We are primarily funded through fees charged to registered providers, with DHSC providing grant-in-aid for expenditure for which we are unable to charge fees.
In 2019/20 our fees made up 88% of our income, with 11% from grant-in-aid (GIA), and the remaining 1% coming from other external sources.
2019/20 was the first year that we were at ‘full chargeable cost recovery’, a journey that began in 2015/16. Before this point our regulatory work was partially funded by DHSC GIA, whereas in 2019/20 all expenditure for regulatory work was recovered through provider fees.
Following a period of incremental changes, in 2019 we decided to provide stability on the fees we charge and keep the existing fee scheme in place for 2020/21.
The end of the financial year started to see the impact of COVID-19 on providers. While our fees have remained applicable, we have aimed to ensure that we provide support for those providers who are experiencing financial difficulties. Furthermore, we’re ensuring that providers who are making temporary registration changes in response to COVID-19 do not see an increased fee as a result.
What we received
Our income is broken down into the following sectors:
- Fee income: £204.0m
- Reimbursement for services and other income: £2.7m
- Revenue grant-in-aid from the Department of Health and Social Care (DHSC): £25.5m
Fee income by sector:
- NHS trusts: £56.5m
- Adult social care – residential: £67.7m
- Adult social care – community: £22.9m
- Independent health care – hospitals: £3.8m
- Independent health care – community: £6.9m
- Independent health care – single speciality: £0.9m
- Dentists: £8.0m
- NHS GP practices: £37.3m
Grant-in-aid received from DHSC relates to areas and activities such as Enforcement, Mental Health Act, Healthwatch England, Market Oversight, and the National Guardian’s Freedom to Speak Up Office.
What we spent
In 2019/20 our revenue expenditure (excluding non-cash items – see note 2.2 to the financial statements) was £221.6 million, with further capital investment of £13.5 million.
Our expenditure enabled us to carry out our regulatory duties and implement the first phase of a multi-year transformative change programme of investments, the benefits of which will ensure that our regulation is smarter, reducing the burden on providers and driving out a more economical use of our operating budget.
Our focus in year has been on improving our IT to make it easier for people to do their jobs. This includes requirements such as improved connectivity, rollout of smartphones for our mobile workforce, the implementation of Office 365 and a major programme of work to transition to a new IT managed service solution.
We have also begun work to consider future ways of regulating and working that will enable us to deliver our strategy as effectively and efficiently as possible.
Our revenue expenditure in 2019/20 (excluding non-cash items) reduced by £6.1 million compared with 2018/19. The main drivers for this were savings achieved through our improved connectivity such as travel and subsistence (£2.4m) and meeting room hire (£0.4m) as well as further reductions on our estate costs from 2018/19 (£1.4m) and the release of prior year accruals for disputed rental costs (£1.6m). Our capital expenditure in 2019/20 increased by £3.2 million compared with 2018/19 as our transformation programme increased in pace.
| 2018/19 | 2019/20 | |
|---|---|---|
| Registration | 10% | 8% |
| Monitoring | 35% | 27% |
| Inspection | 41% | 50% |
| Enforcement | 3% | 3% |
| Independent Voice | 3% | 2% |
| Other Non Chargeable | 8% | 9% |
Our expenditure was incurred on the following areas:
- Permanent Staff: £164.0m
- Premises and Business Rates: £5.4m
- Other Staff: £10.2m
- Experts by Experience: £3.7m
- Establishment: £19.3m
- Consultancy/Legal Fees: £1.4m
- Travel and subsistence: £9.3m
- Training and development: £1.4m
- Rentals under operating leases: £3.5m
- Other Costs: £3.4m
Ian Trenholm
Chief Executive,
Care Quality Commission
26 January 2021