Welsh council in rare win over care home fees as Devon becomes next in firing line

A local authority in Wales has successfully defended a High Court challenge to the rates it set for care home providers for 2011/12.

Neath Port Talbot County Borough Council’s success this month comes as Devon County Council became the latest authority to face legal action over its fee-setting, with a group of four care home operators given permission to bring judicial review proceedings.

In previous cases Pembrokeshire County Council has lost twice – the first time against its original decision and the second over the re-taken decision. Sefton Council and Leicestershire County Council also lost high-profile cases in November and December 2011 respectively.

In Bevan & Clarke LLP & Ors v Neath Port Talbot County Borough Council [2012] EWHC 236, nine operators of residential homes sought a judicial review of Neath Port Talbot’s decision to pay £426 per resident per week with a £23 supplement per week for residents with dementia.

The sums amounted to an increase of 5.7%. The council had also decided to offer to enter into a four-year agreement with providers with a minimum guaranteed increase of 4% each year.

The claimants argued that Neath Port Talbot had unlawfully failed to set a rate which reflected their costs in providing care, and the need, given projected requirements for provision by private care homes, for the sector to be sustainable.

Counsel for the nine operators also argued that:

• the authority had failed to take account in a number of ways of the Commissioning Guidance issued by the Welsh Assembly Government; and
• the decision of 25 March 2011 was procedurally unfair because the council had relied on the absence of long-term business plans by the claimants, when such plans (a) were only first mentioned shortly before the decision and (b) were mentioned in circumstances which did not inform the claimants of their importance for the decision for 2011/12.

Neath Port Talbot argued that its decision clearly recognised the need to maintain the care home sector. The authority also suggested that the challenge was a disguised attack on the merits of the decision or on the weight given to various factors, and that neither of these were the province of a court exercising its supervisory function by way of judicial review.

The local authority’s counsel, Elisabeth Laing QC, argued that its function of setting a fee under its contracts with providers was a private function and not amenable to judicial review. She also submitted that there had been undue delay, with the claimants lodging proceedings one day short of the three-month period from the date of the decision.

Mr Justice Beatson concluded that the council’s decision was amenable to judicial review and he would not have refused relief on the grounds of delay.

However, the High Court judge rejected a range of the claimants' submissions and found that Neath Port Talbot’s decision was not unlawful.

In relation to the suggestion that Neath Port Talbot's approach was not underpinned by a methodology or a lawful rationale, for example, the judge found that the authority had taken account of the information it had about providers' costs, decided the budgeted figure for care, and recommended increases for four years.

Mr Justice Beatson also pointed out that the council considered standards and the increases in capapcity by some providers. "That it did so showed that the council sought to understand the costs of care services and was acting to promote service sustainability in accordance with Standard 10 of the Commissioning Guidance. This was not straightforward. One of the problems identified by the council....was that not enough providers had responded to surveys about costs."

Leader of Neath Port Talbot, Cllr Ali Thomas said: “Supporting vulnerable people is a key priority for the council and this judgment is welcome confirmation that we have been reasonable in setting the fees we pay to care homes. In addition, the decision has endorsed our approach to sustaining the care sector through our four-year fee setting strategy.

“We have all faced economic pressures in recent years, and this has been a particular challenge for social services. Last year we reinforced our commitment to the care home sector by increasing payments by 5.7% at a time of acute pressure on our finances. It is now time to move forward. We want to work with care home providers to ensure that older people in Neath Port Talbot receive high quality care.”

Philip Hoult