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

From 12 February 2018 we are introducing a more consistent and proportionate way of assessing the financial viability of providers applying for registration – although this only applies to some providers.

This follows extensive engagement with our stakeholders, including providers. We will seek assurance in the form of a statement letter from a financial specialist. This could be an accountancy, bank or financial services firm.

What is this guidance?

This is new registration guidance; the assessment of the applicants’ financial viability (under Regulation 13 of the CQC (Registration) Regulations 2009) takes place at the point of registration application. We have introduced this new streamlined method of assessing compliance with Regulation 13 because providers applying for registration told us that they were not always clear about what they need to provide to demonstrate their compliance with Regulation 13, and that this had led to delays in registration applications.

Who does it apply to?

The new approach will apply to new providers submitting a new registration application. Existing providers applying to remove or vary a condition, add a location or add a regulated activity are not generally required to submit a statement. However, it may also apply to some existing providers seeking to make changes to their registration (for instance for increases in scale or when we have intelligence that suggests a provider does not have the financial standing to provide the services set out in their Statement of Purpose).

NHS Trusts and local authorities are exempt from the requirement (as set out in Regulation 13 of CQC Registration Regulations 2009). Adult social care providers currently in the Market Oversight Scheme will not be required to provide a letter; this is because our Market Oversight colleagues monitor the financial sustainability of these providers.

Evidence on an NHS contract provides sufficient assurance and we will not require the following providers to submit a statement letter:

• NHS GP practices
• NHS dentists
• NHS 111, out of hours and urgent care services
• Non-NHS organisations with NHS contracts

More information and supporting guidance

The guidance for providers is available on the registration pages of our website.

We have produced a template of the statement letter which is available below. We recommend that applicants use this template as it clearly explains to the financial specialist what is being requested and why, under the regulations.

Statement of financial viability: letter template

Applicants do not have to use our template, but it will help make sure the information required is included. In exceptional cases we will consider other third party evidence such as a guarantee from an investor or shareholder. The application cannot be approved until assurance has been received.

Assessing the financial viability of a provider is an important part of our registration assessment. We believe this new approach is more consistent and proportionate. If we have any particular concerns about financial viability we may ask for further evidence during our assessment.