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CQC briefing – New CQC guidance on assessing the financial viability of providers applying for registration

On 12 February 2018 the CQC introduced a new streamlined method of assessing compliance with Regulation 13 CQC (Registration) Regulations 2009. This was the result of engaging extensively with stakeholders.

Pursuant to Regulation 13 Providers are required to take all reasonable steps to meet the financial demands of providing safe and appropriate regulated activities as described in the statement of purpose.

The CQC has produced a template of the letter to be completed and submitted as part of new applications, which can be accessed by clicking here. The letter is to be completed by an accredited financial specialist. The financial specialist must not be a relative or friend of the applicant and must be:

  • A professionally qualified accountant or accountancy company (registered with a recognised accountancy supervisory or qualifying body), or
  • A bank or financial services firm regulated by the Financial Conduct Authority.

In summary, the letter contains a paragraph confirming the applicant is aware that they need to provide the CQC with a statement about their financial standing and reliability and requests the specialist to provide an opinion. The financial specialist may select from two options:

  1. The applicant does have the financial resources needed to provide and continue to provide the services described in the statement of purpose, or
  2. The applicant has not provided sufficient information to choose option a) (for example evidence that additional bank and/or shareholder support is needed).

There is also a space for additional comments, in which the specialist may list the details required to be able to answer a).

The new approach applies to new providers submitting a new registration application. Providers with existing registrations who are simply applying to vary conditions of their registration, or to add locations or regulated activities will not generally be required to submit the letter. However, in circumstances where existing Providers are seeking to make changes to their registration which reflect an increase in scale of operations or indeed where the CQC has received intelligence which suggests that a provider does not have the financial standing to provide the services as described in their statement of purpose, the provider may be required to submit the letter.

For the avoidance of doubt, the following organisations will not be required to submit the letter:

  • NHS Trusts and Local Authorities, by virtue of them being exempt from the requirement
  • NHS GP contracts, NHS dentists, NHS 111 and urgent care services and non-NHS organisations with NHS contracts, as the NHS contract is said to provide sufficient assurance
  • Adult social care providers currently in the Market Oversight Scheme, as Market Oversight colleagues monitor the financial sustainability of these providers

The new method is said to be a more consistent and proportionate way of assessing the financial viability of providers and has been introduced as a result of providers informing the CQC that they were unclear as to what they needed to submit to evidence their compliance with Regulation 13. The CQC recommends that applicants utilise the template as it provides a clear explanation as to what is being requested from the financial specialist and why, under the regulations. Applicants are advised that they are not obliged to use the CQC’s template, but by doing so they will ensure that all the information required is supplied.

The CQC has also noted that in exceptional cases it is fair and reasonable for them to consider other third party evidence such as guarantees from investors or shareholders. Should the CQC have any concerns in relation to financial viability they may ask providers for further evidence, such as a business plan to help with the assessment.

Applicants should note that their applications cannot be approved by the CQC until assurance has been received and as such should bear in mind that failure to comply with the guidance above will undoubtedly cause delays. Applicants should allow plenty of time to get the statement completed and returned.

Our Health and Social Care Providers team is able to advise those wishing to make new provider applications and existing providers wishing to vary their registrations. Should you have any queries in relation to the above please do not hesitate to contact us:

Andrew Parsons
Partner, Head of Healthcare – Providers
T. 020 7227 7282

Holly Bridden

T. 020 7227 7455


This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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