Update on Care Home Fees

Sunday 17 February 2013

Share This Page

Email This Page


Notwithstanding the well-known budgetary pressures affecting most adult care authorities, care home owners have enjoyed a run of successful judicial reviews of care home fee-setting decisions. This talk provides an overview of that success (and schedules the relevant cases below), questions how long it is likely to continue and considers how local authorities can set lawful and fair rates, that promote a reasonable choice of good quality care homes and do not prejudice the needs of others with claims on the adult care budget.

The statutory scheme

The legal obligations on local authorities rest of slender foundations. The National Assistance Act 1948 (Choice of Accommodation) Directions 1992, together with the National Assistance (Additional Payments and Assessment of Resources)(Amendment)(England) Regulations 2001, impose duties on local authorities, owed to care home residents (not care home owners), to permit residents to be accommodated in their preferred accommodation if, inter alia, the cost “would not require the authority to pay more than they would usually expect to pay having regard to [their] assessed needs”, or if, inter alia, a third party or in some cases the resident “tops up” the difference.

Leaving hastily to one side the question of top-ups – another looming iceberg in the mist – the relevant statutory guidance, which is currently LAC (2004)20, understandably aims to ensure that the “usual cost” (i.e. standard fees) of care home accommodation, for residents within particular brackets of need, is maintained at a realistically high level – not to benefit care home owners, but for the benefit of residents, by ensuring that the local care home market includes a reasonable choice of reasonable quality care homes at prices that do not require top ups to be paid.

The focus of care home owners, however, and understandably so, has been on paragraph 2.5.4, which advises local authorities to set their usual costs at the start of a financial or other planning period, or in response to significant changes in the cost of providing care, to “set more than one usual cost where the cost of providing residential accommodation to specific groups is different” and goes on to say: “In setting and reviewing their usual costs, councils should have due regard to the actual costs of providing care and other local factors. Councils should also have due regard to Best Value requirements under the Local Government Act 1999”.

The other relevant document is neither statutory guidance nor, ostensibly, guidance at all but, as it describes itself “an agreement”: Building Capacity and Partnership in Care: An Agreement between the statutory and the independent social care, health care and housing sectors. Unlike LAC (2004) 20, this agreement (to which senior local authority and care home persons contributed) is aimed directly at the relationship between care home commissioners and providers. Among some of its more neglected provisions, it does state that providers should undertake a number of obligations including, at paragraph 6.8, that “Providers should ensure that they …. Are able to provide a full breakdown of the costs of services provided”. There is, however, a strong, but nonetheless carefully framed, shot across local authority bows:

6.2 Providers have become increasingly concerned that some commissioners have used their dominant position to drive down or hold down fees to a level that recognises neither the costs to providers nor the inevitable reduction in the quality of service provision that follows. This is short-sighted and may put individuals at risk. It is in conflict with the Government’s Best Value policy. And it can destabilise the system, causing unplanned exits from the market. Fee setting must take into account the legitimate current and future costs faced by providers as well as the factors that affect those costs, and the potential for improved performance and more cost effective ways of working. Contract prices should not be set mechanistically but should have regard to providers’ costs and efficiencies, and planned outcomes for people using services, including patients.

The cases so far

Aside from a handful of cases in the mid 1990s, the setting of care home fees was an area unblemished by litigation, or by much in the way of rigorous thought generally it now seems. From time to time, some local authorities felt obliged to gird up their loins and carry out a Laing & Buisson-style investigation into the local cost of providing care homes, as a sort of once-in-a-lifetime trauma, to be forgotten as quickly as possible. For much of the time, however, rates were based on old rates, themselves based on old rates, with a nod towards regional fees (based on similarly shaky foundations) and inflation, and a good deal of horse-trading between parties who all had a great deal to lose. For better or worse, R (Forest Care Limited v Pembrokeshire CC [2010] EWHC 3514 Admin changed that and led to a spate of further judicial reviews, that shows no sign of evaporating. As already indicated, the relevant cases are scheduled below.

Is a decision to set fees a public law decision amenable to judicial review by care home owners at all?

It may well be, but, so far, no very convincing analysis establishes that it is. Local authorities have, surprisingly, not raised the issue, except in the case of R (Bevan & Clarke LLP and others) v Neath Port Talbot CBC [2012] EWHC 236 Admin.

In that case, Beatson J held that care home fee setting decisions were, on balance, public law decisions because “A Council does not have the freedom that a private individual would have to use its bargaining power to drive down the price as far as possible” (paragraph 48), although he accepted that the court’s approach to judicial review should be cautious, bearing in mind the context of contractual negotiation (paragraph 54).

However, in response to the important fall-back submission that any public law duties were owed to residents, not care home owners, Beatson J’s response relied on the terms of the Welsh commissioning guidance, Fulfilled Lives, Supportive Communities: Commissioning Framework, Guidance and Good Practice, which creates a reasonably strong nexus between the local authority and the care home provider (see paragraphs 49 and 52). It is strongly arguable that this nexus is absent in England, in that it is absent from the Choice of Accommodation Directions and LAC (2004) 20, whilst it is strongly arguable that Building Capacity (which could be argued to make a similar connection) is simply an agreement about the way that private contracting powers should be exercised.

The case-law that relates directly to arrangements in England would seem to give some encouragement to local authorities to run the argument that did not succeed in Neath. For example, in R v Cumbria CC ex p Cumbria Professional Care Ltd (2000) 3 CCLR 79, Mr Justice Turner said, of the Choice of Accommodation Directions, that “the legislative framework concentrates on the user and confers no direct rights on any service provider whether they come from the private, voluntary or statutory sectors”. And that is not the only example. Among other cases, see R (YL) v Birmingham CC [2007] UKHL 27, [2008] 1 AC 95, at paragraph 27 in particular:

If an outside contractor is engaged on ordinary commercial terms to provide the cleaning services, or the catering and cooking services, or any other essential services at a local authority owned care home, it seems to me absurd to suggest that the private contractor, in earning its fee for its business services, is publicly funded or is carrying on a function of a public nature. It is simply carrying on its private business with a customer who happens to be a public authority. The owner of a private care home taking local authority funded residents is in no different position. It is simply providing a service for which it charges a commercial fee.

Very recently, an English local authority did raise these issues, but failed and is now said to be applying to the Court of Appeal. In R (Redcar and Cleveland Independent Providers Association and others) v Redcar and Cleveland BC [2013] EWHC 4 Admin, HHJ Gosnell followed Neath by deciding that setting standard fees was a public function and, in response to the submission that, unlike in Wales, the English statutory guidance was directed solely at the relationship between the local authority and residents, so that care home owners lacked standing to challenge decisions about usual costs, said “Whilst the Judge [Mr Justice Beatson, in Neath] referred to the Welsh statutory regulatory system the basis principles apply to this case and there can be no doubt that care home providers have sufficient interest to bring a claim as affects their rights under existing placement arrangements and their ability to meet their duties under the Care Quality Commission (Registration) Regulations 2009”. The judge’s conclusion may be correct, but his reasoning is hardly convincing – existing placement arrangements all take effect in private law (see YL above), whilst the fact that care homes are subject to public regulation hardly converts their activities into public activities (see YL, again).

Is there a duty to consult?

There will not be a public law duty to consult care home owners if there is no public law duty owed to care home owners at all.

Otherwise, a duty to consult can arise as a result of legitimate expectations founded on policies, promises or previous dealings, or common law fairness: see Administrative Law (Craig, 6th edition, Thomson, pages 733 – 735), R (Hillingdon) LBC v The Lord Chancellor [2008] EWHC 2683 Admin, paragraph 38. Thus, where a local authority has routinely consulted, in the past, on care home fees, or has promised to do so, or has published policies stating that it will do so, it will generally be under a duty to do so (see, recently, paragraph 43 of R (South West Care Homes Ltd) v Devon CC [2012] EWHC 1867 Admin).

Outside of that sort of case, however, the position is not so clear. Neither the Choice of Accommodation Directions nor LAC (2004) 20 advise that there should be consultation. Building Capacity advises that there should be “fee negotiation arrangements” (paragraph 6.7) and “joint working” (chapter 7), which could be regarded as consultation in all but name but (i) that is debateable, (ii) Building Capacity, it might be said, is neither statutory nor departmental guidance, but an agreement as to best practice in the exercise of private law contracting powers.

There would seem to be a strong argument that common law fairness does not require the imposition of a duty to consult, given that the statutory scheme expressly imposes duties to consult in other situations and given that what is at stake are commercial rates of pay under contracts, not fundamental rights (R v SSHD ex p Doody [1994] 1 AC 531, at page 560D – F, R (Buckinghamshire CC) v Kingston RLBC [2010] EWCA Civ 457).

In short, plainly it would be prudent (as well as good commissioning practice) to consult because it is during the consultation process that the local authority can ascertain important information about the merits of its proposed course. Also, it is well established that, if undertaken, consultation must be done properly.

As to whether there is a legal duty to consult, however, in the absence of a promise to do so, or a clear past practice of consultation, engendering legitimate expectations, whilst such a duty may exist, that has not been clearly established, in a case where the arguments for and against were thrashed out and a decision made. The dicta are, however, all one way – that there is a duty to consult. In the most recent decision in this area, R (Redcar and Cleveland Independent Providers Association and others) v Redcar and Cleveland BC [2013] EWHC 4 Admin, HHJ Gosnell said, at paragraph 66, that “The Defendant had an obligation to consult in the sense that they were obliged to tell the providers what their provisional proposals were, to ask the providers for their views and information and take those representations into account when they made their final decision”.

The general equality duty at section 149 of the Equality Act 2010 and Human Rights

Obviously, the public sector equality duty is owed to residents and, potentially, it could be owed to care home owners, whether or not fee-setting is a public law decision. But is it and, if it is not, do care home owners have standing to challenge any breach of duty in relation to the residents?

Notwithstanding the importance of the public sector equality duty, it does not seem logical that it should apply to decisions about the rates to be set under ordinary commercial contracts, unless there was something about the market in question that raised a particular issue about equality, in relation to the providers themselves (which does not apply, in the care home market).

Nor is it clear why care home owners should have standing to pursue such a matter on behalf of residents, in order to bolster their private, commercial interests. The interests of residents and care home owners are by no means identical and, except for emergency situations, residents might generally be expected to bring their own proceedings, if they were concerned about any breach.

In R (Sefton Care Association) v Sefton Council [2011] EWHC 2676 Admin, HHJ Raynor QC threw local authorities something of a life-line by holding that “if the assessment of the usual cost of care is unimpeachable (i.e. undertake in accordance with the requirements of the 1992 Directions and the statutory Guidance and the Agreement) then there is no further need for the Defendant to consider the public sector equality duty when fixing its fees” (paragraph 100).

But is this a life-line that the ordinary, prudent authority wants to grab? It might take the view that, in some cases at least, even an entirely lawful decision or policy about care home fees could result in risks of adverse consequences to residents that ought still to be considered and that it might be prudent and, when all is said and done good practice, to keep the equality assessments coming and to carefully estimate the possible risks to residents of inadvertently paying usual costs at a rate that is too low and what mitigating steps and monitoring should be deployed.

As far as that endeavour is concerned, the members of the audience are referred to the earlier practice note on gardensocial.co.uk about the public sector equality duty here and the non-statutory guidance published in September 2010 by the EHRC, called Using the Equality Duties to make Fair Financial Decisions. (This guidance is framed in the context of earlier equalities legislation but is relevant to decisions under the new public sector equality duty. It contains much that is of real, practical assistance to local authorities).

Regrettably, even now, far too many equality assessments amount to little more than relatively junior officers giving 3 sycophantic cheers for a policy drafted by the big beasts. It may not be easy, politically, within every local authority, but what is actually required is an intellectually honest, down-to-earth appraisal of the downsides, the level of risk and what can be done about it. In setting care home fees, the risks are obviously, primarily at least, that fees will be set too low, so that there could be breaches of contractual standards of care, slippage in non-contractual standards of care, or even home closures – with all the consequential possibilities for distress, harm and injury that could be entailed. These issues need careful consideration, with the rose-tinted spectacles put to one side or, preferably, stamped on and thrown generally in the direction of Whitehall. Of course, having frankly recognised the potential risks and given conscientious consideration to removing, or at least mitigating them, it is open to the authority to make a decision about fees that it knows is less than generous and may make it difficult for all care homes to sustain good quality care: as to that, see below: but it has to do it with its eyes open and having had conscientious regard to the important of protecting the interests of vulnerable residents.

There is an interesting side issue in the cases, and an important one, as to whether or not it is for the Court to decide, for itself, whether a local authority has had “due regard” to the various needs set out at section 149 of the Equalities Act 2010. The consensus in the case-law is that it is (see the resume at paragraphs 36 to 40 of the Redcar case) and this writer agrees with that. Of course, once it has been established that “due regard” has been had, to the need to protect and promote the interests of the specified groups, the local authority’s ultimate decision as to how to proceed will not be quashed unless it is Wednesbury unreasonable, or otherwise unlawful in public law.

Much the same argument can be had about human rights. Care home owners probably cannot, directly, rely on alleged breaches of residents’ human rights, because of section 7 of the Human Rights Act 1998 (see R (Broadway Care Centre Ltd) v Caerphilly CBC [2012] EWHC 37 Admin), even if, which is very unlikely, any such could be established, on the facts. Could the consequences for the human rights of residents be a relevant consideration for local authorities, as mooted in R (South West Care Homes Ltd) v Devon CC [2012] EWHC 1867 Admin? That proposition is tenable, although it does look like an illicit attempt to go behind section 7, not for genuine human rights reasons, but for commercial reasons, when those who truly do have standing, have not brought proceedings: and the rights at stake, with the best will in the world, are somewhat remote. Again, however, the prudent local authority will no doubt wish to take into account, perhaps as part of its equality assessment, the potential effect, on the human rights of residents. The extra effort involved is so small, it is hardly worth arguing about, whereas there is a lot to be said for the good practice of taking this approach.

How can a local authority assess the actual local costs of care?

It is important to recognise that neither the Choice of Accommodation Directions, LAC (2004) 20 nor Building Capacity are prescriptive as to how local authorities are to assess the actual costs locally of providing care home accommodation. Therefore, the usual principle applies, that it is a matter for local authorities, subject to Wednesbury, to decide on the manner and intensity of the enquiry to be undertaken. That principle was applied, in this context, in the Neath case (at paragraph 56) and also the recent Devon case (at paragraphs 24 to 25) – in which latter case, it may be said, evidence as to any detailed attempt by the local authority (comparable, for example, with the well-known Laing & Buisson approach) to assess actual costs, seems fairly thin.

It is also important to recognise that cases such as R (Forest Care Home Limited) v Pembrokeshire CC [2010] EWHC 3514 Admin and R (Mavalon Care Ltd) v Pembrokeshire CC [2011] EWHC 3371 Admin, and indeed the more recent cases, referred to above and below, are not cases that require a particular methodology to be employed. They are simply cases where a local authority has stated that it would employ a particular methodology but then made mistakes in applying it, or departed from it without a sensible reason, or where on its proper construction the method employed simply was not directed at local care costs, but regional cases (R (Redcar and Cleveland Independent Providers Association and others) v Redcar and Cleveland BC [2013] EWHC 4 Admin). Such cases offer limited assistance to a local authority that simply wishes to develop an appropriate model for assessing actual costs locally.

The most well-known method for calculating care home fees is that in Calculating a fair market price for care: a toolkit for residential and nursing homes (3rd edition, William Laing, Joseph Rowntree) (“the toolkit”). The toolkit represents an attempt to establish a fair market price, in circumstances where it is considered desirable to expand care home provision, to encourage better quality physical environments and, in particular, to encourage new-build care homes (often, run by large organisations).

The toolkit remains an important document. Its approach to the assessment of staff and employer’s on costs, repairs and maintenance and other non-staff current costs at home level is hard to fault, although many authorities, these days, are understandably anxious both to ascertain actual local figures and to obtain verification of the figures put forward by care home providers, by seeing the evidence substantiating them. It is certainly the view of the speaker that local authorities are entitled to ask care home providers to verify their claimed figures.

Further, the toolkit’s approach to the assessment of capital remains appropriate, although by no means mandatory, in contexts where local authorities share its underlying priorities and assumptions. Even when local authorities do not, the toolkit remains a method that at least produces an even spread of results that does not turn on individual homes’ different capital or funding arrangements and has an objective basis. So it is always worth while having a look at the figures produced by a conventional application of the Laing & Buisson approach and, in appropriate cases, taking into account what happens when factors are varied to reflect local conditions.

However, it is understandable why the great majority of local authorities seem to be turning away from the toolkit and searching for a different methodology, in particular in order to assess capital costs and returns on capital. On any view, in the great majority of local authority areas, the context has changed. For example, the advent of extra-care housing, personalisation and the new types of funding and provision that come with these, means that for most authorities the priority is now reducing, not increasing, care home placements, whilst in many areas, the dominant form of provision is not new build, erected by large-scale providers, but established, relatively small local businesses, changing hands from time to time via estate agents.

In this sort of context, calculating capital costs by reference to turnkey build and equip costs, and factoring in start-up losses, seems inappropriate. In some areas, taking into consideration local capital values (for care homes) can seem a more realistic basis for the assessment of returns on capital.

Equally, in the context of our current economic difficulties, running a care home may be seen as a relatively safe business, alternative forms of investment may also be seen as higher risk and lower return than previously and – in the case of smaller homes – time and energy spent overseeing the business may not be disentangled easily from time spent providing care. If so, a “blended” rate of return of 12% can seem high and the rationale for it weakened – notwithstanding circular and self-justifying market expectations.

On that basis, and given the widespread reluctance of care home providers to disclose copies of their accounts to local authorities, to enable them to clearly see the level of profits actually being made, it is hardly surprising that most authorities are considering – often with the benefit of expert accountancy and legal advice – different methods for calculating actual costs of care locally.

To what extent can a local authority pay less than the usual cost of care?

In Sefton Care, at paragraph 70, HHJ Raynor QC said:

72. In my view, taken as a whole, the statutory Guidance and the Agreement do not contemplate that there will be any significant imbalance between the usual cost of care and the actual cost. If a local authority consciously fixes the usual cost in a sum significantly less than actual costs, then I do not see how it could be said to be having "due regard to the actual costs of providing care" as required by paragraph 2.5.4 of the Guidance. Furthermore, such action by a local authority would in my judgment amount to a breach of the guidance contained in paragraphs 6.2 and 6.7 of the Agreement, namely to take account in fee setting of the legitimate, current and future costs faced by providers, as well as the factors that affect those costs, and to ensure that appropriate fees are paid. If fee levels are set significantly below actual cost, then, in the words of paragraph 6.2 of the Agreement, there will be "inevitable reduction in the quality of service provision", which "may put individuals at risk".

All of this seems like good sense. However:

· In the Sefton Care case, the local authority’s decision was not to increase fees and that decision was quashed because the local authority failed to undertake the first step, that is, it failed to ascertain and take into account what the local cost of providing care actually was. Therefore, the local authority did not, in fact, make a decision to set fees at a lower rate than the usual cost of providing care or, it follows, advance any reasons for so doing. Sefton Care does not, accordingly, contain any concrete examination of whether a lawful decision was made, for particular reasons advanced by a local authority in a particular case, for setting fees at less than the usual cost of care;

· Second, HHJ Raynor QC clearly accepted that a local authority could lawfully pay less than the actual cost of care, providing that it was not “significantly less”. On general principles, how much less is “significantly less” must be, first of all, a matter for the judgment of the local authority although, no doubt, the greater the distance between actual costs and usual costs, the more the court will scrutinise the lawfulness of the decision and, in particular, the reasons given for the divergence.

It is notable that neither LAC (2004) 20 nor Building Capacity state that local authorities must, or even ought to, set fees that reflect the actual local costs of providing care. Local actual costs are one relevant factor, the others being best value (including the importance of maintaining quality of provision) and local factors. The advice is, therefore, that local authorities should take into account

· How much it actually costs providers to provide the main categories of care home care, taking into account likely changes to those costs over the coming cycle;

· How much it should cost providers, if providers were running their businesses efficiently (for example, at optimum staffing and occupancy levels), and adopted improved performances and more cost effective ways of working, and at the same time providing care of reasonable quality;

· Local factors such as the fees paid by NHS commissioners and private payers, the proportion of local authority placements in the overall market, the local authority budgetary position, the extent to which there is over supply or under supply in the market, whether incentives are needed to encourage new provision or better quality standards, the extent to which local care homes have been maintaining good quality provision, the extent to which (if at all) local care homes have been leaving the market – and so on.

On basis of LAC (2004) 20, Building Capacity and Sefton Care it seems to the writer that, as a general proposition, whilst the actual cost of providing care is an important starting point, that in itself is not a starting point that is free from difficulty – does one start from the highest or the lowest figures, for example, or does one use average figures (if so how) or centile figures (if so which centile) and what assumptions does one make about occupancy and staffing levels.

After that, it can still be lawful to pay less, in a case where, for example, a local authority reasonably believes that care homes can operate more efficiently, that quality standards and a reasonably good choice of care homes can be maintained given the local context, where there is no need to encourage additional supply, where there are budgetary pressures on the local authority and, in some areas, where there is a buoyant private sector and the local authority has a relatively marginal presence in the market place.

In the final analysis, how much less can be paid, having due regard to actual costs of care, best value and local factors, is a matter of judgment for the local authority, as a budget-holder accountable to its electorate, and as a commissioner accountable to care home residents to provide suitable accommodation and care that meets needs and respects human rights. Care home owners constitute a powerful lobby, with plenty of money, collectively, for litigation. But, whilst care home residents are an important group, local authorities owe important duties to many other recipients of care. Many of them are not a powerful lobby and are unlikely to litigate, but their needs are, of course, just as important.


The answer to the question “where are we now and what does the future hold” is that we are at a watershed, where case-law has stripped away, or assumed, a number of the less important issues, leaving the one big question unanswered: what would amount to a lawful, but new, method of calculating actual costs and to what extent, and for what reasons, can local authorities pay less?

Whilst, as indicated above, there are reasonable arguments that fee setting is not a public law decision, that there is no duty to consult care home owners and that there is no duty owed to care home owners to discharge the public sector equality duty, or take into account the human rights of residents, subject to any decision by the Court of Appeal in the Redcar case, most prudent authorities, who wish to avoid litigation and, moreover, provide a good commissioning service in everyone’s interests, are going to consult and discharge their public sector equality duty and take into account human rights. In this day and age, any that do not, and find themselves at the wrong end of expensive litigation, really have only themselves to blame.

Further, as the Pembrokeshire litigation makes clear, local authorities that state that they will use a particular methodology, the toolkit for example, simply have to do it properly and, where they make changes, must have a reasonable explanation for the changes. Again, in the light of all that has happened, a local authority that fails to do this, is just asking for trouble. In particular, if they choose to fight a case to the death.

What is of real and important ongoing interest, however, is whether, and if so how, local authorities can find alternative methods of assessing actual costs of care locally, and of setting fees, that are fair to providers, that maintain a reasonable choice of good quality care homes for the benefit of residents and that allow local authorities to continue to manage difficult budgetary situations and meet the needs of all those who need adult care, including of course those who are not in care homes. Some authorities have already followed this path and reached agreements locally. Other authorities are well advanced in preparing their calculations, ready for consultation. Sooner or later, probably sooner rather than later, one or more lucky authorities will be reviewed and then a much clearer picture will emerge as to what the legal parameters are. However, a local authority that formulates a methodology based on sensible legal and accountancy advice, and puts forward sensible reasons for setting any payments at less than actual costs, is likely to survive. At the end of the day, it is, after all, the job of the local authority, and not the courts, to assess costs and set fees, in the context of the difficult budgetary and political choices that face them.


R (Redcar and Cleveland Independent Providers Association and others) v Redcar and Cleveland BC (HHJ Gosnell): (1) decisions about what standard fees to pay care home providers were amenable to judicial review, by care home owners, (2) it was for the Court to decide whether a local authority had had “due regard” to the actual costs of providing care locally, as advised by LAC (2004) 20, although the decision ultimately made as to the level of standard fees was subject to challenge only on Wednesbury grounds, (3) the local authority in this case had not had “due regard” to the actual costs of providing care locally as, on a proper analysis of its decision-making, it had only had regard to the levels of fees payable in other local authority areas for that purpose. The authority did take into account certain other material relating to local costs, but only for the purpose of trying to avoid a judicial review. Click here for the judgment.

R (Members of the Committee of Care North East Newcastle) v Newcastle CC [2012] EWHC 2655 Admin (HHJ Gosnell): the local authority’s decision to fix care home “usual rates” was unlawful because (i) it had no rational basis for its view that an inflationary increase of3% (staff costs) and 5% (other costs) was appropriate, having “plucked out of the air” these figures, (ii) it had no rational basis for the imposition of efficiency savings of 2% and in fact this contradicted the evidence about possible efficiency savings, (iii) it had decided to include a return on equity of either 0% or 5%, or somewhere in between these figures, without giving any real consideration to the effect that this would have on the sustainability of care home provision locally and that did not appear to be a reasoned choice that took into account actual costs of care, and in fact was irrational, (iv) its consultation had been inadequate - there had not been any genuine attempt to ascertain relevant information about actual costs, consider it and pass it on to decision-makers. It was also unlawful to refuse to make placements with providers who refused to agree the new usual rates. Click here for the judgment.

R (South West Care Homes Ltd) v Devon CC [2012] EWHC 1867 Admin (Singh J): the council had taken into account the actual cost of providing care homes locally by commissioning an accountancy firm to construct a model that calculated the cost of care in Devon, by analysing financial information and costs pressures generally, by listening to the concerns of care providers and by considering the cost of running council care homes and the amounts paid by other regional authorities. Further, on the facts, the council had had regard to the potential indirect impact on the human rights of residents. However, the council had failed to consult the care home providers about its proposal not to increase care home fees, in breach of the legitimate expectation that it would do so, based on its past practice. Notwithstanding that, judicial review remedies being discretionary, only declaratory relief would be granted, and not a quashing order, to avoid detriment to good administration: because the claim had been issued at the end of the 3-month cut-off period (and had not been properly formulated until a considerable period after that); the financial year had ended and transactions including tax returns would have been completed on the basis of no increase in fees; any increased fees resulting from a quashing order would be a windfall for providers who had not challenged the decision and would have adverse consequences for residents paying the full cost of their care through the local authority, or relatives of those who had died, or council tax payers; and, whilst there had not been legally adequate consultation, the views of the care providers were in any event well-known to the council. Click here for the transcript.

R (Bevan & Clarke LLP and others) v Neath Port Talbot CBC [2012] EWHC 236 Admin (Beatson J): the Commissioning Guidance issued by the Welsh Ministers under section 7 of LASSA 1970 (Fulfilled Lives, Supportive Communities: Commissioning Framework, Guidance and Good Practice, August 2010) meant that whilst the Council was less closely regulated than a social landlord it did not have the freedom that a private individual would have to use its bargaining power to drive down the price as far as possible; accordingly, its decision as to what fees to pay care home providers was amenable to judicial review. However, the judicial review application failed because, overall, the Council’s decision had been rational and, in particular, it had been rational for the Council to (i) take into account its own figures derived from applying the Laing & Buisson “toolkit” as well as those provided by Care Forum Wales, (ii) use a lower rate of return on capital than the 12% suggested in the “toolkit” and (iii) taking into account its lack of resources, set a rate for fees less than both its own and Care Forum Wales’ assessment of the costs of care. Click here for the transcript.

R (Mavalon Care Ltd) v Pembrokeshire CC [2011] EWHC 3371 Admin (Beatson J): the council’s decision to set a weekly rate of £464.00 per resident for care homes was unlawful, principally because (1) the fact that the council did not want to incentivise new building was not a rational justification for providing a 6% return on capital, instead of the 12% return on capital recommended by the Laing & Buisson model that the council had agreed to adopt (because capital costs were based on real expenditure already actually incurred on providing care home accommodation, which could have been invested elsewhere), (2) it was also not a rational justification that care home capital values had reduced by 25%, as the market still expected a return on investment of between 12.5 and 16.6%, (3) the council had no rational justification for abandoning the quality incentive in the Laing & Buisson model (and rewarding owners who do not invest in quality at the same level as those who do). Click here for the transcript.

R (East Midlands Care Ltd) v Leicestershire CC [2011] EWHC 3096 Admin (HHJ Langan QC): the council’s decision not to increase the level of fees offered to care home providers was unlawful principally because (1) the council’s assessment of actual local costs of care was too broad brush, – what was required was an analytical, indeed a mathematical approach, (2) the council had failed to consult adequately. Click here for the transcript

R (Sefton Care Association) v Sefton Council [2011] EWHC 2676 Admin(HHJ Raynor QC): the council’s decision not to increase care home fees was unlawful because, on the facts, it had failed to consult with the claimants or take into account the “actual costs of care” and other local factors. However, the judge dismissed the claimants’ application based on section 49A of the Disability Discrimination Act 1995, holding that in a case where a local authority lawfully determines the “usual cost of care” there is no further need to consider the equality duty: the authority will be entitled to proceed on the basis that the requirements of the equality duty will be complied with in the preparation of individual needs assessments and care plans. Click here for the transcript.

R (Forest Care Home Limited) v Pembrokeshire CC [2010] EWHC 3514 Admin (Hickinbottom J): (1) the Council had been under a public law duty to communicate its decision setting a fee rate for the provision of residential accommodation for the years 2010-11; (2) in setting its fee rate, the Council had acted irrationally, by mis-applying the “Laing 2004 Wales model” for calculating fair care home fees in a number of respects, including by mis-calculating the level of capital assets on which a reasonable rate of return needed to be provided for and by failing to consider local staffing levels; (3) in the circumstances of this case, the Council had not acted unlawfully in public law or in breach of contract by preventing the Claimant from obtaining third party contributions topping up the fees beyond the level that the Council had agreed to pay. Click here for the transcript.

On budget settting:

R (JG and MB) and Lancashire CC [2011] EWHC 2295 Admin (Kenneth Parker J): the local authority had acted lawfully in setting a reduced global budget for adult social care, in changing its FACS threshold to meet “substantial” and “critical” needs only and in increasing its charges. In particular, its budgetary decision had lawfully complied with section 49A of the Disability Discrimination Act 1995, because those involved had been aware that it was likely to adversely impact on disabled persons and because it did not tie the Council’s hands fiscally and was on the basis that any specific policy change would be subject to detailed consultation and impact assessment. In relation to the later, detailed consultation and impact assessment process, there was “simply no foundation” for the allegation that it had been inadequate. In addition, the Claimants had, improperly, filed and served a large amount of misconceived “financial evidence” and other unhelpful material shortly before the hearing. The case is an illuminating read for local authorities who want to see how another local authority has lawfully modified its adult social care policies.

We are top ranked by independent legal directories and consistently win awards.

+ View more awards