Regulatory model including Progressive Licensing scheme for Funeral Directors: report to Scottish Ministers

Regulation and Licensing

37. In order for the bereaved public to be reassured that those who provide funeral services are doing so to an agreed quality standard, that they have a channel to raise significant concerns and that there is appropriate oversight and accountability for these significant care and business responsibilities within communities throughout Scotland, it is the view of the Inspector that a national scheme of licensing for Funeral Directors should be introduced. As set out in paragraph 29 of this report, a baseline of information is required to fulfil these public expectations, coupled with other provisions contained within the primary Act such as a statutory Code of Practice and a programme of inspection and enforcement.

38. The relationship between the component parts of the legislation is critical to ensuring an appropriate and proportionate regulatory model is implemented. As such the remit for the Inspector to report on whether licensing provisions should be recommended by December 2018, being a significant lever for compliance, comes at the end of a period of exploration of the quality standards set out in the Code of Practice and dialogue on the Inspection interface. 

39. In practice however, in order to design and implement an effective inspection and enforcement programme, it is the view of the Inspector that a legal provision of notification of business trading (including all locations) and activities being provided is required. As such, the Inspector has highlighted a programming and assimilation risk of the overall approach. In order to address this risk, it is proposed that the early introduction of a scheme of Progressive Licensing would allow for a minimum base level of information as described to be formally requested. A progressive licensing scheme allows for a phased regulatory intervention over a defined period, with the phasing allowing for sectoral support and business, individual and team understanding of expectations. As a consequence also therefore allowing the Inspectorate to design and implement a resource intelligent and cost effective risk based inspection model making the best use of all available resources within government, the sector and trade organisations. It would also allow any legally prescribed enforcement powers to be enacted as necessary, in the event of significantly poor practice being identified. 

40. This business and activity Progressive Licensing scheme could be implemented alongside the introduction of a statutory Code of Practice for Funeral Directors and regulation to allow for inspection and enforcement under the principal Act. It is anticipated that these three compliance and legislative elements could be developed, consulted upon, designed and implemented in 2019-2020 thus establishing an equal and uniformly applied baseline of regulation.

41. It is therefore the view of the Inspector that this formal scheme of licensing as set out in the Burial and Cremation (Scotland) Act 2016 is required to ensure not only a detailed understanding of the business entities (including trading locations) and activities of funeral providers in Scotland, but also details of the individuals and companies who provide the service, particularly given the extent and significance of change in the sector. 

42. It is recognised however that implementing a licensing scheme is a significant step and requires appropriate consideration of intended outcomes and impacts both in relation to service delivery but also cost. If this recommendation is accepted and approved by Ministers, that this would require a super affirmative Parliamentary process that also would provide an opportunity for further engagement and consultation. The formal scheme of Progressive Licensing would therefore build on and learn from existing models of licensing in Scotland, and would require formal knowledge of the business and activities of the Funeral Director as set out in section 94 of the Burial and Cremation (Scotland) Act 2016. 

43. It is the view of the Inspector that Ministers may wish to consider a Licensing Authority set within the oversight, governance, controls and indemnity of the Scottish Government. Similar examples can be seen with that of the Fish Health Inspectorate and Marine Licensing whereby the Operations Teams within the relevant Scottish Government Directorate oversee the application, grant and management of all applicable licences within defined timescales. Consideration must also be given to Appeals and overall governance, with models elsewhere channelling appeals through the Sheriff Court system. Interestingly, a proposal to set up a Panel or Committee of peer experts to consider matters of professional competence or appeal has been provided by Scottish SAIF. Greater consideration of the benefits and risks of this model would be required, but this does demonstrate a continued desire from the sector to support successful outcomes for the bereaved in Scotland.

44. It is important to also consider the parameters and extent of any scheme of licensing, with respect to applicability and outcomes. As such an integral part of the formal scheme of licensing must be a provision for a business and activity based licence to be linked to a competent person who is the controlling and accountable party. For example in other models of licensing, a designated ‘competent person’ may be required to provide evidence of suitability of professional competence through proven experience or formally required qualifications, designated business management accountabilities, no criminal or corporate concerns e.g. disqualified Directors or convictions for dishonesty, fraud or crimes of a nature incompatible with these services. 

45. It is further considered necessary that the competent person should ensure that all employees who work for them either through formal or flexible contractual arrangements are subject to a basic disclosure check, given their access to arguably vulnerable individuals in their homes, in relation to transaction of a monetary or very sensitive nature, such as taking a loved one into their care or being responsible for the personal effects of a deceased individual. 

46. In order to inform the public and for the bereaved to make choices which are appropriate for them and their loved ones at a time often of significant distress, it is the view of the Inspector that consideration be given to setting up a publicly accessible register of licensed Funeral Directors. This would have a dual role in highlighting those legitimate businesses which were subject to formal and independent inspection and enforcement, but also could be a source to cross reference where services are being provided which are not licensed and are out-with regulatory parameters therefore allowing appropriate action to be taken.  

47. As the work to calibrate operational practice for funeral services in Scotland is in its early stages, it is not considered appropriate at this time to recommend to Ministers to introduce a formal scheme of licensing for individual practitioners – in the first instance licensing should be of businesses and activities. It is rather felt that a period of implementation is required for the statutory Code of Practice, the inspection and enforcement programme and one cycle of the  licensing scheme (for example a three year period). A subsequent evaluation of these three interventions should thereafter be made to inform further decisions to be made as to whether this further stage of individual licensing is necessary. In addition, this evaluation phase will allow for consideration of the impacts of the statutory Code of Practice and the outcomes from the inspection programme to be reviewed and whether any offences under section 96 of the Act have been proven. 

48. This evaluation phase will also allow for detailed consideration as to whether aspects of the statutory Code of Practice need to be ‘harnessed’ to the scheme of licensing by way of a condition of licence. A clear example of where this might be helpful would be in relation to training, where currently it is intended that a threshold of competence is set out by way of a recommendation in the statutory Code of Practice to achieve a defined qualification. 

49. As this is an area which would require significant investment from the sector to achieve and the development of a newly accredited supply chain, it is not considered appropriate to require this compliance at this stage through a licensing condition. However it is recognised that in the future, and in order to continue to reinforce the need for good operational practice, it may be appropriate and proportionate to create that licensing requirement. Similarly, an evaluation phase will allow a detailed review of inspection outcomes, enforcement requirements and where there is evidence of consistent or repeated poor practice, it may be possible to link these outcomes with the management of a licence through condition of grant. 

50. It is recognised that the administration and management of a scheme of licensing is a quasi-judicial function with discretionary powers being afforded to the Licensing Authority, therefore it is imperative that as with other areas of regulatory compliance, a clear articulation of expectations and requirements is set out. This will necessitate internal service design processes being concluded, a clear line of accountability and governance being agreed, and robust, fair and transparent appeals mechanisms in place prior to the launch of any Progressive Licensing scheme. 

51. As such it is helpful at this time to consider internal timescales and resources for implementation of a scheme of licensing. These considerations will then inform the ability to deliver a scheme which robustly meets the expectations of Ministers, if agreed through Parliament, but also for the public to be reassured that the impact on provision of funerals in Scotland will be minimised and for the sector to be comfortable that a fair and transparent process is available to them to ensure they fulfil their statutory obligations. The timescales and sequencing for the recommendations which are set out in this report are based on existing levels of internal and Inspectorate resources.

52. Summary models of the recommendations and scheme is set out below:

Phase 1 – Introduction of a Regulatory Model for Funeral Directors in Scotland 

Timeline for implementation of all three strands 2019-20 

Phase 2 – Integrated Regulatory Model including Progressive Licensing Scheme for Funeral Directors in Scotland 

Time line January 2021-onward 

53. As the initial phase of the model of regulation for Funeral Directors will take an anticipated two year period to implement up to 2020, this should allow for initiation, service design, governance and management structures to be developed and agreed for the internal governmental provision of a Licensing scheme. As this proposed model is based on a higher level of trust with those operating in the sector, this time will also concurrently allow a previously unregulated sector to orientate its activity to ensure on-going compliance and meeting the expectations of the Scottish Government and Inspector through compliance with the statutory Code, responses to the inspection programme and where appropriate trade body support. 

54. Phasing the introduction of the licensing scheme under the Burial and Cremation (Scotland) Act 2016 will also allow for further intelligence gathering and lessons learned to be captured therefore informing and allowing for an intelligent and effective scheme to be introduced minimising the impacts on the bereaved of Scotland. It will also allow a period to determine appropriate levels of cost recovery, and further identification and analysis of the efficient use of collective resources.