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Articles 31st Mar 2016

CQC – a drive towards full cost recovery

Currently, the CQC’s regulatory functions are funded by fees paid by providers and by grant-in-aid from the Department of Health. Current Government policy requires CQC to increase the fees it charges to registered providers, so that it can move towards fully recovering the chargeable costs of regulating health and adult social care in England.

Following the Government’s Spending Review, the level of grant-in-aid available to the CQC for 2016/17 is such that in order to fulfil its statutory functions, CQC has had to recommend a two-year period to achieve full chargeable cost recovery for all of the sectors it regulates (except for dental and home care providers).

Fee changes

The amounts charged to providers will differ depending on the cost of regulation in each sector and how close they are currently to full cost recovery.

Here are some examples of the fee changes:

  • £451 increase for a care home with 26-30 residents
  • £573 increase for a single-location community social care provider (such as a home care agency)
  • £58,656 increase for an NHS trust with an income of £125 million to £225 million
  • £1,849 increase for a single-location GP practice with 5,001-10,000 patients

The two sectors furthest from full chargeable cost recovery are NHS GPs and the community social care sector (such as home care agencies). Home care agencies will be subject to fee changes on the basis of a four-year course towards full cost recovery. The Government has recently announced additional funding for GP practices to cover the expense of the required increases to fees in 2016/17.

General dental practices will continue to pay the same fees as they have done in 2015/16 for 2016/17 because the full chargeable cost of their regulation has already been recovered.

It is worth pointing out that, generally speaking, individual fees are no more than 1% of a provider’s turnover and in instances where the provider pays tax the fees are also tax deductible, which reduces the actual increase by the reduction in tax.

In order to assist providers with working out the fees payable for 2016/2017, CQC will publish a calculator on its website (alongside detailed fees guidance).

It is expected that CQC will publish its strategy for the next five years in May 2016 and that will set out how CQC can be an efficient and effective regulator with fewer resources to ensure that providers of services get more value from the work carried out by CQC and sharing data about the quality of services and good practice.

It will be interesting to see what impact these changes will have on the both registered providers and the CQC. If you have any comments or thoughts we would love to hear them.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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