Making difficult decisions doesn’t mean they should be avoided

It is acknowledged that the implications of COVID-19 will be felt for many years. For care services this will be particularly the case.

Currently clients are managing their clinical responses; whether through management of staff, provision of PPE and higher than usual operating costs. It is clear that “business as usual” is unlikely to return for some time; and that public finances will be stretched with more difficult choices to be made in relation to public care services (currently without a longer term coherent plan).

Linked to this will be the currently uncertain outcome of public perception about these services which may lead to demand issues. In the interim clients will be faced with difficult decisions about many aspects of their services and little likelihood of a “business as usual” for the medium term.

For many clients this will mean that some difficult decisions will need to be taken. Both the Care Quality Commission and the Regulator of Social Housing see the preservation of reputation as a key factor to the running of regulated entities; and this can often seem at odds to the prudent management of the business.

The Charity Commission has taken a similar line too; but has also recognised that a difficult but unpopular decision can still be a necessary decision.

This is illustrated in its case report, issued in January this year, in relation to the St Margaret’s Somerset Hospice where it found that trustees complied with their legal duties in making the decision to close its Yeovil in-patient unit and concentrate on out-patient care, despite a well organised social media campaign advocating the ongoing provision of the service.

The reported reasons given by the Hospice for the closure included financial pressure, demand and staff shortages. The compliance report sets out some useful parameters which led the Commission to this conclusion.

It concluded that the Board has:

  • Taken appropriate advice.
  • Consulted with stakeholders and regulators.
  • Followed through these actions by making an informed decision; the minutes were critical in evidencing this.

The Commission concluded that “the decision to re-model the services was properly made and within the range of decisions that a reasonable trustee body could make”. That is to say, it is not for a Regulator to act as a director of the regulated entity but simply to test whether the decision of the regulated entity was justifiable.

In making decisions boards should be guided not only by their duties to their client group, but also the preservation of the solvency of the legal entity. In many cases, there will be grey areas – where some aspects of a service are no longer justifiable to the wider beneficiary class of their clients. In these cases boards need to act swiftly, carefully and in a way which attempts to mitigate the reputational impact.

Examples here are wide ranging and include advice on a Company Voluntary Arrangement concluded by our clients First Priority on its supported housing leases.

For more information in relation to dealing with the implications of COVID-19, please contact Andrew Cowan.

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