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Take care with care services

18 April 16

Registration requirements for care services providers can catch out those seeking to change the legal entity through which they operate

by Alison Cook

Solicitors acting for an individual or body seeking to provide a care service should be aware of the particular legislative requirements regarding registration, particularly on any change in the entity providing the service.

The body in charge of registration is Social Care & Social Work Improvement Scotland, or SCSWIS (known as the Care Inspectorate), the public body responsible, among other things, for the regulation of social care services in Scotland. It was established on 1 April 2011 by s 44(1) of the Public Services Reform (Scotland) Act 2010.

The Care Inspectorate is the statutory successor to the Scottish Commission for the Regulation of Care (the Care Commission), and also took over the functions of the Social Work Inspection Agency and the child protection function of HM Inspectorate of Education (now part of Education Scotland). There are 13 distinct categories of “care service”, the definitions of which are contained in sched 12 to the 2010 Act. They include, for example, care home services, childminding, school care accommodation and support services.

Single route

Section 59(1) of the Act provides: “A person who seeks to provide a care service must apply to SCSWIS for registration of the service”. This means that any person wishing to provide a new care service must apply for registration of that service, as does a different legal person which intends to purchase or otherwise acquire an existing care service from the currently registered provider.

The 2010 Act makes no provision for the transfer or assignation of registration certificates between existing and prospective providers, and the only manner therefore in which a proposed new provider can register with the Care Inspectorate is to make a fresh application under s 59(1).

Whilst the requirement for registration may seem obvious, particularly in the case of first-time registrations, issues can arise when the person holding the registration wishes to create an alternative form of legal entity for the purpose of providing the care service. Examples may include an individual provider of a care home who decides to form a limited company, or an unincorporated association consisting of a group of parents which is registered to provide a day care of children service, and which decides to form a Scottish charitable incorporated organisation (SCIO) to provide the service.

Because of the way in which s 59(1) is drafted, the new legal entity which wishes to provide the care service must make an application to the Care Inspectorate for registration. This is the case even where there are to be no changes either to the way in which the service is managed or staffed, and there is a connection between the person currently registered to provide the care service and the person who wishes to provide the service in future. Unfortunately, this is not always appreciated by care service providers, who sometimes assume that no new application for registration is required where there is a connection between the existing and new provider entities.

For example, an individual provider who wishes to set up a limited company for the provision of a service may assume that since they are to be the sole officer of the proposed new provider company, the company will automatically acquire the existing registration. Likewise, partnerships which are registered to provide care services may in some circumstances be dissolved, such as on the death of a partner. If such circumstances lead to the constitution of a new partnership, that new partnership must apply for registration of the care service in its own right as it is a separate and discrete legal entity from the former partnership.

Charity complication

Particular issues can arise when an organisation which is a registered charity decides to form a SCIO which intends to provide a care service. This is due to the fact that where the charity is a company or registered society, the Office of the Scottish Charity Regulator (OSCR) can convert these into SCIOs. This can occasionally lead to the new SCIO not appreciating the fact that because OSCR and the Care Inspectorate operate under different statutory regimes and policies, it must still make an application to the Care Inspectorate for registration, because it is a different legal entity from the existing registered provider.

This will be the case even if no new charity registration process is required by OSCR, as the Care Inspectorate has no process for converting an organisation into a SCIO as OSCR does. (For further information on OSCR’s change of legal form processes, see www.oscr.org.uk/charities/managing-your-charity/making-changes-to-your-charity)

No shortcuts

The Care Inspectorate is sometimes asked by those who wish to take over the provision of a care service to dispense with the requirement for registration of new, particularly where there is a connection between the existing and proposed new provider entities. However, the Care Inspectorate is bound by the terms of s 59(1) and has no discretion to vary or waive this provision, regardless of the circumstances.

Re-registration/de-registration procedure is relatively common within the Care Inspectorate, and in practice it aims to complete the registration of the new provider simultaneously with the cancellation of the registration of the existing provider. Those advising clients who are purchasing or otherwise acquiring care services, or whose clients wish to create a new entity as a vehicle for the provision of the care service, should note that it can take six months to register a care service (three months in the case of childminding services).*

Applications for registration cannot be backdated, and the Care Inspectorate has no formal procedure in place for applications to be “fast-tracked” (although every effort will be made to complete the registration procedure within the six-month period where possible). It is particularly important for registration applicants to bear this in mind and not to commence provision of the care service prior to registration, since it is an offence under s 80(1)(a) of the 2010 Act to provide a care service while not registered. Of course, it should be noted by way of a caveat that each application for registration will be looked at on its own individual merits. For further information regarding the registration procedure, including details of how to apply online, please visit the Care Inspectorate website (www.careinspectorate.com/index.php/register-a-care-service), telephone 0345 600 9527 or email regenquiries@careinspectorate.com

The Care Inspectorate has a dedicated registration team who can provide advice and support to existing providers who are considering creating a new legal entity to provide the care service. The registration team will work with applicants to ensure their applications are dealt with as efficiently as possible.

*While the Care Inspectorate will seek to deal with all registration applications within six months, there is no applicable statutory time limit. Registration may take longer than six months due to a range of factors, including, for example the late or non-provision of required documents or information by the applicant or third parties, or where the Care Inspectorate deems that additional checks or information are required before it can be satisfied that the statutory test for registration has been met (see s 60(3) of the 2010 Act).

Alison Cook is senior solicitor with the Care Inspectorate
 

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