Funeral Director Code of Practice: business and regulatory impact assessment

1 Purpose and Intended Effect

This Business and Regulatory Impact Assessment (BRIA) is concerned with the proposed implementation of a Funeral Director: Code of Practice.

1.1 Background

The Burial and Cremation (Scotland) Act 2016 (‘the 2016 Act’) received Royal Assent in April 2016. It provides a comprehensive legislative framework for burial and cremation in Scotland, and modernises the legislative framework for burial, cremation and funeral arrangements in Scotland, repealing various pieces of antiquated legislation. The BRIA for the Burial and Cremation Bill was published in October 2015.

The development of the 2016 Act is grounded in the findings and recommendations of a number of important reports, including the Burial and Cremation Review Group (2007), the Report of the Infant Cremation Commission (2014) chaired by Lord Bonomy, and Dame Eilish Angiolini’s findings of the National Cremation Investigation (2016). The 2014 and 2016 reports followed investigations into the retrieval of ashes from the remains of infants cremated in Scotland.

The Scottish Government accepted the recommendations^[1], and many of the 2016 Act’s provisions are rooted in their recommendations. For example, recommendation 9 of the Review Group stated that all extant legislation should be repealed and consolidated into a single Act with powers to make subordinate legislation as and when necessary. Additionally, recommendation 13.13 of the Infant Cremation Commission stated that Scottish Ministers should keep the cremation and funeral industries under review and should consider whether further regulation of either is required.

The 2016 Act provides for codes of practice for funeral directors (section 97), burial authorities (section 21) and cremation authorities (section 64), the appointment of inspectors (section 89), an inspection regime for burial authorities, cremation authorities and funeral directors (section 90), and a licensing scheme for funeral directors’ businesses (section 95), as well as the development of regulations as appropriate.

As an example of the latter, the Scottish Government made The Cremation (Scotland) Regulations 2019, which came into force on 4th April 2019. These regulations provide a statutory framework for the management and operation of crematoriums, cremation applications, handling of ashes, etc. The cremation regulations also take account of the recommendations in the Report of the Infant Cremation Commission and the National Cremation Investigation.

1.2 Scope and Context

The Scottish Government estimates there are 500 funeral director businesses in Scotland, with an approximate total of 930 premises.^[2] Large businesses such as Co-operative Funeralcare and Dignity Plc operate the majority of the branches across Scotland.

1.2.1 Funeral Director: Code of Practice

Section 97 of the 2016 Act provides that a funeral director must comply with any code of practice issued by Scottish Ministers about the carrying out of a funeral director’s functions (a “funeral director’s code”).

The Scottish Government has now developed a draft Code, which aims to

• Ensure minimum standards of care of the deceased.
• Establish and promote a common understanding of good practice in relation to care of the deceased.
• By doing so it will also help increase transparency of choice of goods and services to help people in Scotland to make informed decisions.

As per section 97 of the 2016 Act, the Code applies to all funeral directors carrying out the functions of a funeral director in Scotland regardless of where their business is based.

The Code is focused on the procedures for caring for the deceased when in the funeral director’s care and sets out the requirements in that regard. In addition the Code references other existing relevant statutory requirements related to consumer protection^[3], which will help increase transparency of services and the associated costs, estimates, and agreed final bills for goods and services. The Code will be statutory and funeral directors must comply with it where it sets requirements.

The Code has been developed with due regard to the Scottish Regulator’s Strategic Code of Practice. Relatedly, in the context of broader funeral sector regulation, the Code helps fulfil the principles of better regulation, namely that regulation should be transparent, consistent, proportionate, targeted and accountable. The Code makes transparent the minimum standards to which funeral directors will be expected to comply, and the Scottish Government’s work with the funeral director industry has ensured that it is proportionate. The Code will be consistently applied to all funeral directors operating in Scotland, and is targeted only at this sector. Finally, the Code provides a clear basis for holding funeral directors accountable to these standards where requirements are set out as mandatory requirements in the Code; enforcement of compliance with the Code will be implemented in the forthcoming inspection regulations.

The recently published Scottish Government guidance on funeral costs sets out good practice for funeral directors and others in relation to transparency of pricing, helping clients understand costs, the provision of estimates and final bills, and making lower-cost funeral options available. It is distinct from the Funeral Director: Code of Practice.

1.2.2 Forthcoming related regulations

In parallel to the implementation of the Funeral Director Code, Scottish Government is now progressing on the development of the following regulations:

• A statutory inspection regime for the funeral sector, including funeral directors, under section 90 of the 2016 Act,
• A funeral director licensing scheme under section 95 of the 2016 Act,
• Burial regulations, covering private burial, exhumation, restoration of lairs, and management of burial grounds, under Part 1 of the 2016 Act, and
• Regulations for alkaline hydrolysis (‘water cremation’) as an optional alternative to traditional burial or cremation, under section 99 of the 2016 Act

A collection of four public consultations were published on the Scottish Government Citizen Space website between August – November 2023, which sought views on the proposals for the above regulations.

The key connections between the Code and the forthcoming regulations are depicted in Figure 1 below. These focus on the inspection and licensing regimes, which have specific relevance to funeral directors in Scotland. If alkaline hydrolysis regulations are implemented in future, and a funeral director in Scotland establishes themselves as a provider of alkaline hydrolysis, revisions to the Code may be required to reflect the new services funeral directors may be providing.

Figure 1 Key connections between Code and forthcoming regulations

Funeral Director Code of Practice

• Provides minimum standards against which funeral directors will be inspected,
• If non-compliance found, will be the basis for enforcement action under the inspection or licensing regulations

Inspection regulations (section 90 of 2016 Act)

• Set out inspection regime for funeral directors (and burial authorities and cremation authorities)
• Provide detailed framework for inspection, investigations, enforcement and appeals

Funeral director licensing regulations (section 95 of 2016 Act)

• Licencing will be for funeral director businesses only
• Provides accountability: licences can be suspended or revoked if businesses are not compliant with minimum standards

1.2.3 Inspection of funeral directors

In 2017, the Scottish Government appointed Scotland’s first ever Inspector of Funeral Directors^[4], fulfilling important recommendations by the National Cremation Investigation and Infant Cremation Commission (recommendations 13.10 and 13.11). The Inspector undertook a review of the funeral sector in Scotland, and in 2019 published a report discussing a regulatory model for funeral directors. This report included a recommendation for Ministers to introduce and launch a licensing scheme for funeral directors in Scotland. This recommendation was accepted by the then-Minister for Public Health, Sport and Wellbeing.

Further progress was made in December 2020, when the Scottish Government appointed a Senior Inspector of Burial, Cremation, and Funeral Directors and an Inspector of Burial, Cremation and Funeral Directors (replacing the previously separate appointments of Inspector of Cremation and Inspector of Funeral Directors).

1.3 Why is the Code being laid now?

The draft Code has been available on the Scottish Government website since June 2019. Following public consultation and analysis, a revised version was published on January 2023. Funeral directors have been given sufficient time to familiarise themselves with the Code's content and to start working towards meeting its requirements. However the Scottish Government accepts that some funeral directors may not yet have had the opportunity to make necessary changes in order to prepare, or decided not to implement preparations until the Code becomes statutory. If the Code is approved by Parliament, we will therefore provide a period of time (12 months) from the date of approval to enable funeral directors to take steps to ensure their compliance, before formally bringing the Code into force.

The implementation of the Code commences the phased introduction of statutory regulation of the funeral sector under the 2016 Act. The Code is being laid (and if approved, brought into force) in advance of the implementation of the intended funeral sector inspection regime and the funeral director licensing scheme. It is important the Code is in force when the inspection and licensing regulations are laid in Parliament, to provide the minimum, statutory standards against which funeral directors will be inspected (and assessed for suitability for being granted a licence). These interconnections have been described above in Section 1.3.

1.4 Objective

The objective of the Code is to set mandatory minimum standards of quality of care for the deceased. This is intended to have the consequence of ensuring that every person in Scotland will have a dignified and respectful funeral and the public can have higher confidence that good standards of care will be provided.

When grieving the loss of a loved one, arranging a funeral is difficult. When doing so, the vast majority of people in Scotland will engage a funeral director. The role of a funeral director goes beyond arranging and delivering a funeral service. They are expected to advise on a wide variety of statutory requirements and to take care of the deceased in a respectful and dignified manner. Further, they are expected to handle the logistics and administration that arranging a funeral requires, and orchestrate the service that the deceased or bereaved has planned.

The Code will be a key document in the eventual statutory inspection of funeral directors, who will be legally required to meet the standards the Code prescribes. The Code requires funeral directors to adhere to minimum standards in their care of the deceased and, in doing so, it will help to provide transparency in the goods and services offered the bereaved.

The objectives of the Code are aligned with Scotland’s National Performance Framework, which is underpinned by values describing a society characterised by openness and transparency, in which people and organisations treat each other with kindness, dignity, compassion and respect the rule of law. The Code will bring more openness and transparency to the funeral director industry, and help ensure that the dignified treatment of people continues after death.

With respect to Scotland’s National Strategy for Economic Transformation, the Code will contribute in particular to the aim of establishing a culture of delivery and accountability in which objectives are shared and responsibilities are clearly allocated and accepted across the public and private sectors. The Scottish Government is leading the way in establishing a statutory regulatory framework for the funeral director industry, but has done so in collaboration with that industry to ensure any statutory requirements are appropriate, well-evidenced, and fit for purpose. This collaboration has also helped ensure the industry has developed a sense of ownership over, and have accepted accountability for, ensuring their compliance with these minimum standards. As is set out in the below section on consultation, we note the industry’s stated support for the implementation of this Code, and the forthcoming inspection and licensing regulations.

1.5 Rationale for Government Intervention

1.5.1 Legislative responsibility

The Scottish Government continues the work to implement the 2016 Act and we have an opportunity to do so using statutory codes of practice to set clear, transparent minimum standards for the funeral sector.

In implementing the 2016 Act, the Scottish Government intends to, by regulation, establish an inspection regime, which will include the inspection of funeral director businesses. These regulations are being developed under the powers provided in section 90 of the 2016 Act. The Scottish Government’s position is that it is necessary to have clear, transparent standards against which inspections of funeral directors will take place. The Funeral Director Code of Practice is crucial to setting these objective and consistent standards. The importance of clear standards has been reiterated in officials’ discussions with the Inspection Regulations Working Group.

1.5.2 Recommendation by Inspector of Funeral Directors (2019)

In her first annual report, published in August 2019, the Inspector of Funeral Directors reported that there were many areas of common practices prevalent across Scotland. Importantly, the report also highlighted departures from good practice in relation to care of the deceased, record keeping, training and experience of staff, identity checks, authorisation and permissions. Historically there has been no central oversight of funeral directors in Scotland, which may well have contributed to the variation of practices and standards. By setting out standards in the Code that all funeral directors must adhere to, consistent levels of good practice will be created across Scotland.^[5]

1.5.3 Recent trends within the funeral sector

Increased times between the date of death and funeral service have risen steadily over the past 20 years in the UK, from under 10 days to over 3 weeks on average^[6] according to an industry commissioned publication. Greater variety of funeral options now offer a large amount of consumer choice. Styles of funeral have changed, with the demand and levels of personalisation in a funeral growing rapidly. It is also the case that as society continues to change, ‘traditional’ family units and connections may no longer be the norm and funeral directors report that they increasingly witness confusion or disputes amongst families concerning who is authorised to arrange a funeral or apply for the burial or cremation.

These reasons appear to contribute to a deceased person now remaining in the funeral director’s care for a longer period of time than in the past, meaning there is greater opportunity for risks to the care of the deceased to materialise. This reality underscores the importance of making provision for a national code of practice that requires set standards of good practice and procedures from all funeral directors operating in Scotland.

1.5.4 Response to industry feedback

The Scottish Government has considered fully the responses from the 2017 consultation on the proposed inspection regulations and the views expressed, which highlighted the close interaction between the inspection regulations and the Code. Respondents made clear the need for a draft Funeral Director Code of Practice to underpin the wider regulatory framework for funeral directors. The Scottish Government therefore has prioritised the drafting of the Code, ahead of a second consultation on the inspection regulations (published in August 2023), to enable fully informed responses.

We note that while the Code will underpin the inspection regime of funeral director businesses, these businesses will also be inspected against (and required to comply with) any provisions of the 2016 Act, as well as any future regulations or conditions of licence.

1.5.5 Competition and Markets Authority (CMA) Funerals Market Investigation

The CMA’s Funerals Market Investigation sought to investigate prices and quality of funeral services. The investigation was carried out under section 131 of the Enterprise Act 2002, under which the CMA has power to make a market investigation reference. The purpose of the investigation was to ensure that those who purchase funeral services can be confident that prices are reasonable and quality is appropriate. The investigation focused on assessing how people approach the purchase of a funeral, and on competition between funeral directors and crematorium operators. The CMA further considered the geographical concentration of funeral director and crematorium services, price levels over time, and profits. The investigation commenced on 28 March 2019, and was extended for six months in March 2020.

The CMA published its Provisional Decision Report on 13 August 2020, and its final report on 18 December 2020. The coronavirus (COVID-19) pandemic necessarily impacted the funeral sector, and the CMA investigation itself, during the development of its report. Within its interim and final reports, the CMA report expresses serious concerns about the sector. Overall, it observes that most people “find it extremely difficult to engage with the process of purchasing a funeral” (p. 6). Consequently, people will often follow a personal recommendation when choosing a funeral director, or use one that they (or the family) have used in the past. Furthermore, most people incorrectly believe that funeral directors are regulated. The CMA report concluded that the funeral market is not working well, with a number of features that restrict or distort competition. The Scottish Government accepted the overall findings of this report, and supports the measures to improve consumer protection, promote more competition, increase transparency and reduce consumer detriment.

The CMA considered a number of “remedies” to address the issues it identified. The powers to implement the majority of these recommendations, including those related to pricing, are reserved to the UK Government. However, the CMA made a recommendation to establish an independent inspection and registration regime – this is within the devolved powers of the Scottish Government, and is an area where the Scottish Government has already made important strides. The implementation of the Code makes a key contribution to this work.

1.5.6 Public Expectations

Given the importance the funeral director holds in this process, there is a generally held belief and expectation from the public that there is some form of regulation or statutory oversight with which funeral directors must comply. This is reflected in both industry publications and in recent reports on the industry such as by the CMA.

For example, the CMA report on their Funerals Market Investigation (2020) notes that most people incorrectly believe that funeral directors are regulated (paragraph 7.73).

As another example, UK-wide research published by funeral provider Dignity, has called for stronger regulation of the funeral sector. In 2017, they commissioned and published a research report, which included a survey of more than 2,000 people who had organised a funeral; the following findings are relevant here:

• Nine in ten (92%) did not know that funeral directors were unregulated
• Eight in ten (80%) supported regulation to ensure minimum standards
• Seven in ten (73%) said care of the deceased was "very important"

Additionally, in the consultation for the Burial and Cremation Bill, Question 83 asked for views on whether regulation of the funeral industry would be beneficial. Seventy-three percent of respondents to this question answered ‘yes’, with comments identifying the possibility of improved standards and consistency, which would lead to increased public confidence. Concerns were raised, however, in relation to whether resultant costs to the industry would be passed on to consumers.