Market participants are being hampered by an inability to efficiently register new owners/managers of care homes via the care quality commission’s (CQC) new regulatory platform. The delay in processing registrations is severely impeding both the buying and selling of care homes. Parties may have agreed on the terms of a sale and exchanged contracts – with completion subject to registration being in place. In our role as an asset manager of care homes and our work with various corporate clients, we're seeing this registration process taking months, causing deals to stall.
IT issues are one of several significant operational issues contributing to the failings at the CQC identified by an interim report issued in July 2024 by the Department of Health and Social Care. These failings have led Wes Streeting, the Secretary of State for Health and Social Care, to declare the CQC ‘not fit for purpose’.
The report highlighted the significant challenges with the provider portal and the regulatory platform. The provider portal started in July 2023 but was not used in significant numbers until April 2024. The regulatory platform started in November 2023 for assessment and included registration and enforcement by April 2024.
Rather than improving processes, these new systems have created significant problems for users, taking up valuable time for staff who would otherwise be delivering care, and causing "considerable frustration".
Prior to April 2024, there was already an increase in the backlog of registration applications. At FYE 31 March 2024, 54% of applications pending completion were more than 10 weeks old, up from 22% the prior year. Since these figures were published, the situation has only got worse.
When calling the helpline, frustrations only grow. Data from the CQC shows that the most common reason for calling is in relation to registration, and that between a quarter and a third of all calls were dropped before they were answered.
The report states that this is a particular problem for small providers trying to set up a new care home, resulting in lost revenues and investment.
The recommendation by the report was that the CQC should set out how, and by when it will make the changes required to the provider portal and regulatory platform. In July 2024, Kate Terroni, the interim chief executive of the CQC said that they were increasing the number of people working in registration and working to fix the provider portal.
However, since then, there has been no meaningful improvement and the latest communication from Terroni on 29 August has not shed any more light on progress, merely saying “our new provider portal hasn’t worked as well as we’d wanted for many of you” and that statutory notifications can be submitted by email.
This doesn't give those having problems with the registration of new entities confidence that progress will be made soon.
It's worth clarifying that registration issues arise where there has been an asset sale and a new owner of the care home needs to be registered with the CQC. Where a transaction involves a share sale only, and the corporate vehicle continues, there is not a requirement to change the registration. However, where applicants are facing registration issues, we recommend the following:
While there's no quick fix, we're seeing that those applicants who make the most ‘noise’ and continue to chase the CQC tend to eventually make the most progress.
One problem with the new portal is that it doesn’t recognise that an applicant might be a manager who's already registered, assuming that all applicants are new. By complaining, applicants are sometimes allowed to submit an old-style application, which can overcome some of these issues. However, whether you can apply in this way seems to be heavily dependent on who you speak to at the CQC, as not everyone is given permission to proceed in this way.
This still uses an old-style form-based application and in our experience seems to be a more efficient method of making progress with registration.
Care home operators may be faced with financial challenges or experiencing stress in the current environment. If you would like to hear about the trends we're seeing in our role as asset manager of care homes, or explore a sale of your care home portfolio, our market leading healthcare team would be happy to talk to you.
For more information and advice, contact Daniel Smith.
