Care homes take Bury Council to the High Court over fees

    A recent court case is likely to lead to further legal challenges
    to local authority policies on fee rates paid to independent care
    homes.  This will only increase the pressure on councils’ social
    care budgets.

    Earlier this year, a group of independent care homes, led by
    Heathlands Village Charitable Trust, applied to the High Court for
    permission to take Bury Metropolitan Borough Council to judicial
    review.  The application was heard in February before Mr Justice
    Collins.  The homes had refused to accept Bury’s standard rates for
    2003/2004, and were asking the Court to rule that Bury’s method for
    setting the fee levels was open to legal challenge.

    An ordinary contract claim was already proceeding in Manchester
    County Court for fees to be assessed, as has happened elsewhere,
    for instance in Lincolnshire. Bury argued that this application for
    judicial review added nothing to the matter, that it was a simple
    contract argument for the County Court and that leave to apply for
    judicial review should be refused.

    The home owners, by contrast, persuaded the Judge that there was a
    sufficient public law element in the contractual ‘mix’ to justify
    proceeding further with the administrative remedy.

    Everything turned on the factor of affordability, relied upon by
    the local authority and more or less argued as irrelevant by the
    care homes.  However, the providers were not seeking to argue that
    they could set their fees as high as they wished, and local
    authorities must pay.  What was at stake was whether Bury could set
    its rates knowing (on the basis of evidence presented to it) that
    these would not be sufficient to meet providers’ costs and a
    reasonable element of profit.

    It is clear from the transcript of the hearing that Bury’s argument
    was hindered by having failed to produce any significant evidence
    as to how the fees were set, leading to the inference that the
    authority’s budget was probably the dominant factor and the rates,
    accordingly, might well have been set ‘mechanistically’.

    Mr Justice Collins allowed the application, saying “I am firmly of
    the view … that there is an underlying public law point.”  These
    arguments, however, will almost certainly have to be explored in
    another context, as the parties in this instance are thought to be
    settling out of court.
     
    Alison Castrey
    Solicitor (Residential Care, Education & Nursing
    Services)

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