Second council sees High Court quash decision to freeze care home provider fees

The High Court has quashed a local authority’s decision to freeze the fees paid to care home providers for the second year running.

His Honour Judge Langan QC’s ruling against Leicestershire County Council at the Administrative Court in Leeds comes just weeks after a high-profile judgment against Sefton Council.

The challenge against Leicestershire’s decision to freeze care home fees was brought by EMCARE, which represents the owners of 104 care homes in the county, the City of Leicester and Rutland.

In East Midlands Care, R v Leicestershire County Council [2011] EWHC 3096, HHJ Langan QC quashed the local authority’s decision, which was taken on 7 March 2011 and related to the fees to take affect on 1 April 2011.

He ruled that the county council had:

• failed to consult with the care home providers. Such consultation as there was failed to meet the requirements of the Coughlan case. “What EMCARE got was too little, too late”
• failed properly to assess or take into account the actual cost of care, and
• failed properly to assess the risks consequent upon a freeze in fees.

However, HHJ Langan QC rejected claims that the council had failed to comply with s. 49A of the Disability Discrimination Act.

The judge rejected Leicestershire’s argument that the remedy should be withheld as a matter of discretion as (a) the proceedings had been issued on the edge of the three-month time limit and (b) it was too late in the financial year to unpick a decision which took effect on 1 April. He ordered Leicestershire to pay EMCARE's legal costs.

David Collins of niche law firm David Collins Solicitors, which advised EMCARE, claimed that the ruling was “highly important”, adding that it endorsed the judgment in Sefton.

Collins said:
"This is the second time in a month that the court has ruled that the practice of councils setting fees for care home services in an arbitrary manner is unlawful. The Sefton and Leicestershire decisions undoubtedly clarify the legal duties on councils and highlight the many failures in their decision-making processes.

“However, the process of engagement with councils remain complex and I remain cautious in my views as to whether councils will genuinely embrace a properly balanced working relationship with the private care sector. With this caution in mind, how providers and their associations approach the fee review process remains both crucial and complex.”

A Leicestershire spokesman said: “The judicial review related to the council’s decision not to increase payments to providers of residential care for adults and older people in this financial year (2011/12). In the extremely challenging financial climate facing the council, most care providers understood the reasons for the decision, but EMCARE challenged it in court.

“The judge has quashed the council’s decision, which means it must be considered again and a new decision taken. The judge did not decide that the decision itself was wrong and said that ‘the actual decision not to increase fees may well be one which can be supported by a number of factors’. The judge also decided that the council had complied with its requirements in relation to the Disability Discrimination Act in reaching its decision.”

The spokesman said Leicestershire would now consult with providers of residential care and with EMCARE and ensure that the revised decision complied with the court’s judgement.

“Any possible increase in fees will be backdated to 01 April 2011,” he said. “In the meantime, the council continues to conduct business in the usual way with care home providers and will continue to make placements at its current rates.”

Philip Hoult