What now for deprivations of liberty?
What will the effect of the postponement of the Liberty Protections Safeguards be on local authorities? Local Government Lawyer asked 50 adult social care lawyers for their views on the potential consequences.
SPOTLIGHT |
A growing number of local authorities have lost court cases with care home providers over the fees they are prepared to pay. Stephen McNamara analyses why.
Councils need to make significant savings to maintain basic services (or even to survive) and for social services authorities a major expense is the level of fees in care homes.
Query: if a council needs to make a saving then it must be fair for a proportion of that to be passed on to the providers; and surely if the local homes are just more expensive than the benchmarked equivalents then it must be fair to decrease fees; and surely, any challenge would be on Wednesbury reasonableness grounds and if the council have had a reasonable go at doing it right then the challenge will fail.
Well… No, No and No.
The recent eight High Court challenges – Providers 7, Councils 1 (with Pembrokeshire losing twice) – act as a reminder that risk taking can be dangerous and that it can pay to take care. They should remind all local government lawyers as to how useful they can be in protecting their councils from horrendous expense and damage to reputation. This article sets out the law and describes what went wrong. Some of the recommendations are not complex (but are easily forgotten), and some of the principles apply to any council decision making (and are relevant to all local government lawyers).
The law (necessarily simplified) plus some dicta
The law is based upon statute, directions, statutory guidance and non statutory guidance (and there are subtle differences between Welsh and English law - which I will not set out here) together with a significant injection of case law.
What this means and my diagnosis of some cautionary tales
Councils will typically have framework agreements with a number of providers. When the agreements come up for review then it will be possible to review fees and, possibly, make savings - as long as the law is followed and principles of good administration are applied. But only Neath Port Talbot survived a judicial review challenge.
Pembrokeshire [2010] EWHC 3514: Lose
There was no proper record keeping by the council. There are no minutes of critical meetings and no record of reasons for decisions. There is no record of proper notification of critical decisions (the council "understatedly described its [discussions] as informal").
The methodology and data used erred in the way it used the "capital costs adjustment factor" (a rather technical point this but it amounts to: make sure that your figures can be justified under rigorous challenge).
Sefton [2011] EWHC 2676: Lose
Although the homes claimed that there was an underfunding, the council failed to pursue the question of what was the actual cost of care. Whilst the fees were not out of line with other authorities, that did not mean that the fees reflected the actual cost of care.
Leicestershire [2011] 3096: Lose
The homes drew to the attention of the council the gap between actual costs and the banded rates. "Once the matter had been raised, it was…incumbent upon the council to ascertain what the actual cost of care was. So long as it remained in ignorance of that cost, it could not possibly pay due regard to it".
"[There] was.. an imprecise and unfocused approach … [they ] were not a substitute for asking and answering, the question--- what does it now cost to keep someone in a residential care home in Leicestershire?"
Pembrokeshire [2011] EWHC 3371: Lose
The model previously used entailed a 12% return on capital. There was a drop in value in the market value of care homes and so the council decided upon a 6% return. But the decision letter did not provide compelling reasons for the departure from the previous figure.
Neath Port Talbot [2012] EWHC 236: Win
The report to the Cabinet Board is well argued and clear. Relevant facts were set out, a "toolkit" was used but not mechanistically. There was evidence available to justify reasoning.
Newcastle [2012] EWHC 2655: Lose
A report went to the management team which warned of possible litigation. The judge found that "The report stressed the importance of consultation, bur more with a view to avoiding litigation than any other motive "
"..the Defendant has used the PWC report as the means to ascertain the actual cost of care but has populated it in a misleading way, by using figures for inflation which are inaccurate, by making a deduction for efficiency savings which was not justified and by completely striping out or almost stripping out return on equity .."
Devon [2012] EWHC 2967: Lose
This is an equality duty failure. The judge found that the duty to have due regard was not met by the council. It failed to take into account the risk that the proposed fees would impact adversely upon the quantity and quality of care given to some residents and failed to consider mitigation.
Redcar and Cleveland [2013] EWHC 4: Lose
The council undertook benchmarking and discovered that its fees were higher than neighbouring council. "The [council] had regard to both the 2011/12 fee rates and the benchmarked figures it did so not with a view to calculating the actual costs of care but more with a view to calculating what reduction might be possible to negotiate from or impose upon providers without the risk of expensive litigation".
Three legal points worth remembering
Some recommendations: or how your council may take care
Stephen McNamara is a consultant at Veale Wasbrough Vizards and a former head of legal Services at Bristol City Council. He can be contacted on 0117 314 5449 or by This email address is being protected from spambots. You need JavaScript enabled to view it..