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

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