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Home > Blogs > Social welfare updates > Case updates > A local authority had not breached its duty under s 5(1) & (2) of Care Act 2014 when making limited increases to fees it paid to care home operators

A local authority had not breached its duty under s 5(1) & (2) of Care Act 2014 when making limited increases to fees it paid to care home operators

30 November 2017, by Tim Baldwin

R. (on the application of Care England) v Essex CC  [2017] EWCA 3035 (Admin)

Facts

Care England, a charity, was the claimant and the representative body for care home operators who applied for judicial review of increases made in 2016 by Essex County Council to fees it paid to care home operators.

Essex County Council provided residential or nursing care for approximately 4,000 elderly persons. Essex County Council paid fees to the care home operators in discharging its duties under the Care Act 2014. These fees had not increased since 2009. Under s.5(1) and (2) of the Care Act 2014 Essex County Council was under a duty to “promote the efficient and effective operation of a market in services for meeting care and support needs”. The specific purpose of the duty was to ensure that any person accessing services had a variety of providers and high quality services to choose from, and sufficient information to make an informed decision. Essex County Council had to have regard to a number of matters, including the importance of ensuring the sustainability of the market. Further under s 78(1) Care Act 2014, Essex County Council had to act under the general guidance of the Secretary of State. The Secretary of State had issued “Care and support statutory guidance”. Essex County Council had carried out a cost of care analysis, and accepted recommendations from a pricing report before introducing the new fee levels. Care England considered the increases to be too small to meet the duty under s 5(1) Care Act 2014.

Care England’s claim for judicial review was that Essex County Council had (1) breached its duty under s.5(1) and s.5(2) of the Care Act 2014; (2) had failed to follow the statutory guidance made by the Secretary of State; and (3) had made a decision which was Wednesbury unreasonable.

Judgment

On refusing the application for judicial review the Court held as follows under the three heads of claim

1. Breach of duty

That local authorities faced many pressures on their resources and Care England accepted that affordability was a relevant factor when the decision was made. Further, in expending public funds, Essex County Council was under a duty to obtain value for money. The duty under s.5(1) Care Act 2014 was to promote the efficient and effective operation of a market in services for meeting care and support needs did not confer specific rights on individuals or  individual care home providers. Moreover, there were means other than setting fees for promoting the efficient and effective operation of a market. In relation to fee levels, one aspect of promoting efficiency in a market could be ensuring that fees were not set too high; alternatively, the sustainability factor could point towards ensuring that fees were not set too low. The Court held that the specific purpose under the statutory duty was being met at the time of the decision. Furtherrmore that benefiting care home operators was not the purpose of the duty. It was in the performance of the s.5(1) Care Act 2014 duty that Essex County Council was obliged by s.5(2)(d) to have regard to the sustainability factor. From the terms of Essex County Council’s pricing report and evidence from its cabinet member for adults and children that, when making the decision, it had regard to the importance of ensuring the sustainability of the market for residential and nursing care and had obtained information about the relevant care home market.

2. The guidance

Care England claimed that Essex County Council had unjustifiably departed from the guidance in several respects. First, that it had not sought or obtained evidence that fee levels were appropriate for the agreed quality of care. This argument was not accepted as Essex County Council’s day-to-day dealings with care home providers and a recent new framework tender exercise had provided ample evidence of these facts. Secondly, argument that Essex County Council had set “fee levels below an amount which is not sustainable for Providers in the long-term” was also rejected, for similar reasons. Thirdly, that Essex County Council had failed to comply with the guidance because “the fees are set at a level which was significantly below the actual costs of providing care”. Those words were not taken directly from the guidance, and it was neither necessary nor appropriate to interpolate words which were not to be found in the guidance. In any event, Care England had not provided any evidence regarding the actual costs to any care home provider of providing residential or nursing care, but relied instead on Essex County Council’s cost of care report. The figures in that report were based on assumptions and estimates and included not only costs incurred by care home providers but also profits and returns, and had also to be seen against Essex County Council’s experience of operation of the market for residential and nursing care in practice.

3. Irrationality/ Wednesbury unreasonableness

The level of increase necessary to meet the s 5 Care Act duty, particularly whether it was higher or lower than the increases made, was not a judgment the instant court could easily make on an application for judicial review, and certainly not on the evidence in the instant case.

 

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