How is the CQC facilitating the government’s growth agenda?

In December 2024, the government wrote to 17 regulators asking them to identify opportunities to improve regulation to enable economic growth, with a view to backing the government’s growth agenda.

The 17 regulators included the likes of the Financial Conduct Authority (“FCA”), the Health and Safety Executive (“HSE”) and Ofgem. Notably, the Care Quality Commission (“CQC”) and Ofsted were not among them.

The letter to the regulators noted that the government was “determined that…every regulator should prioritise growth.” Each was asked to propose five measurable commitments or changes that their organisation could implement in the next year, within a tolerable level of risk. The government referred to concerns that UK regulators and regulations inhibit private sector investment and hold back growth.

According to “Industries in the UK,” a briefing published by the House of Commons Library in October 2024, the health and social care industry was the joint fifth largest industry (along with Professional and Technical) in terms of economic output in the UK in 2023 and only 0.5% behind the Finance and Insurance Industry which contributed £208.2 billion. Health and social care was also the industry with the most jobs available as of March 2024.

So, whilst the government may not have asked the question, how is the CQC contributing to the growth agenda?

Market entry for new Healthcare providers

The backlog of CQC registrations has been well publicised. Providers must be ready to start carrying out the regulated activity at the point they make their application, meaning an up-and-running property, team of staff and sufficient insurance, policies and procedures. Start-up costs are high and often involve loans and finance. If a provider must then wait 12 weeks or more before they are registered, then significant costs will accumulate long before the first paycheck arrives.

The latest CQC board report demonstrates an improving picture, but there were still over 30% of applications in the system in March 2025 are over 10-weeks old. On 8 July, the CQC announced that “targeted work” was underway to improve processes for registration for homecare providers only.

The CQC’s registration team has reverted to the legacy CRM system in response to significant criticism, but this short-term workaround doesn’t remove the need for a more comprehensive overhaul of their IT systems. This will go some way to improving efficiency, allowing more quality providers to enter the market.

CQC inspection business model

Since the CQC moved from timetabled to concern-based inspections, providers are often stuck without-dated ratings. Ratings of “Requires Improvement” and “Inadequate” damage reputations and have a negative commercial impact. The CQC may inspect a provider due to concerning information, but those providers who are doing well or have made significant improvements may have to wait longer for an updated rating.

The number of providers rated “Requires Improvement” or “Inadequate” is increasing. As of 8 May 2025, 18.6% of care homes have an overall rating of Requires Improvement and 1.3% have an overall rating of Inadequate. Some homes have not been inspected since 2016. When you compare these percentages against those for inspection reports published in 2025 (as of 8 May 2025), 35.7% of care homes are rated Requires Improvement, whilst 7.7% are rated Inadequate.

Whilst ratings must accurately reflect the service being provided, if there is not an opportunity to showcase positive services then this is not going to encourage either new entrants to the market, or existing participants to expand.

According to the CQC March Board report, the average age of a rating is 4 years and 1 month. The average age of a Requires Improvement rating is 2.1 years and 1.2 years for Inadequate. The report showed that the volume of assessments is increasing, with 3,428 assessments conducted since April 2024, against a base line of 16,000. Between April and June 2025, the CQC completed 1,420 assessments, and they have pledged to deliver at least 9,000 assessments across all providers between April 2025 and September 2026.  Whilst this is an improving picture, it is still a long way off target if the regulator is to encourage growth and investment through positive ratings.

Shake-up within the CQC itself

The CQC has been heavily criticised by three main reports over the past year – the Penny Dash report, the Sir Mike Richards Report and the IT Review – for the failures surrounding the launch of the Single Assessment Framework.

The CQC has accepted that it must regain the trust of the sector. Julian Hartley was appointed as Chief Executive in December 2024, and four new Chief Inspectors have been appointed. There has been an overhaul of the CQC Board, with Sir Mike Richards appointed Chair. The CQC has been working with its staff, providers, the public and stakeholders to develop its approach to assessment, although there is no clear timeline on when these changes may be implemented. The CQC must show the sector that tangible improvements are being made and they are moving in the right direction.

Conclusion

So why did the government not ask the CQC to respond to its letter on how it was going to aid growth?  Perhaps because it realised it needed time to rectify problems that have arisen over the past few years.

However, the government’s  10 Year NHS Plan, published on 3 July 2025, included proposed extensions to the CQC’s legal powers and inspection remit, including an extension to the current three-year time  limit from the date of the offence for the CQC to prosecute healthcare providers. Extending the prosecution timeframe will likely create more uncertainty for providers, which is difficult to reconcile with the government’s growth agenda.

The health and social care industry makes a significant contribution to the economy and it’s important that new and existing providers feel empowered to achieve their business goals.