making changes to their registration and carrying out inspections. During 2018/19, CQC
recovered 97.8% of its costs relating to chargeable activities through fees and also received grant-in-
aid funding from DHSC, see Notes to the financial statements (note 2).
Other existing responsibilities, such as our work under the Mental Health Act, are not included within
our registration functions, and their costs are funded by grant-in-aid from DHSC.

4. Better payment practice code

CQC’s policy is to pay creditors in accordance with contractual conditions or, where no specific

ACCOUNTABILITY RE PORT
conditions exist, within 5-30 days of the receipt of goods or services or the presentation of a valid
invoice, whichever is later. This complies with the Better Payment Practice Code and guidance as
published by HM Treasury.
2018/19 2017/18
Number of invoices paid within 30 days 99.4% 99.6%
Value of invoices paid within 30 days 99.8% 99.7%

In line with guidance from the government published in August 2010, CQC aims to pay 80% of all
undisputed invoices from suppliers within five working days. During 2017/18, CQC exceeded this
target based on volumes:
Target 2018/19 2017/18
Number of invoices paid within five working days 80.0% 86.6% 85.5%
Value of invoices paid within five working days 80.0% 95.4% 78.1%

Ian Trenholm
Chief Executive, Care Quality Commission
15 July 2019
Certificate and report of the
Comptroller and Auditor General to
the Houses of Parliament

Opinion on financial Basis of opinions

statements I conducted my audit in accordance with
International Standards on Auditing (ISAs)
I certify that I have audited the financial statements
(UK) and Practice Note 10 ‘Audit of Financial
of the Care Quality Commission for the year ended
Statements of Public Sector Entities in the
31 March 2019 under the Health and Social Care
United Kingdom’. My responsibilities under
Act 2008. The financial statements comprise: the
those standards are further described in the
Statements of Comprehensive Net Expenditure,
Auditor’s responsibilities for the audit of the
Financial Position, Cash Flows, Changes in
financial statements section of my certificate.
Taxpayers’ Equity and the related notes, including
Those standards require me and my staff to
the significant accounting policies. These financial
comply with the Financial Reporting Council’s
statements have been prepared under the
Revised Ethical Standard 2016. I am
accounting policies set out within them. I have also
independent of the Care Quality Commission in
audited the information in the Accountability
accordance with the ethical requirements that
Report that is described in that report as having
are relevant to my audit and the financial
been audited.
statements in the UK. My staff and I have
In my opinion: fulfilled our other ethical responsibilities in
accordance with these requirements. I believe
■■ the financial statements give a true and fair
that the audit evidence I have obtained is
view of the state of the Care Quality
sufficient and appropriate to provide a basis
Commission’s affairs as at 31 March 2019 and
for my opinion.
of net expenditure for the year then ended;
and
■■ the financial statements have been properly
Conclusions relating to
prepared in accordance with the Health and going concern
Social Care Act 2008 and Secretary of State
I am required to conclude on the appropriateness
directions issued thereunder.
of management’s use of the going concern basis
of accounting and, based on the audit evidence
Opinion on regularity obtained, whether a material uncertainty exists
related to events or conditions that may cast
In my opinion, in all material respects the income
significant doubt on the Care Quality
and expenditure recorded in the financial
Commission’s ability to continue as a going
statements have been applied to the purposes
concern for a period of at least twelve months
intended by Parliament and the financial
from the date of approval of the financial
transactions recorded in the financial statements
statements. If I conclude that a material
conform to the authorities which govern them.
uncertainty exists, I am required to draw
attention in my auditor’s report to the related As part of an audit in accordance with ISAs (UK),
disclosures in the financial statements or, if such I exercise professional judgment and maintain
disclosures are inadequate, to modify my professional scepticism throughout the audit. I also:
opinion. My conclusions are based on the audit
■■ identify and assess the risks of material
evidence obtained up to the date of my auditor’s
misstatement of the financial statements,
report. However, future events or conditions may
whether due to fraud or error, design and
cause the entity to cease to continue as a going
perform audit procedures responsive to those
concern. I have nothing to report in these
risks, and obtain audit evidence that is
respects.
sufficient and appropriate to provide a basis
for my opinion. The risk of not detecting a
Responsibilities of the material misstatement resulting from fraud is
Board and Accounting higher than for one resulting from error, as
fraud may involve collusion, forgery,
Officer for the financial intentional omissions, misrepresentations, or
statements the override of internal control.

As explained more fully in the Statement of

■■ obtain an understanding of internal control
Accounting Officer’s Responsibilities, the relevant to the audit in order to design audit
Accounting Officer is responsible for the procedures that are appropriate in the

ACCOUNTABILITY RE PORT
preparation of the financial statements and for circumstances, but not for the purpose of
being satisfied that they give a true and fair expressing an opinion on the effectiveness of
view. the Care Quality Commission’s internal control.
■■ evaluate the appropriateness of accounting
Auditor’s responsibilities for policies used and the reasonableness of
accounting estimates and related disclosures
the audit of the financial made by management.
statements ■■ evaluate the overall presentation, structure
My responsibility is to audit, certify and report and content of the financial statements,
on the financial statements in accordance with including the disclosures, and whether the
the Health and Social Care Act 2008. consolidated financial statements represent
the underlying transactions and events in a
An audit involves obtaining evidence about the manner that achieves fair presentation.
amounts and disclosures in the financial
statements sufficient to give reasonable I communicate with those charged with
assurance that the financial statements are free governance regarding, among other matters,
from material misstatement, whether caused by the planned scope and timing of the audit and
fraud or error. Reasonable assurance is a high significant audit findings, including any
level of assurance but is not a guarantee that an significant deficiencies in internal control that
audit conducted in accordance with ISAs (UK) I identify during my audit.
will always detect a material misstatement when In addition, I am required to obtain evidence
it exists. Misstatements can arise from fraud or sufficient to give reasonable assurance that the
error and are considered material if, individually income and expenditure reported in the financial
or in the aggregate, they could reasonably be statements have been applied to the purposes
expected to influence the economic decisions of intended by Parliament and the financial
users taken on the basis of these financial transactions conform to the authorities which
statements. govern them.
Other information Matters on which I report
The Board and the Accounting Officer are by exception
responsible for the other information. The other
I have nothing to report in respect of the
information comprises information included in
following matters which I report to you if,
the annual report, other than the parts of the
in my opinion:
Accountability Report described in that report as
having been audited, the financial statements ■■ adequate accounting records have not been
and my auditor’s report thereon. My opinion on kept or returns adequate for my audit have
the financial statements does not cover the not been received from branches not visited
other information and I do not express any form by my staff; or
of assurance conclusion thereon. In connection ■■ the financial statements and the parts of the
with my audit of the financial statements, my
Accountability Report to be audited are not
responsibility is to read the other information
in agreement with the accounting records
and, in doing so, consider whether the other
and returns; or
information is materially inconsistent with the
financial statements or my knowledge obtained ■■ I have not received all of the information and
in the audit or otherwise appears to be explanations I require for my audit; or
materially misstated. If, based on the work I have
■■ the Governance Statement does not reflect
performed, I conclude that there is a material
compliance with HM Treasury’s guidance.
misstatement of this other information, I am
required to report that fact. I have nothing to
report in this regard. Report
I have no observations to make on these
Opinion on other matters financial statements.
In my opinion:
■■ the parts of the Accountability Report to be Gareth Davies
audited have been properly prepared in Comptroller and Auditor General
accordance with Secretary of State directions National Audit Office
made under the Health and Social Care Act 157–197 Buckingham Palace Road
2008; Victoria
London
■■ in the light of the knowledge and
SWIW 9SP
understanding of the Care Quality Commission
and its environment obtained in the course of 19 July 2019
the audit, I have not identified any material
misstatements in the Performance Report or
the Accountability Report; and
■■ the information given in the Performance
Report and Accountability Report for the
financial year for which the financial
statements are prepared is consistent with the
financial statements.
3
Financial
statements
The financial statements are prepared in accordance with the
Financial Reporting Manual 2018/19, published by HM Treasury,
and comprise:

Statement of Comprehensive Net Expenditure 88

A statement of CQC’s performance, summarising income and expenditure for the year.

Statement of Financial Position 89

A snapshot of CQC’s assets and liabilities as at the end of the financial year.

Statement of Cash Flows 90

The movements in cash during the year.

Statement of Changes in Taxpayers’ Equity 91

The movements to reserves in the year.

Notes to the financial statements 92

Additional details to the numbers included within the four financial statements.
Statement of Comprehensive Net
Expenditure
for the year ended 31 March 2019

2018/19 2017/18
Note £000 £000

Revenue from contracts with customers 3.1 (205,695) (193,658)

Other operating income 3.2 (110) (53)
Total operating income (205,805) (193,711)

Staff costs 4.1 173,995 169,176

Purchase of goods and services 4.2 47,156 43,471
Depreciation, amortisation and impairment charges 4.2 7,834 8,767
Provision expense 4.2 (3) 1,085
Other operating expenditure 4.2 9,901 9,483
Total operating expenditure 238,883 231,982

Net operating expenditure 33,078 38,271

Finance expense (49) (37)

Net expenditure for the year 33,029 38,234

Other comprehensive net expenditure

Items that will not be reclassified to net operating costs:
– Net gain on revaluation of intangible assets 6.1 (47) (200)
– Net gain on revaluation of property, plant and equipment 7.1 (4) (27)
– Impairments charged to revaluation reserve:
Intangible assets 6.1 11 –
Property, plant and equipment 7.1 4 –
– Actuarial gain in pension schemes 5.4 (11,279) (3,779)
Comprehensive net expenditure for the year 21,714 34,228

During the year CQC received grant-in-aid totalling £39,450k (2017/18: £43,100k) from the
Department of Health and Social Care (DHSC), which is not included in the Statement of
Comprehensive Net Expenditure. This funding was used to finance operating expenditure and non-
current asset additions purchased during the reporting period. For further details see note 2 to the
Financial Statements.
Notes 1 to 22, on pages 92 to 128, form part of these financial statements.
Statement of Financial Position
as at 31 March 2019

Re-presented
31 March 31 March
2019 20181
Note £000 £000

Non-current assets
Intangible assets 6 11,311 10,675
Property, plant and equipment 7 5,775 3,902
LGPS pension assets 5.1 3,242 2,450
Total non-current assets 20,328 17,027
Current assets
Trade and other receivables 9 13,328 7,514
Other current assets 9 627 688
Cash and cash equivalents 10 34,770 36,959
Total current assets 48,725 45,161
Total assets 69,053 62,188
Current liabilities
Trade and other payables 11 (26,923) (25,375)
Other pension liabilities 11 (21) (93)
Provisions 12.1 (730) (751)
Fee income in advance 11 (20,619) (24,312)
Total current liabilities (48,293) (50,531)
Total assets less current liabilities 20,760 11,657
Non-current liabilities
Provisions 12.1 (1,913) (2,021)
Other pension liabilities 11 (69) (75)
Total non-current liabilities excluding pension deficit (1,982) (2,096)
Assets less liabilities excluding pension deficit provision 18,778 9,561
LGPS pension deficit 5.1 (65,496) (73,582)
Assets less liabilities (46,718) (64,021)

Taxpayers’ equity
General reserve 15 (69,425) (80,007)
Revaluation reserve 15 257 486
Retained earnings reserve 15 22,450 15,500
Total taxpayers’ equity (46,718) (64,021)
1
Balances at 31 March 2018 have been reclassified in accordance with the requirements of IFRS 15, see note 14 for details.

Notes 1 to 22, on pages 92 to 128, form part of these financial statements. The financial statements
on pages 88 to 128 were approved by the Board on 19 June 2019 and signed on its behalf by:

Ian Trenholm
Chief Executive
15 July 2019
Statement of Cash Flows
for the year ended 31 March 2019

2018/19 2017/18
Note £000 £000

Cash flows from operating activities

Net expenditure for the year (33,029) (38,234)
Adjustment for non-cash transactions 13.1 10,122 12,664
Increase in trade receivables and other current assets 9 (5,753) (2,945)
Increase in trade and other payables 13.2 2,421 1,676
Decrease in pension liabilities 11 (78) (15)
(Decrease)/increase in fee income in advance 11 (3,693) 257
Use of provisions 12 (77) (114)
Non-cash adjustment relating to application of IFRS 9 14 (433) –
Net cash outflow from operating activities (30,520) (26,711)

Cash flows from investing activities

Purchase of intangible assets 13.3 (6,559) (4,817)
Purchase of property, plant and equipment 13.4 (4,626) (2,172)
Proceeds from disposal of property, plant and equipment 13.5 66 –
Net cash outflow from investing activities (11,119) (6,989)

Cash flows from financing activities:

Grant-in-aid from DHSC: cash drawn down in year 39,450 43,100
Net financing 39,450 43,100

Net (decrease)/increase in cash and cash equivalents in the year (2,189) 9,400
Cash and cash equivalents at 1 April 36,959 27,559
Cash and cash equivalents at 31 March 10 34,770 36,959

Notes 1 to 22, on pages 92 to 128, form part of these financial statements.

Statement of Changes in Taxpayers’
Equity
for the year ended 31 March 2019

Retained
General Revaluation earnings Total
reserve reserve reserve reserves
Note £000 £000 £000 £000

Balance at 1 April 2017 (81,649) 756 8,000 (72,893)

Changes in taxpayers’ equity for 2017/18

Grant-in-aid from DHSC: cash drawn down 43,100 – – 43,100
Net expenditure for the year (38,234) – – (38,234)
Revaluation gains:
– intangible assets 6.1 – 200 – 200
– property, plant and equipment 7.1 – 27 – 27
Transfer between reserves:
– Disposals and realised depreciation:
– intangible assets 6.1 467 (467) – –
– property, plant and equipment 7.1 30 (30) – –
– Retained fee income 15 (7,500) – 7,500 –
Actuarial gain in pension schemes 5.4 3,779 – – 3,779
Balance at 31 March 2018 (80,007) 486 15,500 (64,021)

Impact of the adoption of IFRS 9 14 (433) – – (433)

Balance at 1 April 2018 (80,440) 486 15,500 (64,454)

Changes in taxpayers’ equity for 2018/19

Grant-in-aid from DHSC: cash drawn down 39,450 – – 39,450
Net expenditure for the year (33,029) – – (33,029)
Revaluation gains:
– intangible assets 6.1 – 47 – 47
– property, plant and equipment 7.1 – 4 – 4
Impairment and reversal: – –
– intangible assets 6.1 – (11) – (11)
– property, plant and equipment 7.1 – (4) – (4)
Transfer between reserves:
– Disposals and realised depreciation:
– intangible assets 6.1 241 (241) – –
– property, plant and equipment 7.1 24 (24) – –
– Retained fee income 15 (6,950) – 6,950 –
Actuarial gain in pension schemes 5.4 11,279 – – 11,279
Balance at 31 March 2019 (69,425) 257 22,450 (46,718)

Notes 1 to 22, on pages 92 to 128, form part of these financial statements.

Notes to the financial statements
1. Statement of accounting policies
These financial statements have been prepared in a form directed by the Secretary of State and in
accordance with the Financial Reporting Manual (FReM) 2018/19, issued by HM Treasury, and
the Department of Health and Social Care (DHSC) Group Accounting Manual (GAM) 2018/19.
The accounting policies contained in the FReM and GAM follow International Financial Reporting
Standards (IFRS) as adapted or interpreted for the public sector context. Where the FReM or GAM
permits a choice of accounting policy, the accounting policy that is judged to be most appropriate to
the particular circumstances of CQC for the purpose of giving a true and fair view has been selected.
The particular policies adopted are described below. These have been applied consistently in dealing
with items considered material in relation to the accounts.
The financial statements are presented in £ sterling and all values are rounded to the nearest thousand
except where indicated otherwise.

1.1 Going concern

CQC’s annual report and accounts have been prepared on a going concern basis. CQC is mainly
financed by annual fees charged to registered providers; it also draws grant-in-aid funding from DHSC.
Parliament has demonstrated its commitment to fund DHSC for the foreseeable future, and DHSC has
demonstrated its commitment to the funding of CQC.

1.2 Accounting convention

These accounts have been prepared under the historical cost convention modified to account for the
revaluation of property, plant and equipment and intangible assets.

1.3 Critical accounting judgements and key sources of estimation

uncertainty
In the application of accounting policies management is required to make various judgements,
estimates and assumptions.
These estimates and associated assumptions are based on historical experience and other factors that
are relevant. Actual results may differ from those estimates. The estimates and underlying assumptions
are continually reviewed.
The following are critical judgements that have been made by management in the process of applying
CQC’s accounting policies that have the most significant effect on the amounts recognised in the
financial statements:
●● impairment of intangible assets (see accounting policy note 1.13 and note 6)
●● expected credit losses (see note 9.1)
●● indexation of non-current assets (see accounting policy notes 1.11 and 1.12, note 6 and note 7)
●● assumptions used to determine the IAS 19 pension liability for funded pension schemes (note 5).

1.4 Operating segments

Net expenditure is analysed in the Operating Segments note, note 2, and is reported in line with
management information used within CQC.

1.5 Revenue
The transition to IFRS 15 has been completed in accordance with paragraph C3(b) of the standard,
applying the standard retrospectively and recognising the cumulative effects at the date of initial
application.
In the adoption of IFRS 15 several practical expedients offered in the standard have been employed.
These are as follows:
●● CQC will not disclose information regarding performance obligations as part of a contract that has
an original expected duration of one year or less as per paragraph 121 of the standard.
●● CQC is to similarly not disclose information where revenue is recognised in line with the practical
expedient offered in paragraph B16 of the standard where the right to consideration corresponds
directly with value of the performance completed to date.
●● the FReM has mandated the exercise of the practical expedient offered in C7(a) of the standard
that requires CQC to reflect the aggregate effect of all contracts modified before the date of initial
application.
The main source of revenue for CQC is the annual statutory fees charged to all registered providers
of regulated activities in accordance with the Health and Social Care Act 2008 (as amended).
This revenue is recognised when (or as) performance obligations are satisfied by transferring
promised services to the customer and is measured at the amount of the transaction price allocated
to that performance obligation. The FReM has adapted the definition of a contract to include
legislation, such as the Health and Social Care Act 2008 (as amended), which enables CQC to receive
cash from another entity. Statute requires CQC to perform the continual task of maintaining the
register of providers of regulated activities over the whole period of registration, and without being
registered it is unlawful for a provider to operate. Fees are charged in accordance with the fees scheme
for 2018/19, published with the consent of the Secretary of State for Health, and are invoiced on
the anniversary of initial registration. Revenue is recognised equally over the 12-month period of
registration that the fee covers. The adoption of IFRS 15 has resulted in no change to the recognition
of revenue from statutory fees. In cases of voluntary de-registration, fees are refunded to registered
organisations in accordance with the fee rebate scheme detailed on CQC’s website.
Where statutory fees are paid and exceed the value of performance obligations satisfied at the end
of the accounting period the income is deferred (note 11).
Payment terms are standard reflecting cross-government principles. Statutory annual fees are payable
within 30 days of the invoice date otherwise the provider can opt to pay in up to 10 equal instalments
by direct debit.
The value of the benefit received when CQC accesses funds from the government’s apprenticeship
service are recognised as income in accordance with IAS 20, Accounting for Government Grants. Where
these funds are paid directly to an accredited training provider, non-cash income and a corresponding
non-cash training expense are recognised, both equal to the cost of the training funded.

1.6 Employee benefits

1.6.1 Short-term employee benefits
Salaries, wages and employment-related payments, including payments arising from the apprenticeship
levy, are recognised in the period in which the service is received from employees. The cost of annual
leave earned but not taken by employees at the end of the period is recognised in the financial
statements to the extent that employees are permitted to carry forward into the following period.

1.6.2 Retirement benefit costs

NHS pensions
Past and present employees of CQC are covered by the provisions of the NHS Pensions Scheme.
The scheme is an unfunded, defined benefit scheme that covers NHS employers, general practices
and other bodies, allowed under the direction of the Secretary of State, in England and Wales.
The scheme is not designed to be run in a way that would enable CQC to identify their share of the
underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a
defined contribution scheme: the cost to CQC of participating in the scheme is taken as equal to
the contributions payable to the scheme for the accounting period.
For early retirements, other than those due to ill-health, the additional pension liabilities are not
funded by the scheme. The full amount of the liability for the additional costs is charged to
expenditure at the time CQC commits itself to the retirement, regardless of the method of payment.
The schemes are subject to a full actuarial valuation every four years and an accounting valuation
every year.
Local government pensions
Some employees are members of the Local Government Pension Scheme (LGPS), which is a defined
benefit pension schemes that is administered through 16 local pension funds. Employees who were
members of the LGPS in a predecessor organisation were permitted to keep their legacy arrangements
when their employment transferred to CQC on 1 April 2009. Membership to the LGPS is closed to new
CQC employees.
Actuarial valuations are carried out at each Statement of Financial Position date. The scheme assets
and liabilities attributable to those employees can be identified and are recognised in CQC’s accounts.
The assets are measured at fair value, and the liabilities at the present value of the future obligations.
Charges recognised in the Statement of Comprehensive Net Expenditure are detailed below:
Charged to staff costs:
●● current service cost – the increase in liabilities because of additional service earned in the year.
●● past service cost – the increase in liabilities arising from current year decisions, the effect of which
relates to the years of service earned in earlier years.
●● administration expense – charges representing the cost of administering the fund.
●● gains or losses on settlements and curtailments – the result of actions to relieve the liabilities or
events that reduce the expected future service or accrual of benefits of employees.
Charged to other expenditure:
●● net interest cost – the expected increase in the present value of liabilities during the year as they
move one year closer to being paid.
Charged to other comprehensive expenditure:
●● actuarial gain or loss on assets and liabilities – the extent to which investment returns achieved in
year are different from interest rates used at the start of the year.
Other pension schemes
CQC employees that are not eligible to join the NHS Pensions Scheme are enrolled in the National
Employment Savings Trust (NEST). The scheme is accounted for as if it were a defined contribution
scheme: the cost to CQC of participating in the scheme is taken as equal to the contributions payable
to the scheme for the accounting period.

1.7 Other expenses

Other operating expenses are recognised when, and to the extent that, the goods or services have
been received. They are measured at the fair value of the consideration payable.

1.8 Grants receivable

Grants received, including grant-in-aid received for revenue and capital expenditure is treated as
financing and credited to the Statement of Changes in Taxpayers’ Equity.

1.9 Apprenticeship levy

CQC is required to pay an apprenticeship levy amounting to 0.5% of the total pay bill, less an
allowance of £15,000. The levy is recognised as an expense and included as an additional social
security cost within the financial statements.
It is expected that apprenticeship funding will be passed directly to training providers. Where a CQC
employee receives training funded by the levy, CQC will recognise a non-cash expense in the period in
which the training occurs. An additional non-cash income amount, equal to the costs paid directly to
the training provider, is also recognised.

1.10 Value added tax

Irrecoverable value added tax (VAT) is charged to the relevant expenditure category or included in the
capitalised purchase cost of non-current assets. Where output tax is charged or input VAT is
recoverable, the amounts are stated net of VAT.
1.11 Intangible assets
1.11.1 Recognition
Intangible assets are non-monetary assets without physical substance, which are capable of sale
separately from the rest of CQC’s business or which arise from contractual or other legal rights.
They are capitalised if:
●● it is probable that future economic benefits will flow to, or service potential will be supplied, to, CQC
●● it is expected to be used for more than one financial year
●● the cost of the item can be measured reliably, and either:
−− the item has a cost of at least £5,000, or
−− collectively, a number of items have a cost of at least £5,000 and individually have a cost of more
than £250, where the assets are functionally interdependent, had broadly simultaneous purchase
dates, are anticipated to have simultaneous disposal dates and are under single managerial
control.
Software that is integral to the operating of hardware, for example an operating system, is capitalised
as part of the relevant item of property, plant and equipment. Software that is not integral to the
operation of hardware, for example application software, is capitalised as an intangible asset.
Expenditure relating to IT software and software developments, including CQC’s website, is capitalised
if the asset has a cost of at least £5,000 or considered part of a collective group of interdependent
assets with a total cost exceeding £5,000 and has a useful life of more than one year.
General IT software project management costs are not capitalised.

1.11.2 Measurement
Intangible assets are initially recognised at cost. The amount initially recognised for internally-
generated intangible assets is the sum of the expenditure incurred from the date when the criteria
for recognition are initially met. Where no internally generated intangible asset can be recognised,
the expenditure is recognised in the period in which it was incurred.
Revaluations are performed with sufficient regularity to ensure that carrying amounts are not
materially different from those that would be determined at the end of the reporting period. All assets
are revalued annually using the appropriate producer price index (PPI) as published by the Office for
National Statistics.
An increase arising on revaluation is taken to the revaluation reserve except when it reverses an
impairment for the same asset previously recognised in expenditure, in which case it is credited to
expenditure to the extent of the decrease previously charged there. A revaluation decrease that does
not result from a loss of economic value or service potential is recognised as an impairment charged to
the revaluation reserve to the extent that there is a balance on the reserve for the asset, and thereafter
to expenditure. Gains and losses recognised in the revaluation reserve are reported as other
comprehensive net expenditure in the Statement of Comprehensive Net Expenditure.
1.12 Property, plant and equipment
1.12.1 Recognition
Expenditure on office refurbishments, furniture and fittings, office equipment, IT equipment and
infrastructure is capitalised if:
●● it is held for use in delivering services or for administrative purposes
●● it is probable that future economic benefits will flow to, or service potential will be supplied to, CQC
●● it is expected to be used for more than one financial year
●● the cost of the item can be measured reliably, and either;
−− the item has cost of at least £5,000, or,
−− collectively, a number of items have a cost of at least £5,000 and individually have a cost of
more than £250, where the assets are functionally interdependent, had broadly simultaneous
purchase dates, are anticipated to have simultaneous disposal dates and are under single
managerial control.

1.12.2 Measurement
All property, plant and equipment is measured initially at cost, representing the cost directly
attributable to acquiring the asset and bringing it to the location and in the condition necessary for it
to operate in the manner intended by management. Assets that are held for their service potential and
are in use are measured subsequently at their current value in existing use.
Revaluations of property, plant and equipment are performed with sufficient regularity to ensure that
carrying amounts are not materially different from those that would be determined at the end of the
reporting period. Assets are restated at current value each year using the appropriate producer price
index (PPI) as published by the Office for National Statistics.
Revaluations and impairments are treated in the same manner as for intangible assets, note 1.11.2.

1.13 Amortisation, depreciation and impairments

Non-current assets are depreciated or amortised from the date that they are brought into use. Assets
under development are not amortised.
Depreciation and amortisation is charged to write off the costs or valuation of property, plant and
equipment and intangible assets, less any residual value, on a straight-line basis over their estimated
useful lives. The estimated useful life is the period over which CQC expects to obtain economic
benefits or service potential from the asset. This is specific to CQC and may be shorter than the
physical life of the asset itself. Estimated useful lives and residual values are reviewed each year-end,
with the effect of any changes recognised on a prospective basis.
Estimated useful lives:

Category Asset type Estimated useful life

Intangible assets IT software developments 3 to 5 years
Software licences 3 to 5 years
Website 3 to 5 years
Property, plant and equipment Information technology 3 to 7 years
Furniture and fittings 10 years (or lease break date
if lower)
At each financial year-end, CQC checks whether there is any indication that its property, plant and
equipment or intangible assets have suffered an impairment loss. If there is indication of such an
impairment, the recoverable amount of the asset is estimated to determine whether there has been a
loss and, if so, its amount. Intangible assets not yet available for use are also tested for impairment
annually at the financial year-end.
Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of the recoverable amount, but capped at the amount that would have been determined
had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure.

1.14 Leases
Operating lease payments are recognised as an expense on a straight-line basis over the lease term.
There are no finance leases.

1.15 Provisions
Provisions are recognised when CQC has a present legal or constructive obligation as a result of a past
event, it is probable that CQC will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation. The amount recognised as a provision is the best estimate of
the expenditure required to settle the obligation at the end of the reporting period, taking into
account the risks and uncertainties.
Where a provision is measured using the cash flows estimated to settle the obligation, its carrying
amount is the present value of those cash flows using HM Treasury’s discount rates.
Early retirement provisions are discounted using HM Treasury’s pension discount rate of 0.29%
(2017/18: 0.10%) in real terms. All other provisions are subject to three separate discount rates
according to the expected timing of cash flows from the Statement of Financial Position date:
●● a short-term rate of 0.76% (2017/18: negative 2.42%) for expected cash flows up to and including
five years
●● a medium-term rate of 1.14% (2017/18: negative 1.85%) for expected cash flows over five years
up to and including 10 years
●● a long-term rate of 1.99% (2017/18: negative 1.56%) for expected cash flows over 10 years.
All percentages are in real terms.
1.16 Contingent liabilities and contingent assets
A contingent liability is:
●● a possible obligation that arises from past events and the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of CQC, or
●● a present obligation that is not recognised because it is not probable that a payment will be required
to settle the obligation, or the amount of the obligation cannot be measured sufficiently reliably.
A contingent liability is disclosed unless the possibility of a payment is remote.
A contingent asset is a possible asset that arises from past events and the existence of which will
be confirmed by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of CQC. A contingent asset is disclosed where an inflow of economic
benefits is probable.
Where the time value of money is material, contingent liabilities and contingent assets are disclosed
at their present value.

1.17 Financial assets

Financial assets are recognised when CQC becomes party to the contractual provision of the financial
instrument or, in the case of trade receivables, when the goods or services have been delivered.
Financial assets are de-recognised when the contractual rights have expired or when the asset has
been transferred and CQC has transferred substantially all of the risks and rewards of ownership or
has not retained control of the asset.
Financial assets are initially recognised at fair value plus or minus directly attributable transaction
costs for financial assets not measured at fair value through profit or loss. Fair value is taken as the
transaction price, or otherwise determined by reference to quoted market prices, where possible,
or by valuation techniques.
Financial assets are classified into the following categories: financial assets at amortised cost, financial
assets at fair value through other comprehensive income, and financial assets at fair value through
profit and loss. The classification is determined by the cash flow and business model characteristics
of the financial assets, as set out in IFRS 9, and is determined at the time of initial recognition.
CQC’s only financial assets are trade receivables which are measured at amortised cost.

1.17.1 Financial assets at amortised cost

Financial assets measured at amortised cost are those held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows and where the cash flows are solely
payments of principal and interest. This includes most trade receivables, loans receivable, and other
simple debt instruments.
After initial recognition, these financial assets are measured at amortised cost using the effective
interest method, less any impairment. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the life of the financial asset to the gross carrying amount
of the financial asset.
1.17.2 Impairment
For all contract assets CQC recognises a loss allowance representing the expected credit loss on the
financial asset.
CQC adopts the simplified approach to impairment, in accordance with IFRS 9, and measures the loss
allowance for any trade receivables at an amount equal to the lifetime expected credit losses.
Expected credit loss allowances of trade receivables are determined by applying a weighted
probability of a loss event occurring during the lifetime of the asset. This includes the probability of
the whole amount becoming irrecoverable, part of the amount becoming irrecoverable and full
recovery. These probabilities are determined by historic recovery for each category of receivables:
income from fees by sector and income from other activities.
HM Treasury has ruled that central government bodies may not recognise stage 1 or stage 2
impairments against other government departments, their executive agencies, the Bank of England,
Exchequer Funds, and Exchequer Funds’ assets where repayment is ensured by primary legislation.
CQC therefore does not recognise loss allowances for stage 1 or stage 2 impairments against these
bodies. Additionally, DHSC provides a guarantee of last resort against the debts of its arm’s length
bodies and NHS bodies (excluding NHS charities), and CQC does not recognise loss allowances for
stage 1 or stage 2 impairments against these bodies.
For financial assets that have become credit impaired since initial recognition (stage 3), expected
credit losses at the reporting date are measured as the difference between the asset’s gross carrying
amount and the present value of the estimated future cash flows discounted at the financial asset’s
original effective interest rate. Any adjustment is recognised in the Statement of Comprehensive Net
Expenditure.

1.18 Financial liabilities

Financial liabilities are recognised in the Statement of Financial Position when CQC becomes party to
the contractual provisions of the financial instrument or, in the case of trade payables, when the goods
or services have been received. Financial liabilities are de-recognised when the liability has been
discharged, that is the liability has been paid or has expired.
CQC have no financial liabilities other than trade payables. Trade payables are not interest bearing and
are stated at their nominal value.
Non-current payables are discounted when the time value of money is considered material.
Consequently, the liability for additional pension contributions resulting from the early termination of
staff in previous years is discounted by 0.29% (2017/18: 0.10%). This is the rate for market yields on
AA corporate bonds as published by HM Treasury.
1.19 IFRS standards that have been issued but have not yet been
adopted
The GAM does not require the following IFRS standards and interpretations to be applied in 2018/19.
These standards are still subject to FReM adoption, with IFRS 16 to be implemented in 2019/20, and
the implementation date for IFRS 17 still subject to HM Treasury consideration.
●● IFRS 16 Leases: application has been deferred and the standard will be applied for accounting
periods beginning on or after 1 January 2020, as it is yet to be adopted by the FReM. CQC currently
has commitments under operating leases of approximately. £7.3m, which IFRS 16 requires to be
recognised on the Statement of Financial Position as right of use assets. Corresponding lease
liabilities will also be recognised on transition to the standard as currently interpreted by the FReM.
●● IFRS 17 Insurance Contracts: application is required for accounting periods beginning on or after 1
January 2021 but has not yet been adopted by the FReM. Early adoption is not therefore permitted.
CQC does not expect the adoption to have a material impact on the Financial Statements.
●● IFRIC 23 Uncertainty over Income Tax Treatments: application is required for accounting periods
beginning on or after 1 January 2019. CQC do not expect the adoption to have a material impact on
the Financial Statements.
2. Analysis of net expenditure by activities
2.1 Operating segments
IFRS 8 Operating Segments requires operating segments to be identified based on internal reports that
are regularly reviewed by the Chief Executive. The Board and Executive Team regularly evaluate CQC’s
performance using operating segments.
CQC reports performance against each of the operational directorates. These are:
●● Adult Social Care (ASC)
●● Hospitals
●● Primary Medical Services and Integrated Care (PMS)
●● Other which includes Strategy and Intelligence, Regulatory Customer and Corporate Operations
(RCCO),Digital and Healthwatch England.
Operating income and the Statement of Financial Position by segment is not included as this was not
reported to the Board.
2018/19 2017/181
ASC Hospitals PMS Other Total Total
£000 £000 £000 £000 £000 £000

Pay costs 55,552 39,576 23,099 54,396 172,623 166,277

Non-pay costs 3,442 4,982 2,163 44,487 55,074 52,099
Total 58,994 44,558 25,262 98,883 227,697 218,376

2.2 Reconciliation to Statement of Comprehensive Net Expenditure

The reconciliation below details the non-cash adjustments which are not included within the operating
segments analysis presented to the Board and Executive Team.
2018/19 2017/181
£000 £000

Pay costs 172,623 166,277

Non-pay costs 55,074 52,099
Total expenditure 227,697 218,376

Items not included within operating segments:

Staff costs
Increase in provision for pension fund deficits 621 1,098
Depreciation, amortisation and impairment charges 7,834 8,767
Provisions (3) 1,085
Other operating expenditure
Net interest expense on pension scheme assets and liabilities 1,780 1,729
Expected credit loss 954 927
Total operating expenditure 238,883 231,982
2017/18 balances not previously disclosed.
1
2.3 Analysis of net expenditure by funding stream
The table below presents the net position for chargeable and non-chargeable activities by aligning
income and funding with their related costs. Chargeable activities are mainly funded by providers
through fees and a small subsidy from grant-in-aid; non-chargeable activities are funded by grant-in-
aid and reimbursement for external work. This analysis includes non-cash adjustments of £6.0m which
are agreed with DHSC and are offset by a non-cash budget.
Re-presented
2018/19 2017/181
Chargeable Non- Chargeable Non-
activities chargeable activities chargeable
activities Total activities Total
£000 £000 £000 £000 £000 £000

Funding
Revenue from contracts with (204,284) (1,411) (205,695) (193,658) – (193,658)
customers
Grant-in-aid (cash) (2,700) (25,530) (28,230) (6,197) (29,186) (35,383)
Other operating income (100) (10) (110) – (53) (53)
Subtotal: funding (207,084) (26,951) (234,035) (199,855) (29,239) (229,094)

Operating expenditure
Staff costs 152,800 21,195 173,995 145,761 23,415 169,176
Purchase of goods and services 41,600 5,556 47,156 37,089 6,382 43,471
Depreciation, amortisation and 6,950 884 7,834 7,500 1,267 8,767
impairment charges
Provision expenses (3) – (3) 1,085 – 1,085
Other operating expenditure 7,830 2,071 9,901 7,109 2,374 9,483
Subtotal: operating 209,177 29,706 238,883 198,544 33,438 231,982
expenditure

Finance expenses (49) – (49) (37) – (37)

Total expenditure 209,128 29,706 238,834 198,507 33,438 231,945

Net excess of expenditure 2,044 2,755 4,799 (1,348) 4,199 2,851

before DHSC non-cash
allowances
2017/18 balances have been re-presented to disclose the allocation of funding and non-cash items to chargeable and
1

non-chargeable activities.
3. Income
3.1  Revenue from contracts with customers
Re-presented
2018/19 2017/181
£000 £000

Income from fees:

NHS trusts (56,037) (56,555)
Adult social care – residential (70,441) (68,199)
Adult social care – community (20,917) (18,176)
Independent healthcare – hospitals (4,313) (3,865)
Independent healthcare – community (6,126) (4,998)
Independent healthcare – single specialty (1,009) (926)
Dentists (7,370) (7,666)
NHS GP practices (38,071) (33,273)
Subtotal: income from fees (204,284) (193,658)
Income from other activities (1,411) –
Total revenue from contracts with customers (205,695) (193,658)

3.2  Other operating income

Re-presented
2018/19 2017/181
£000 £000

Profit on disposal of property, plant and equipment (61) –

Apprenticeship training grant (non-cash) (49) (53)
Total other operating income (110) (53)
1
2017/18 balances have been reclassified in accordance with the requirements of IFRS 15.
4. Operating expenditure
4.1  Staff costs
2018/19 2017/18
£000 £000

Wages and salaries 139,468 133,760

Social security costs 14,507 14,152
NHS pension costs 13,954 13,103
LGPS pension costs 5,014 5,273
Other pension costs 44 25
Apprenticeship levy 671 646
Termination benefits 750 1,801
Less recoveries in respect of outward secondments (1,034) (682)
Increase in provision for pension fund deficits 621 1,098
Total staff costs 173,995 169,176
4.2  Other operating expenditure
2018/19 2017/18
£000 £000

Purchase of goods and services

Establishment 20,179 17,196
Travel and subsistence 11,618 10,812
Rentals under operating leases 5,562 5,839
Premises 4,982 4,720
Training and development 1,368 1,620
Professional fees 973 1,372
Supplies and services 1,953 973
Consultancy 293 715
External audit fee (statutory work) 145 145
Insurance 83 79
Subtotal: purchases of goods and services 47,156 43,471

Depreciation, amortisation and impairment charges

Amortisation of intangible assets 5,191 7,180
Depreciation of property, plant and equipment 1,660 1,522
Impairment of intangible assets 911 18
Impairment of property, plant and equipment 72 47
Subtotal: depreciation, amortisation and impairment charges 7,834 8,767

Provision expense (3) 1,085

Other operating expenditure

Experts by Experience 3,980 4,629
Business rates paid to local authorities 1,959 2,060
Net interest expense on pension scheme assets and liabilities 1,780 1,729
Expected credit loss 867 –
Irrecoverable debts 87 927
Apprenticeship training grant (non-cash) 49 53
Loss on disposal of fixed assets – 22
Other 1,179 63
Subtotal: other operating expenditure 9,901 9,483

Total other operating expenditure 64,888 62,806

5. Pension costs
During the year CQC’s employees were able to participate in one of the following contributory pension
schemes:
●● NHS Pension Scheme
●● Local Government Pension Scheme (LGPS)
●● National Employment Savings Trust (NEST)
Both the NHS Pension Scheme, which is the principal pension scheme for staff recruited directly by
CQC, and NEST are not designed to run in a way that would allow CQC to identify its share of the
underlying scheme assets and liabilities.
LGPS is a multi-employer defined benefit scheme as described in IAS 19 Employee Benefits. Due to
legacy arrangements from predecessor organisations CQC has active members in 16 local pension
funds that are part of LGPS. LGPS changed from a final salary to career average basis for benefits
accruing after 1 April 2014. Further information on the funding arrangements is contained within note
5.11 below.
Valuations of CQC’s assets and liabilities in each LGPS as at 31 March 2019 have been prepared in
accordance with IAS 19. The results relating to each LGPS are disclosed in note 5.1 below. The
Statement of Financial Position shows net pension assets totalling £3.2m (31 March 2018: £2.5m) and
net pension deficits of £65.5m (31 March 2018: £73.6m) relating to CQC’s membership in the LGPS.
The present value, the related current service cost and past service cost were measured using the
projected unit credit method. This means that the current service cost will increase as the members of
the scheme approach retirement.
The actuarial assessment of each obligation was carried out at 31 March 2019 by:
Pension fund Actuary
Avon Mercers Ltd.
Cambridgeshire Hymans Robertson LLP
Cheshire Hymans Robertson LLP
Cumbria Mercers Ltd.
Dorset Barnett Waddingham
East Sussex Hymans Robertson LLP
Essex Barnett Waddingham
Greater Manchester Hymans Robertson LLP
Hampshire Aon Hewitt
Merseyside Mercers Ltd.
Shropshire Mercers Ltd.
Suffolk Hymans Robertson LLP
Surrey Hymans Robertson LLP
Teesside Aon Hewitt
West Sussex Hymans Robertson LLP
West Yorkshire Aon Hewitt
5.1 Pension assets and liabilities
The pension assets and liabilities attributable to CQC for each local government defined pension
benefit scheme are as follows:
Re-presented
Surplus/ surplus/
Assets Liabilities (deficit) (deficit)
31 March 31 March 31 March 31 March
2019 2019 2019 2018
Pension fund £000 £000 £000 £000

Funds with a net deficit

Avon 5,569 (7,608) (2,039) (1,773)
Cheshire 4,452 (4,564) (112) (61)
Dorset 2,807 (4,052) (1,245) (1,353)
Essex 6,548 (6,571) (23) (429)
Hampshire 5,550 (7,610) (2,060) (2,340)
Merseyside 7,827 (9,058) (1,231) (1,024)
Shropshire 2,838 (3,740) (902) (798)
Suffolk 3,926 (5,032) (1,106) (1,038)
Teesside 320,201 (376,257) (56,056) (63,242)
West Yorkshire 12,221 (12,943) (722) (1,043)
Subtotal: funds with a net deficit 371,939 (437,435) (65,496) (73,101)1

Funds with a net surplus

Cambridgeshire 3,793 (3,463) 330 316
Cumbria 4,400 (3,952) 448 172
East Sussex 7,014 (6,337) 677 278
Greater Manchester 19,003 (18,990) 13 (481)
Surrey 5,989 (5,690) 299 289
West Sussex 5,117 (3,642) 1,475 1,395
Subtotal: funds with a net surplus 45,316 (42,074) 3,242 1,9691

Total 417,255 (479,509) (62,254) (71,132)

1
 t 31 March 2019 Greater Manchester has a net surplus of £13k but was recognised with a net deficit of £481k at 31
A
March 2018. For comparative purposes, Greater Manchester has been included within the subtotal of funds with a net
surplus. The Statement of Financial Position as at 31 March 2018 recognises pension funds with a net surplus of £2,450k
and pension funds with a net deficit of £73,582k.

All assets are held at bid value.

The impact of an asset ceiling on the recognition of assets is directed by paragraph 64 of IAS19.
An asset ceiling is the limit above which further increases in net pension assets cease to be recognised
for accounting purposes. At 31 March 2019, no asset ceilings were applied to any of the funds
(31 March 2018: nil).
Seven employees (2017/18: 7) retired early on ill-health grounds during the year. No additional
pension costs (2017/18: £nil) were levied on CQC as a result.
5.2 Actuarial assumptions
5.2.1 Financial assumptions
A summary of the key assumptions used by the actuaries of the pension schemes are as follows:
Teesside Pension Fund Other pension funds
% per annum % per annum

Key assumptions used: 2018/19 2017/18 2018/19 2017/18

Discount rate 2.4 2.6 2.4 – 2.7 2.5 – 2.7

Expected rate of salary increases 3.2 3.1 2.8 – 4.0 2.7 – 3.9
Future pension increases 2.2 2.1 2.2 – 2.5 2.1 – 2.4
CPI inflation 2.2 2.1 2.2 – 2.5 2.1 – 2.4

5.2.2 Mortality assumptions

Based on actuarial mortality tables, the average future life expectancies at age 65 are summarised
below:
Teesside Pension Fund Other pension funds

Key assumptions used: 2018/19 2017/18 2018/19 2017/18

Retiring today:
Males 22.2 22.9 21.3 – 23.7 21.5 – 24.1
Females 24.1 25.0 23.6 – 26.4 24.1 – 27.2
Retiring in 20 years:
Males 23.9 25.1 22.9 – 26.3 23.1 – 26.2
Females 25.9 27.3 25.4 – 29.0 26.2 – 29.4

5.3 Charges to net expenditure

Amounts recognised in the Statement of Comprehensive Net Expenditure in respect of these defined
benefit pension schemes are as follows:
2018/19 2017/18
£000 £000

Service cost:
– Current service cost 5,572 6,311
– Past service cost 239 248
– Administration expenses 73 81
Net interest expense 1,780 1,729
Amount recognised in net expenditure 7,664 8,369
Of the expense for the year, the total service cost of £5.9m (2017/18: £6.6m) has been included in
the Statement of Comprehensive Net Expenditure as staff expenditure, note 4.1. £5.3m (2017/18:
£5.5m) is included within LGPS pension costs and £0.6m (2017/18: £1.1m) is included as an increase
in provision for pension fund deficits. The net interest expense of £1.8m (2017/18: £1.7m) has been
included in other expenditure, note 4.2. The re-measurement of the net defined benefit obligation is
included in the Statement of Comprehensive Net Expenditure.

5.4 Charges to other comprehensive net expenditure

Amounts recognised in the Statement of Comprehensive Expenditure are as follows:
2018/19 2017/18
£000 £000

The return on plan assets (excluding amounts included in net interest expense) (20,042) (4,186)
Other re-measurement losses on plan assets – –
Actuarial gains arising from changes in demographic assumptions (14,576) –
Actuarial (gains)/losses arising from changes in financial assumptions 22,605 (1,811)
Actuarial losses/(gains) arising from experience adjustments 734 2,218
Re-measurement of the net defined benefit obligations (11,279) (3,779)

The cumulative amount of actuarial gains and losses recognised in reserves since the date of transition
to IFRS on 1 April 2008 to 31 March 2019 is £69m (31 March 2018: £80m).

5.5 Amount recognised in the Statement of Financial Position

The amount included in the Statement of Financial Position arising from CQC’s obligations in respect
of its defined benefit schemes is as follows:
31 March 31 March
2019 2018
£000 £000

Present value of funded benefit obligations (479,377) (465,799)

Fair value of scheme assets 417,255 394,760
Deficit in scheme (62,122) (71,039)
Present value of unfunded benefit obligations (132) (93)
Net deficit recognised in the Statement of Financial Position (62,254) (71,132)
5.6 Reconciliation of fair value of scheme liabilities
Movements in the present value of defined benefit obligations were as follows:
2018/19 2017/18
£000 £000

At 1 April (465,892) (460,954)

Current service cost (5,572) (6,311)
Administration expenses (65) (74)
Interest cost (11,948) (11,361)
Contributions from scheme members (1,313) (1,474)
Past service costs (239) (248)
Re-measurement gains/(losses):
– Actuarial gains arising from changes in demographic assumptions 14,576 –
– Actuarial gains/(losses) arising from changes in financial assumptions (22,605) 1,811
– Actuarial (losses)/gains arising from experience adjustments (734) (2,218)
Benefits paid 14,283 14,937
At 31 March (479,509) (465,892)

5.7 Reconciliation of fair value of employer assets

Movements in the fair value of the scheme assets were as follows:
2018/19 2017/18
£000 £000

At 1 April 394,760 388,870

Interest income 10,168 9,632
Re-measurement gains:
The return on plan assets (excluding amounts included in net interest expense) 20,042 4,186
Other – –
Employer contributions 5,263 5,542
Member contributions 1,313 1,474
Benefits paid (14,283) (14,937)
Administration expenses (8) (7)
At 31 March 417,255 394,760
5.8 Fair value of employer assets
The fair value of scheme assets at the Statement of Financial Position date were as follows:
Quoted Unquoted Total Total
assets assets assets assets
as at as at as at as at
31 March 31 March 31 March 31 March
2019 2019 2019 2018
£000 £000 £000 £000

Equities 277,313 3,936 281,249 283,016

Property 25,189 9,351 34,540 28,149
Government bonds 4,199 1,076 5,275 5,041
Other bonds 5,550 439 5,989 5,660
Cash 44,062 919 44,981 36,922
Other 26,295 18,926 45,221 35,972
Total 382,608 34,647 417,255 394,760

Assets values, particularly equity holdings, are exposed to market risk resulting from the investment
activities of each pension fund. Administering authorities manage and control this risk through
investment management which aims to minimise the overall reduction in asset values and maximise
the opportunity for gains.

5.9 Maturity profile of the defined benefit obligation

The weighted average duration of the defined benefit obligation of the pension schemes is between
13 and 18 years (Teesside: 17 years).

5.10 Sensitivity analysis

The approximate impact of changing the key assumptions on the present value of the funded defined
benefit obligation as at 31 March 2019 is set out below. In each case only the assumption specified is
altered and all other assumptions remain the same as disclosed in note 5.2.

Care Quality Commission Annual report and accounts 2018/19

 Teesside Pension Fund Other pension funds
£000 £000 £000 £000 £000 £000

Adjustment to discount rate + 0.1% Current - 0.1% + 0.1% Current - 0.1%

Present value of total obligation 369,992 376,257 382,628 101,691 103,252 104,817
Movement (6,265) – 6,371 (1,561) – 1,565

Adjustment to expected rate

of salary increases + 0.1% Current - 0.1% + 0.1% Current - 0.1%
Present value of total obligation 377,357 376,257 375,166 103,354 103,252 103,150
Movement 1,100 – (1,091) 102 – (102)

Adjustment to future pension

increases + 0.1% Current - 0.1% + 0.1% Current - 0.1%
Present value of total obligation 381,519 376,257 371,073 104,742 103,252 101,766
Movement 5,262 – (5,184) 1,490 – (1,486)

Adjustment to life expectancy - 1 year Current + 1 year - 1 year Current + 1 year

Present value of total obligation 388,422 376,257 364,221 106,711 103,252 99,811
Movement 12,165 – (12,036) 3,459 – (3,441)

5.11 Funding arrangements

The funded nature of the LGPS requires participating employers and employees to pay contributions
into the fund calculated at a level intended to balance the pension liabilities with investment assets.
Information on the framework for calculating contributions to be paid is set out in the LGPS
Regulations 2013 and the Funding Strategy Statement of each fund.
Contribution rates for each of the schemes are reviewed at least every three years following a full
actuarial valuation. The last triennial actuarial valuation was completed as at 31 March 2016 which set
the employer contribution rates for three years from 1 April 2017 to 31 March 2020. Some of the
funds have also levied a cash sum in addition to a percentage of payroll costs as part of the deficit
recovery plan. Increases to local government pensions in payment and deferred pensions have been
linked to annual increases in the consumer price index (CPI), rather than the retail prices index (RPI).
Contribution rates for 2019/20 range between 0% and 41.6% (17.9% for Teesside Pension Fund) with
annual cash sums ranging from £27k to £652k (£nil for Teesside Pension Fund). It is estimated that
employer contributions for 2019/20 will total £5,248k (Teesside: £2,882k).
The next valuation exercise will be undertaken as at 31 March 2019 which will set contribution rates
for the three years from 1 April 2020 to 31 March 2023.
When the active membership in any of the funds falls to zero the administering authority will obtain
an actuarial valuation of the current and former employees as at the termination date. CQC would be
required to pay any cessation deficit that is determined, however any surplus is retained by the fund.
DHSC have provided a guarantee to meet the pension deficit liability that fall due.

Care Quality Commission Annual report and accounts 2018/19

In December 2018 the Court of Appeal ruled against the government in two cases: Sargeant and
others v London Fire and Emergency Planning Authority [2018] UKEAT/0116/17/LA and McCloud
and others v Ministry of Justice [2018] UKEAT/0071/17/LA. The cases related to the Firefighters’
Pension Scheme (Sargeant) and to the Judicial Pensions Scheme (McCloud). For the purposes of the
LGPS, these cases are known together as ‘McCloud’. The court held that transitional protections,
afforded to older members when the reformed schemes were introduced in 2015, constituted unlawful
age discrimination. It is expected that the ruling will result in a liability to CQC. The Government
Actuarial Department (GAD) has estimated the financial impact of one possible remedy to be equal to
3.2% of active liabilities on a scheme-wide basis. The GAD estimate has been prepared on an ‘average’
member basis and is highly sensitive to the earnings growth assumption. Taking into account the age
profile of CQC membership, the impact is not expected to be significant. Therefore, no specific
provision for the potential additional liabilities arising from McCloud have been accounted for.

6. Intangible Assets
IT software Software
development licences Website Total
£000 £000 £000 £000

Cost or valuation
At 1 April 2018 38,849 3,923 7,696 50,468
Additions 6,570 13 119 6,702
Disposals – – – –
Impairments charged to revaluation reserve (64) – – (64)
(Impairments) and reversals charged to other (1,629) – 6 (1,623)
operating expenditure
Indexation gains to revaluation reserve 195 22 38 255
At 31 March 2019 43,921 3,958 7,859 55,738

Amortisation
At 1 April 2018 30,305 3,174 6,314 39,793
Charged in year 4,278 506 407 5,191
Disposals – – – –
Impairments charged to revaluation reserve (53) – – (53)
(Impairments) and reversals charged to other (713) – 1 (712)
operating expenditure
Indexation gains to revaluation reserve 156 18 34 208
At 31 March 2019 33,973 3,698 6,756 44,427

Net book value at 1 April 2018 8,544 749 1,382 10,675

Net book value at 31 March 2019 9,948 260 1,103 11,311

Asset financing
Owned 9,948 260 1,103 11,311
At 31 March 2019 9,948 260 1,103 11,131
 IT software Software
development licences Website Total
£000 £000 £000 £000
Cost or valuation
At 1 April 2017 34,701 3,860 6,291 44,852
Additions 3,628 4 1,314 4,946
Disposals – – – –
Indexation gains charged to other operating (12) – (6) (18)
expenditure
Indexation gains to revaluation reserve 532 59 97 688
At 31 March 2018 38,849 3,923 7,696 50,468

Amortisation
At 1 April 2017 24,201 2,420 5,504 32,125
Charged in year 5,737 717 726 7,180
Disposals – – – –
Indexation gains charged to other operating – – – –
expenditure
Indexation gains to revaluation reserve 367 37 84 488
At 31 March 2018 30,305 3,174 6,314 39,793

Net book value at 1 April 2017 10,500 1,440 787 12,727

Net book value at 31 March 2018 8,544 749 1,382 10,675

Asset financing
Owned 8,544 749 1,382 10,675
At 31 March 2018 8,544 749 1,382 10,675

Intangible assets comprise software licences, software development costs, including related contractor
costs, and website development costs. These are revalued using the appropriate producer price index
(PPI) published by the Office for National Statistics. Related general project management and
overhead costs are not capitalised.

6.1 Movement in revaluation reserve: intangible assets

2018/19 2017/18
£000 £000

Balance at 1 April 377 644

Net gain on indexation of intangible assets 47 200
Impairments charged to reserve (11) –
Transfers between reserves for intangible assets (241) (467)
Balance at 31 March 172 377
7.  Property, plant and equipment
Information Furniture
technology and fittings Total
£000 £000 £000

Cost or valuation
At 1 April 2018 9,477 2,897 12,374
Additions 3,153 457 3,610
Disposals (1,147) – (1,147)
Impairments transferred to other operating expenditure (57) (15) (72)
Impairments transferred to revaluation reserve – (12) (12)
Indexation gains to revaluation reserve 32 – 32
At 31 March 2019 11,458 3,327 14,785

Depreciation
At 1 April 2018 6,529 1,943 8,472
Charged in year 1,110 550 1,660
Disposals (1,142) – (1,142)
(Impairments) and reversals transferred to other operating 1 (1) –
expenditure
Impairments transferred to revaluation reserve – (8) (8)
Indexation gains to revaluation reserve 28 – 28
At 31 March 2019 6,526 2,484 9,010

Net book value at 1 April 2018 2,948 954 3,902

Net book value at 31 March 2019 4,932 843 5,775

Asset financing
Owned 4,932 843 5,775
At 31 March 2019 4,932 843 5,775
 Information Furniture
technology and fittings Total
£000 £000 £000
Cost or valuation
At 1 April 2017 7,480 2,757 10,237
Additions 2,634 137 2,771
Disposals (687) (14) (701)
Indexation gains charged to other operating expenditure (50) 4 (46)
Indexation gains to revaluation reserve 100 13 113
At 31 March 2018 9,477 2,897 12,374

Depreciation
At 1 April 2017 6,100 1,442 7,542
Charged in year 1,037 485 1,522
Disposals (687) 8 (679)
Indexation gains charged to other operating expenditure – 1 1
Indexation gains to revaluation reserve 79 7 86
At 31 March 2018 6,529 1,943 8,472

Net book value at 1 April 2017 1,380 1,315 2,695

Net book value at 31 March 2018 2,948 954 3,902
Asset financing
Owned 2,948 954 3,902
At 31 March 2018 2,948 954 3,902

Property, plant and equipment are valued using the appropriate producer price index (PPI) published
by the Office for National Statistics.

7.1 Movement in the revaluation reserve: property, plant and

equipment
2018/19 2017/18
£000 £000
Balance at 1 April 109 112
Net gain on indexation 4 27
Impairments charged to reserves (4) –
Transfers between reserves (24) (30)
Balance at 31 March 85 109
8. Financial instruments
Liquidity risk
CQC’s cash requirements are met through annual registration fees charged to providers and grant-in-aid
from DHSC. The fees scheme published in April 2018 sets fees for most sectors at full chargeable cost
recovery, which results in the fees paid by providers becoming the main source of funding for CQC.
CQC manage liquidity risk through regular cash flow forecasting to ensure that enough funds are
available to cover working capital requirements. CQC have no borrowings relying upon the collection
of fees and grant-in-aid from DHSC to cover cash requirements.

Credit risk
Credit risk arises from cash and cash equivalents and accounts receivable. Management monitors the
collection of fees closely and all undisputed debts that have reached 61 days past due, and where
internal recovery processes have been exhausted, are sent to an external debt collection company.
The maximum exposure to credit risk at the reporting date is the fair value of each of the receivables
mentioned above. CQC does not hold any collateral as security.

Market risk
CQC is not exposed to currency or commodity risk. All material assets and liabilities are denominated in
sterling. With the exception of cash and cash equivalents, CQC have no interest-bearing assets or
borrowing subject to variable interest rates. Income and cash flows are largely independent of changes
in market interest rates.

8.1  Financial assets

31 March 31 March
2019 2018
£000 £000

Trade and other receivables with DHSC group bodies 1,852 669
Trade and other receivables with other bodies 11,476 7,533
Cash at bank and in hand 34,770 36,959
Total 48,098 45,161

8.2  Financial liabilities

Restated
31 March 31 March
2019 20181
£000 £000

Trade and other payables with DHSC group bodies 1,719 2,292
Trade and other payables with other bodies 9,618 9,620
Other financial liabilities 25,450 28,471
Total 36,787 40,383
1
2017/18 balances have been restated to ensure compliance with the FReM.
9.  Trade receivables and other current assets
Re-presented
31 March 31 March
2019 20181
£000 £000

Trade and other receivables

Contract receivables 14,311 –
Trade receivables – 8,225
Other receivables 1,913 876
Expected credit loss (3,007) –
Irrecoverable debt provision – (1,707)
Deposits and advances 111 120
Subtotal: Trade and other receivables 13,328 7,514

Other current assets

Prepayments 627 564
Accrued income – 124
Subtotal: Other current assets 627 688
Total 13,955 8,202

There were no amounts falling due after more than one year.
Deposits and advances include advance salary payments and staff loans, these total £10k and £101k
(31 March 2018: £13k and £107k). Staff can apply for advance payments on salary and loans up to a
maximum of £5k for rail season tickets.

9.1 Movement in expected credit loss

31 March 31 March
2019 2018
£000 £000

Balance at 1 April 1,707 1,086

Impact of the adoption of IFRS 9 433 –
Lifetime expected credit losses on trade and other receivables 888 –
Changes due to modifications that did not result in derecognition 598 –
Financial assets that have been derecognised (619) –
New provision recognised during the year 2
– 1,368
Provisions reversed as unused 2
– (160)
Amounts written of during the year as uncollectable2 – (306)
Amounts recovered during the year 2
– (281)
Balance at 31 March 3,007 1,707
1
2017/18 balances have been re-presented. See note 14 for details of the impact of new accounting standards.
2
Movements resulting from accounting policies prior to the adoption of IFRS 9.
10.  Cash and cash equivalents
2018/19 2017/18
£000 £000

Balance at 1 April 36,959 27,559

Net change in cash and cash equivalent balances (2,189) 9,400
Balance at 31 March 34,770 36,959

The following balances at 31 March were held at:

Government banking service and cash in hand 34,770 36,959
Total balance at 31 March 34,770 36,959

11.  Trade payables and other current liabilities

31 March 31 March
2019 2018
£000 £000

Amounts falling due within one year

VAT (370) (178)
Other taxation and social security (4,371) (3,813)
Trade payables (6,724) (5,846)
Other payables (3,606) (4,186)
Accruals (10,845) (9,472)
Capital creditors – intangible assets (821) (678)
Capital creditors – property, plant and equipment (186) (1,202)
Total trade and other payables (26,923) (25,375)
Current pension liabilities (21) (93)
Fee income in advance (20,619) (24,312)
Total current trade payables and other current liabilities (47,563) (49,780)

Amounts falling after more than one year

Pension liabilities (69) (75)
Total non-current trade payables and other non-current liabilities (69) (75)

Trade payables at 31 March 2019 were equivalent to 26 days (31 March 2018: 26 days) purchases,
based on the daily average amount invoiced by suppliers during the year. For most suppliers no
interest is charged on the trade payables for the first 30 days from the date of the invoice. Thereafter
interest is charged on the outstanding balance at various interest rates.
Trade payables falling due after more than one year have been reduced by a discount factor of 0.29%
per annum (2017/18: 0.10%) in accordance with HM Treasury guidance.
12.  Provisions for liabilities and charges
2018/19 2017/18
Leased Leased
property property
dilapidations Other Total dilapidations Other Total
£000 £000 £000 £000 £000 £000

Balance at 1 April 2,338 434 2,772 1,432 406 1,838

Provided in year – 437 437 1,326 434 1,760
Provisions not required (24) (357) (381) (373) (292) (665)
written back
Provisions utilised – (77) (77) – (114) (114)
in year
Change in discount rate (59) – (59) (10) – (10)
Unwinding of discount (49) – (49) (37) – (37)
Balance at 31 March 2,206 437 2,643 2,338 434 2,772

12.1  Analysis of expected timings of discounted cash flows

2018/19 2017/18
Leased Leased
property property
dilapidations Other Total dilapidations Other Total
£000 £000 £000 £000 £000 £000

Not later than one year 293 437 730 317 434 751
Later than one year and 1,913 – 1,913 2,021 – 2,021
not later than five years
Later than five years – – – – – –
Balance at 31 March 2,206 437 2,643 2,338 434 2,772

Leased property dilapidations are the costs that would be payable on the termination of the leases.
Other provisions include legal costs relating to tribunals and judicial reviews estimated at £0.4m
(31 March 2018: £0.4m).
No provisions were recognised in respect of employment termination costs (31 March 2018: £nil).
Provisions falling due up to five years have been discounted by a factor of 0.76% (2017/18: increase
of 2.42%) and provisions falling due between five and 10 years have been discounted by a factor of
1.14% (2017/18: increase of 1.85%) in accordance with HM Treasury guidance.
13. Reconciliation of movements in the Statement of
Cash Flows
13.1  Adjustment for non-cash transactions
2018/19 2017/18
Note £000 £000

Depreciation, amortisation and impairment charges 4.2 7,834 8,767

Increase in provision for pension fund deficit 4.1 621 1,098
Net interest expenses on pension scheme assets and liabilities 4.2 1,780 1,729
Gain on disposal of fixed assets 3.2 (61) –
Loss on disposal of fixed assets 4.2 – 22
Provisions expense 4.2 (3) 1,085
Finance expense: Unwinding of discount on provisions 12 (49) (37)
Total adjustment for non-cash transactions 10,122 12,664

13.2  Movement in trade and other payables

2018/19 2017/18
Note £000 £000

Increase in trade and other payables 11 1,548 2,404

Less increase in capital creditors – intangible assets 11 (143) (129)
Less decrease/(increase) in capital creditors – property, plant and 11 1,016 (599)
equipment
Total movement in trade and other payables 2,421 1,676

13.3  Purchase of intangible assets

2018/19 2017/18
Note £000 £000

Additions 6 (6,702) (4,946)

Increase in capital creditors – intangible assets 11 143 129
Total purchase of intangible assets (6,559) (4,817)

13.4  Purchase of property, plant and equipment

2018/19 2017/18
Note £000 £000

Additions 7 (3,610) (2,771)

(Decrease)/increase in capital creditors – property, plant and equipment 11 (1,016) 599
Total purchase of property, plant and equipment (4,626) (2,172)
13.5  Proceeds from disposal of property, plant and equipment
2018/19 2017/18
Note £000 £000

Profit on disposal of property, plant and equipment 3.2 61 –

Information technology disposals: gross value 7 1,147 –
Less information technology disposals: accumulated depreciation 7 (1,142) –
Total proceeds from disposal of property, plant and equipment 66 –

14. Changes in accounting standards

This note explains the impact of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue
from Contracts with Customers on CQC’s financial statements.

14.1 Impact on the financial statements

In accordance with the DHSC GAM, the option to restate using IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors has been withdrawn. The reclassifications and the adjustments
arising from the new accounting standards are therefore not reflected in the Statement of Financial
Position as at 31 March 2018 but are recognised in the opening Statement of Financial Position as at
1 April 2018.
The following table shows the adjustments recognised for each individual item line that is impacted by
the adoption of IFRS 9 and IFRS 15.
Re-presented
carrying
amount at Reclassifications Remeasurements Revised
31 March 20181 IFRS 15 IFRS 9 1 April 2018
£000 £000 £000 £000

Current assets
Trade and other receivables 7,514 124 (433) 7,205
Other current assets 688 (124) – 564

Taxpayers’ equity
General reserve (80,007) – (433) (80,440)
1
The carrying amounts as at 31 March 2018 have been re-presented, see note 14.4.

14.2 IFRS 9 Financial Instruments

IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement
of financial assets and financial liabilities, derecognition and impairment of financial assets.
The adoption of IFRS 9 resulted in changes to accounting policies, see note 1.17, and remeasurement
of the trade and other receivables carrying amount, see note 14.4 for further details.
14.3 IFRS 15 Revenue from Contracts with Customers
The adoption of IFRS 15 has resulted in changes in accounting policies, see note 1.5. This has not
required any adjustments to the recognition of revenue however note 14.4 details the reclassifications
required to trade receivables and other current assets.

14.4 Impact on trade receivables and other current assets

The table shows the adjustments and reclassifications recognised following the adoption of IFRS 9 and
IFRS 15 on the opening balances.
Carrying
amount at Reclassifications Remeasurements Revised
31 March 2018 IFRS15 IFRS9 1 April 2018
£000 £000 £000 £000

Trade and other receivables

Trade receivables 6,518 (6,518) – –
Contract receivables – 7,710 – 7,710
Other receivables 876 638 – 1,514
Irrecoverable debt provision – (1,706) 1,706 –
Expected credit loss – – (2,139) (2,139)
Deposits and advances 120 – – 120
Subtotal: Trade and other 7,514 124 (433) 7,205
receivables
Other current assets
Prepayments and accrued 688 (688) – –
income
Prepayments – 564 – 564
Subtotal: Other current assets 688 (124) – 564
Total 8,202 – (433) 7,769
15.  Movements on reserves
Retained
General Revaluation earnings
reserve reserve reserve Total
£000 £000 £000 £000

Balances at 31 March 2017 (81,649) 756 8,000 (72,893)

Increase/(decrease) in the year 1,642 (270) 7,500 8,872
Balances at 31 March 2018 (80,007) 486 15,500 (64,021)
Decrease due to adoption of IFRS 9 (433) – – (433)
Balances at 1 April 2018 (80,440) 486 15,500 (64,454)
Increase/(decrease) in the year 11,015 (229) 6,950 17,736
Balances at 31 March 2019 (69,425) 257 22,450 (46,718)

General reserve
The general reserve reflects the total assets less liabilities of CQC which are not assigned to another
special purpose reserve.

Revaluation reserve
The revaluation reserve is a capital reserve used when an asset has been revalued but for which no
cash benefit is received. Revaluations are completed periodically to reflect the fair value of an asset
owned by an organisation.

Retained earnings reserve

The retained earnings reserve was initially created during 2016/17 to reflect the recovery of
amortisation and depreciation as an element of the fees charged to providers.
A further transfer of £6,950k this year reflects the depreciation, amortisation and impairments relating
to assets that support the regulatory functions where costs can be recovered from providers.
In agreement with DHSC this reserve can only be used in future years to fund appropriate capital
expenditure not separately financed by DHSC, to fund improvements to the regulatory regime or
returned to fee payers through lower future fees.
16. Capital commitments
Contracted capital commitments at 31 March 2019, not otherwise included within these financial
statements:
31 March 31 March
2019 2018
£000 £000

Intangible assets 2,654 1,405

Property, plant and equipment 502 313
Total 3,156 1,718

17. Commitments under operating leases

Total future minimum lease payments under operating leases are given in the table below for each of
the following periods.
31 March 31 March
2019 2018
£000 £000

Buildings
Not later than one year 4,072 5,464
Later than one year and not later than five years 3,270 8,207
Later than five years – –
Total 7,342 13,671

Other
Not later than one year 49 63
Later than one year and not later than five years 91 139
Later than five years – –
Total 140 202

CQC leases buildings for its own use as office space under memorandum of term occupancy (MOTO)
agreements. The obligations include any contingent rent implicit in the agreements.
There were no future minimum lease payments due under finance leases at the Statement of Financial
Position date (31 March 2018: none).
18. Other financial commitments
CQC has entered into non-cancellable contracts which are not operating leases or capital
commitments. The total payments to which CQC is committed are as follows:
31 March 31 March
2019 20181
£000 £000

Not later than one year 21,031 22,703

Later than one year and not later than five years 18,598 7,732
Later than five years – –
Total 39,629 30,435
1
2017/18 balances not previously disclosed.

19. Contingent liabilities

CQC has the following contingent liabilities:
31 March 31 March
2019 2018
£000 £000

Backdated VAT charges 640 639

Employment tribunals and legal advice 339 631
Total 979 1,270

Due to the nature of the contingent liabilities it is difficult to accurately determine the final amounts
due, and when they will become payable.
CQC is subject to an ongoing HMRC compliance check in relation to employees who may have more
than one permanent workplace. This may result in a backdated benefit-in-kind liability relating to
travel expenses paid or reimbursed to these employees. At 31 March 2019 it was unclear how
employees meet the criteria for having more than one permanent workplace, and therefore it has not
been possible to quantify a possible liability.

20. Related party transactions

CQC is a non-departmental public body sponsored by DHSC. DHSC is regarded as a related party. During
the year CQC has had a significant number of material transactions with DHSC, and with other entities
for which DHSC is also regarded as the parent department including NHS England, NHS foundation
trusts, NHS trusts, NHS special health authorities and other non-departmental public bodies.
In addition, CQC had a significant number of transactions with other government departments and
other central and local government bodies. Most of these transactions have been with the Department
for Business, Energy and Industrial Strategy in respect of rent for office space. CQC also had amounts
owed to the NHS Pension Scheme and other government departments including HMRC.
During the year there were no material transactions with organisations in which members of the Board,
key managers or other related parties hold an interest.

21. Events after the reporting period date

Events after the reporting period are considered up to the date on which the Financial Statements are
authorised for issue.
There were no significant events after the reporting date that would require adjustment.

22. Authorised date for issue

CQC’s Annual report and accounts are laid before Parliament. The Financial Statements were
authorised for issue on 19 July 2019 by the Chief Executive as Accounting Officer.
How to contact us
Call us on: 03000 616161
Email us at: enquiries@cqc.org.uk
Look at our website: www.cqc.org.uk
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Care Quality Commission
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Please contact us if you would like a summary of this report in another language or format.
CQC-445-20-APS-072019

ISBN: 978-1-5286-1521-1
ID: CCS0619531556 07/19