A review of the Fit and Proper Persons Test

A review of the Fit and Proper Persons Test

On 6 February 2019, the Government published Tom Kark QC’s report of his review of the “Fit and Proper Persons Test” (FPPT).

Tom Kark QC was commissioned in July 2018 by the Minister of State for Health (at that time, Stephen Barclay MP) to review and make recommendations in relation to the FPPT. The purpose of the review, as described by Tom Kark himself, was to “focus upon the FPPT, to determine whether or not in its current form it is working, and how it might be adapted to ensure better leadership and management and prevent the employment of directors who are incompetent, misbehave or mismanage”.

What is the FPPT?

The FPPT was introduced on 27 November 2014 for NHS Trusts and Foundation Trusts under Regulation 5 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014.

It applies to directors and “equivalents”, although the Care Quality Commission (CQC) guidance states that this is limited to executive, non-executive, interim and associate directors only and is intended to ensure NHS Trusts seek the necessary assurances that all executive and non-executive directors (or equivalent post holders) are suitable and fit to undertake the responsibilities of their role.

In summary the FPPT means that NHS Trusts cannot appoint, or have in place, a director unless they:

  • are of “good character” – this is subjective but requires consideration of past criminal convictions and removals from professional registers. These must be considered but are not an absolute barrier to appointment. Regulation 5(3)(a) & Schedule 4, Part 2
  • have the qualifications, competence, skills and experience which are necessary for the relevant office or position or the work for which they are employed. Regulation 5(3)(b)
  •  are able by reason of their health, after reasonable adjustments are made, of properly performing tasks which are intrinsic to the office or position for which they are appointed or to the work for which they are employed. Regulation 5(3)(c)
  •  have not been responsible for, privy to, contributed to or facilitated any serious misconduct or mismanagement (whether unlawful or not) in the course of carrying on a regulated activity or providing a service elsewhere which, if provided in England, would be a regulated activity. Regulation 5(3)(d)
  •  are an undischarged bankrupt, have an undischarged sequestration award in respect of their estate, are subject to a bankruptcy restrictions or interim bankruptcy restrictions order, a person to whom a moratorium period under a debt relief order applies, are included on the children’s or adults’ barred list or are prohibited from holding the relevant office or position by or under any enactment. Regulation 5(3)(e) & Schedule 4, Part 1

What issues came to light in the review?

Tom Kark concluded that the FPPT essentially “does not ensure directors are fit for the post they hold, and it does not stop the unfit or misbehaved from moving around the system”. The review summarises some of the main issues with the current FPPT which have led to a general recognition that the test has not been fully effective:

  • Parts of the current test are difficult to understand, including important considerations such as whether a director is competent, experienced and has the requisite qualifications for the role
  • The “good character” requirement is subjective and the guidance from the CQC on how to assess whether someone is of good character is broad
  • The lack of a competency criteria means that whether a director’s competency is reassessed, during the course of their career, will depend entirely on the vigour of the Chair, Chief Executive or HR Director. In contrast, other parts of the test have been applied vigorously in relation to convictions, bankruptcy and DBS checks
  • The CQC, in general, regulates organisations and not individuals. This means that it will undertake “Well-Led” reviews of Trusts where it will examine the Trust’s process for assessing whether a director is a fit and proper person, but it will not look at the quality of the individual nor whether they are in fact a fit and proper person for the role in which they have been employed. The level and quality of the information retained on each director and specifically in relation to the FPPT also varies significantly between each Trust
  • Trusts have been missing out on a vital opportunity to share important information relating to candidates. There is currently no central database meaning that each Trust needs to collate information on the potential director (or equivalent) and conduct the FPPT afresh
  • Employment references can be lacking in important information. These references can be especially lacking if there are underlying confidentiality or settlement agreements that mean that the Trust is unable to disclose the full background relating to the director’s previous employment and departure from the Trust
  • There are concerns that directors who have committed serious misconduct are able to obtain director level jobs within NHS Trusts and other organisations because information relating to these individuals is not being shared properly and there is currently no power to disbar a director for misconduct
  • The FPPT is limited in application to providers in England only. This means that directors who fail the test can still move into director level roles in other jurisdictions
  • There have been concerns that the FPPT has been misused by Trusts who have relied on historic complaints to bolster disciplinary action against a director. In fact, the FPPT can require Trusts to examine and consider previous conduct, performance and complaints that happened many years earlier at other Trusts/organisations, when they do not necessarily have the information to do so.

Recommendations made by the report

  1. All directors (executive, non-executive and interim) should meet specified standards of competence to sit on the board of any health providing organisation. Where necessary, training should be available.
  2. A central database of directors should be created holding relevant information about qualifications and history.
  3. There should be a mandatory reference requirement for each director.
  4. The FPPT should be extended to all Commissioners and other appropriate Arms-Length Bodies (including NHSI and NHSE).
  5. There should be the power to disbar directors for serious misconduct.
  6. In relation to Regulation 5(3)(d) of the Regulations (relating to serious misconduct or mismanagement), the words “been privy to” should be removed.
  7. Further work should be done to examine how the test works in the context of the provision of social care and whether any amendments are needed to make the test effective.

The Future

In response to the review, Health and Social Care Secretary Matt Hancock announced that the Government would be accepting two of the seven recommendations (recommendations 1 and 2) made by the Kark review. This includes introducing new minimum competency standards and the establishment of a central database holding information relating to senior NHS managers’ qualifications and previous employment history. This database would also hold employment information relating to previous disciplinary and grievance issues. It is important that NHS bodies watch out for the implementation of these recommendations so that their existing policies and procedures can be updated to reflect the changes.

Despite Tom Kark’s recommendation that directors who are guilty of misconduct should be disbarred, the Government have delayed making a decision on the introduction of an NHS management regulator. Mr Hancock stated that although he could see the attraction of this proposal it was also important to “encourage more people and people of great calibre into positions of leadership within the NHS. So, getting the balance right so that this strengthens the system and encourages people in” is the focus.

The above recommendations will now be considered as part of a wider workforce review led by NHS Improvement. Hempsons will provide updates on the review process in future publications.